Firm expected to buy Hill Co. Galleria

BEE CAVE, Texas (KXAN) - Seven months after filing for bankruptcy, the Hill Country Galleria’s ownership future may no longer be in legal limbo.

Property Manager Todd Duff confirmed the Chicago-based REIT Management & Research LLC's $75 million bid for the property is expected to be accepted on Friday.

The sale was supposed to close late on Friday, just two weeks after REIT bid for the Galleria during an auction at the Austin law offices of Hohmann, Taube & Summers. REIT, which manages several properties in Austin, was among three bidders at the auction.

The law firm handling the auction estimated the $75 million pricetag was "the fair market value," though it is far less than the $161 million still owed on the $192 million construction loan.

Amid financial restructuring, previous primary owner Opus West Corp., sold its stake in the property to the remaining owners, transferring management to Lincoln Properties last fall.

The bankruptcy move came as commercial real estate values and credit possibilities plummeted nationwide. If the owners failed to accept this month’s bid, the property would have faced foreclosure. A group of ten bank lenders would then have control of the Hill Country Galleria. That group was also among the bidders at this month's auction.

The commercial site opened about 2-and-a-half years ago. At the time of its bankruptcy, 70 percent of the retail space was rented. Bee Cave City Hall even calls the mall home.

"I love this area," said Brandon Steward, a shopper. "I come down here all the time. Most of my income comes here. I hope that these stores stay here as long as possible. I'd really like to see this place bloom."

Retailers said new owners would have to work diligently to garner new business.

"You're going to have to offer some free rents or lower-than-normal rents to get them in here and help them with their build-outs," said David Conrad, owner of Dogadillo.