The property is approximately 78% leased and is anchored by Trader Joe's, Ross Dress For Less, CompUSA, Famous Footwear, Rite Aid and Big 5 Sporting Goods. A source at DDR tells GlobeSt.com the acquisition price was $37 million. DDR says it will pursue a large-scale redevelopment of the mall.
Totem Lake Malls was built in 1973 as a two-story enclosed regional mall. At one time several anchor tenants in the mall reported the highest sales volumes of their respective chains, according to DDR. Since that time, the company says the property changed ownership and many of the local and regional tenants closed.
Despite that, the property remains extremely well located, as it sits five miles north of Downtown Kirkland with excellent visibility from I-405, one of the busiest highways in the region. As well, the population count within a five-mile radius of Totem Lake Malls is approximately 200,000, with an average household income of over $110,000.
Considering the attributes of the site and the supply constraints present in the Kirkland market, DDR believes the property represents a key location for new retail formats seeking entry in the Seattle Eastside submarket and will pursue a large-scale redevelopment of the asset.
Totem Lake Malls is the second property acquired by Coventry REA on behalf of Coventry Real Estate Fund II. The fund was formed with several institutional investors, with Coventry serving as the investment manager.
The fund and DDR are jointly making value-add retail plays throughout in the U.S. DDR co-invests 20% in each joint venture and is responsible for the day-to-day management of the properties. Pursuant to the terms of the joint venture, DDR earns fees for property management, leasing and construction management plus a promoted interest, along with Coventry, after return of capital to investors.
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