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BLOOMINGDALE, IL-Great Neck, NY-based Feldman Mall Properties, Inc. has bought the 1.3-million-sf Stratford Square Mall for $93.1 million, promising to raise the center's profile and tenant mix. The mall's competitors include Woodfield Mall in Schaumburg and Oak Brook Shopping Center in that DuPage County suburb.
Using a $75-million loan pegged at LIBOR plus 125 basis points, the Long Island retail reposition specialists will spend approximately $20 million on capital improvements, including upgrading and expanding a four-screen movie theater and adding sit-down restaurants. Now anchored by Kohl's, Sears, Carson Pirie Scott, Marshall Fields, JCPenney and Burlington Coat Factory, the center may get at least one more "junior" anchor tenant, Feldman Mall Properties officials say.
Occupancy at the center, sold by Oak Brook-based Urban Investment and Development Co., was most recently 90.4%. However, shop tenant occupancy excluding temporary tenants was only 68.7%, and the center at the southeast corner of Schick Road and Gary Avenue generated sales in 2003 of just $275 per sf.
"We intend to immediately implement an intensive marketing campaign aimed at obtaining national tenants whose attractiveness and product mix will sharply increase shopper traffic and demand," says Feldman Mall Properties executive vice president of leasing Scott Jensen. "The combination of the anticipated physical upgrades and our aggressive leasing and marketing programs will help drive tenant sales throughout the mall, resulting in higher revenues and rental rates."
Based on a pro forma for 2005, Feldman Mall Properties expects an 8% yield on its investment in northwest DuPage County.
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