Ian Ritter is national online editor of GlobeSt.RETAIL.
NEW YORK CITY-Feldman Mall Properties isn't interested in building up a large portfolio of centers and trying to compete with Simon Property Group and General Growth Properties, according to Larry Feldman, the company's CEO. Instead, the Great Neck-company is concentrating on only owning a handful of malls at a time that it will redevelop and sell, he explained here during the NAREIT's Institutional Investor Forum.
The REIT is doing just that with its 700,000-sf Foothills Mall in Tucson, which it acquired in 2002 and has redeveloped at a cost of $65 million, including the purchase cost. Additions to the mall have included a remodel of a Loews theater into a stadium-seating venue, a Nike Outlet Factory store and other tenants. And within one year, the landlord will be ready to sell off the entire mall or a portion of it to a joint-venture partner, Feldman said.
The company is searching for more malls to redevelop into stabilized properties. Though Feldman targets underperforming centers, "you should not think of us as a class B mall owner," he said, since the REIT renovates them into class A developments.
Plus, redevelopments are less costly, sometimes less than half the price, than constructing a new center. "Building a brand new mall is somewhat like building a nuclear power plant," Feldman said. "It's very, very difficult."
At it's peak, Feldman will own 10 to 12 properties at a time and have six to seven redevelopments under way simultaneously, the company's chief predicted. The company currently owns four malls and its about to close on two more, the 1.1-million-sf Northgate Mall, outside of Cincinnati, and the 963,000-sf Tallahassee (FL) Mall. In the last six months Feldman has acquired $350 million in assets.
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