WEST PALM BEACH — A lender has filed foreclosure against CityPlace, the high-profile shopping  complex that’s facing financial woes in spite of its high occupancy.

CityPlace fell behind on its $150 million loan in March, and an entity  affiliated with LNR Partners of Miami Beach on Thursday filed a foreclosure  suit in Palm Beach County Circuit Court.

When contacted, CityPlace Partners said: “CityPlace Partners continues to work  closely with the special servicer to realign the loan and ensure the  continued long-term success of CityPlace. Those talks are ongoing.”

Real estate experts say it’s unclear whether the lender would seek to take  back the property.

“I would think they’re going to try to work it out,” said Tom  Prakas, a restaurant broker who has negotiated a number of leases at  CityPlace.

The foreclosure suit names CityPlace Retail LLC, an affiliate of New  York-based Related Cos. Related is led by Miami Dolphins owner Stephen Ross.

CityPlace’s retail occupancy stood at 93 percent earlier this year, according  to a report from Fitch Ratings. Tenants include Macy’s department store,  Barnes and Noble Booksellers and Muvico Theaters

Despite its high occupancy and bustling traffic, CityPlace hasn’t been immune  to the effects of the economic downturn. A recent appraisal of the property  listed its worth at $143 million, down from a boom-time value of $233  million.

CityPlace’s net operating income fell from $9.3 million in 2006 to $5.2  million in 2009, according to an analysis by Trepp LLC, a New York firm that  tracks commercial real estate.

While CityPlace can boast high traffic and a healthy occupancy rate, real  estate brokers say a number of tenants pay very little rent to occupy space.  The move makes the center appear lively, but it doesn’t add revenue to  CityPlace coffers.

CityPlace was built on land leased from the city of West Palm Beach, and  CityPlace hasn’t missed any payments to the city, said West Palm Beach  spokesman Chase Scott.

Scott said he expects CityPlace to survive its financial issues. So does  Joseph Schober, president of the CityPlace Tower Condominium Association.

“It’s not going to go away,” Schober said. “It’s a very viable  place.”

Schober said the lack of a convention center hotel has robbed the center of  much-needed traffic.

Sources close to CityPlace say its partners put at least $20 million in equity  into the project, making them reluctant to walk away when the center began  having problems paying its mortgage.

“They had real money in that place,” one real estate source.

Source: floridarealtors.org