Venture capital firm backs out of Stonecrest mall purchase

Future of the mall unclear; it’s been on the brink of foreclosure for more than a year
The shopping center is located near The Mall at Stonecrest. (AJC FILE PHOTO)



The shopping center is located near The Mall at Stonecrest. (AJC FILE PHOTO)

A venture capital firm has decided not to go forward with its agreement to purchase the Mall at Stonecrest, according to documents obtained and first reported by a commercial real estate publication.

Hallmark Venture Group announced in March that it had entered into a purchasing agreement to acquire the mall, which has teetered on the edge of foreclosure since early 2020. However, the company canceled that agreement July 12, according to a quarterly financial report that Commercial Real Estate Direct provided to The Atlanta Journal-Constitution on Monday.

The company announced lofty plans for the 1.2 million-square-foot property in Stonecrest, but the canceled sale leaves the property’s future in question. The mall has had debt issues since 2013, is still paying off a nearly $90 million mortgage and has seen its property value plummet.

“What’s next for the property, which was appraised at a value of $67 million in 2018, and its (commercial mortgage-backed securities) loan is uncertain,” Orest Mandzy, CRE Direct’s managing editor, wrote. “The buzz is the property likely is worth substantially less than its current appraised value.”

Hallmark was founded in Colorado in 1995 before relocating to Nevada, where it’s a currently active corporation. However, neither its listed phone number nor its website worked Monday. The AJC was not able to get in contact with the company, which has its main office located in Boca Raton, Florida.

The company divested its assets in May 2020 as part of a reorganization and debt restructuring effort. As of June 30, the company had a $40,130 shareholder deficit, which matches the balance of an outstanding loan, according to the financial report.

In a March news release, Hallmark cited “positive cash flow” and low interest rates when it said it “intends to transform the mall and surrounding land.” The lofty vision included a sports and entertainment complex, space for an aquarium, a cosmetics superstore, an apartment complex and other projects.

The firm’s ambitious development ideas brought up comparisons to the Atlanta Sports City project, which failed in 2019. Lawsuits against the developers put an end to the project, which was pitched as a destination with dozens of sports fields, shops and restaurants.

Despite the sale falling through, some of Hallmark’s goals appear to have been accomplished. The aquarium company SeaQuest and the beauty company Lisa Young are opening large locations in the mall this summer.

The mall is currently owned by Urban Retail Properties, which is a subsidiary of Brookfield Asset Management. Urban Retail, which has managed the mall since 2012, also leases and develops the property.

Jim Roberts, the senior vice president of marketing and corporate communications for Urban Retail, told the AJC the canceled sale will not affect the mall’s current plans.

“The owners of The Mall at Stonecrest have and continue to work with a number of groups to create the best financial future for the center,” Roberts said in an email. “... The canceled merger plan does not impact any existing or future plans of the center. Mall management will continue in its current format.”

The mall’s mortgage is with Bank of America. A company spokeswoman declined to comment about the mall’s financial health or potential for foreclosure.

— AJC enterprise reporter Andy Peters contributed to this article.