Troubled Xanadu Under New Ownership

Xanadu, the troubled $2 billion retail and entertainment complex in Northern New Jersey, is under new ownership. In an expected move, the project's developers, a group led by Colony Capital L.L.C., turned over the mostly complete project to the lenders that hold the secured debt on the 4.8 million-square-foot property.

Xanadu, the troubled $2 billion retail and entertainment complex in Northern New Jersey, is under new ownership. In an expected move, the project’s developers, a group led by Colony Capital L.L.C., turned over the mostly complete project to the lenders that hold the secured debt on the 4.8 million-square-foot property, which would be the biggest property of its kind in the United States.

The lenders, which Bloomberg News reported last week include Credit Suisse Group AG, Capmark Financial Group Inc. and an affiliate of Fortress Investment Group L.L.C., are in talks with several developers about taking over the project, the creditor group said in a statement this morning. Conditions for assuming control of Xanadu will include “refinishing” the exterior of the five-story project, which has drawn criticism for its garish design, as well as a rebranding campaign. According to published reports, developers in the running are The Related Companies and Triple Five Group, the Canadian-based operator of the Mall of America in Minneapolis.

Located in East Rutherford, N.J., Xanadu is part of a complex that includes several major sports and entertainment venues. A new stadium for the National Football League’s Giants and Jets is scheduled to open this fall. Also part of the complex is the Izod Center, a sports and entertainment arena.