Madison Marquette's VP of Acquisitions and Development Eric Hohmann tells GlobeSt.com that mall is a value-add play for the company, which plans to spend another $30 million to attract new tenants and, ultimately, an institutional buyer. In addition to substantial cosmetic improvements and leasing up the vacant shop space, Madison Marquette plans to demolish some existing mall space and build new space in its place for three major new tenants. Hohmann says plans also include the addition of a freestanding pad site for a new family restaurant.
Located at East 14th Street and Fairmont Boulevard, approximately 20 miles southeast of San Francisco, the regional mall was originally built in 1957. Currently, it is the city's biggest employer and largest source of sales-tax revenue--a significance not lost on city officials, who have promised to facilitate the permitting and entitlement process for Madison Marquette.
In 1994, the city contributed $3 million to persuade Macy's to remain at Bayfair and began $4 million in payments to the mall's then-owner Heitman Retail Properties for current and future upgrades. Since that time, a Target has replaced the Ward's department store and a 16-screen Century Theatres movie house has opened at the mall.
Alas, the shop space remains substantially empty. Hohmann says the three new mall tenants will range in size from 25,000 sf to 90,000 sf. The names of the new tenants aren't being released until the lease negotiations are finalized, which is expected sometime during the fourth quarter.
"Madison Marquette sees tremendous upside potential for Bayfair Mall," says Hohmann. "We expect our national retail relationships will add significant value to the property."
An affiliate of international investment firm Capital Guidance Corp., Madison Marquette oversees more than 29 million sf of regional malls, specialty centers, community centers, urban villages and other retail and mixed-use properties throughout the US. In addition to its Downtown San Francisco holdings 222 Sutter St. and 300 Grant Ave., Madison Marquette is the owner and developer of Bay Street, a 400,000-sf urban village located in Emeryville, CA.
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