January 27, 2025

Rhino takes a second big bite out of Kitsap Mall

Image via JLL [enlarge]

The WinCo and Kohl’s properties were not a part of the recent bank sale.

Kitsap Mall sold out of foreclosure in 2022 to the lender, US Bank, for $30 million. (The bank had previously called in its prior loan to Starwood Capital Group.) Not quite three years later, via an LLC, US Bank has now sold the mall to Rhino Investments Group of Nevada, which announced the deal last week — but not the price.

Kitsap County recorded the sale, inked last month, at over $25.7 million. In its first report last week, CRE Direct valued the transaction at $30.2 million, which may reflect some unrecorded side deal. Brokers were not announced.

Public records indicate a $28.2 million loan to the Rhino-related LLC from Bixby Bridge Capital. Starwood bought the 62-acre mall, at 10315 Silverdale Way N.W., in 2013; it then paid about $127 million — which also included a few satellite buildings, later sold. It then had a $77.3 million loan from Royal Bank of Scotland, which eventually traded to US Bank. The mall is a little northwest of Bremerton, in Silverdale.

Rhino's Sanjiv Chopra said in last week's statement, “This acquisition aligns perfectly with Rhino's strategy to invest in well-located, high-performing assets with long-term potential.” He noted the mall is 96% leased, and that Rhino is aware Macy's will close this year. Other tenants include Barnes & Noble, JCPenney, Dick's Sporting Goods, Cost Plus World Market and Red Robin. (Kohl's owns its inset parcel.)

Rhino is often an opportunistic buyer of distressed retail properties, which are then nursed back to health. Back in 2019, it bought the vacant, separately owned Sears property at Kitsap Mall for $9.1 million. That was subsequently leased to WinCo, then sold last August to California investors for about $21 million.

“We were the logical buyer, having the deepest knowledge of Kitsap Mall's potential,” said Chopra of the recent purchase.

Including the WinCo and Kohl's buildings, the mall has about 761,639 square feet. JLL will continue to represent the space, said Chopra. He added, “We are already working with several tenants to replace Macy's, and hope to make leasing announcements in the next quarter or two.” Macy's corporate parent announced the store closure earlier this month.

Including the past Sears acquisition, the recent mall deal represents Rhino's fourth investment in Kitsap County. Safeco arm Winmar developed the mall in 1985.