Boca Raton Real Estate

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Luxury movie theater chain iPic Entertainment filed for Chapter 11 bankruptcy reorganization, months after it opened its eight-screen theater in downtown Delray Beach.

The Delray project, which was in the works for six years, is a factor in iPic’s financial problems, the Palm Beach Post reported. iPic also has locations at Boca Raton’s Mizner Park, North Miami Beach and in other parts of the country. A location was planned for Fort Lauderdale.

The company filed for Chapter 11 a little over a week after it missed a $10.1 million debt payment to the Employees’ Retirement System of Alabama and the Teachers’ Retirement System of Alabama. Boca Raton-based iPic said it secured a $16 million debtor-in-financing loan from the Teachers’ Retirement System of Alabama to keep the company operating.

iPic is in talks with investors, movie theater chains and real estate firms to buy the company, according to the Post. The bankruptcy filing shows that iPic had $291 million in debt and $157 million in assets as of May 15.

It raised $15 million from 818,429 shares priced at $18.50 when it went public last year.

The Delray Beach Community Redevelopment Agency sold the land for the downtown Delray project for $3.6 million and gave iPic $400,000 in development incentives. iPic founder and CEO Hamid Hashemi said changes to the plans, rising construction costs, taking on additional debt and interest contributed to the company’s financial decline.

In March, Hashemi said he planned to open iPics in Fort Lauderdale, Sunrise and the Miami Design District, according to the Sun Sentinel.

Kmart to close Boca Raton store

The Kmart at 1401 W. Palmetto Park Road occupies a prime location near Interstate 95. The building was constructed in 1976, and Kmart has been its only tenant, said leasing agent Jon Cashion of Katz & Associates. The property is owned by Selig Enterprises of Atlanta, according to property records.

Commercial real estate expert Joshua Ladle, head of 11th St. Capital in Boca Raton, called Kmart’s closing “the best early Christmas present ever” for the landlord. Selig Enterprises can replace a struggling tenant paying below-market rents with a new merchant paying market rates, he said.

“Whenever you can get a big vacant box like that back, there’s just so much potential upside,” Ladle said.

Cashion, who handles leasing at the Palmetto Park plaza, said it’s unclear who will take the Kmart space, but he said a new tenant should breathe new life into the shopping center.

“It’s exciting because there hasn’t been a box of this size available in Boca,” Cashion said.

The surrounding neighborhood is affluent. According to Selig Enterprises, the average household income within a mile of the store is more than $114,000.

In recent years, Kmart has closed locations in Boynton Beach, West Palm Beach, Lake Park, and Jupiter.

Many merchants have collapsed in recent years, with Sports Authority, Toys R Us and Circuit City going out of business. Macy’s, JCPenney and Nordstrom have closed stores.

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