A recent sale of Northtown Mall in Blaine, Minnesota, highlights the struggles faced by mall properties in the United States. 4th Dimension, based in Hollywood, Florida, acquired the mall from Washington Prime Group for $31 million. This purchase price reflects a significant decline from the previous sale in 1998, when Glimcher Realty Trust bought the property for $54 million.
The mall occupies a 200-acre site and has approximately 645,000 square feet of leasable space. Despite the challenging retail climate, Northtown Mall maintains an occupancy rate of 87 percent. However, 4th Dimension has ambitious plans to revitalize the property. In addition to filling vacancies, the new owner intends to develop the surrounding outparcels. Ideas being considered include the construction of an extended-stay or four-star hotel, as well as incorporating multifamily mixed-use square footage.
The largest tenant within the mall is Becker Furniture, which occupies 183,000 square feet of space, accounting for over a quarter of the leasable area. Other anchor tenants include Hobby Lobby, Burlington, and Best Buy.
Principal Felix Reznick, the owner of 4th Dimension, already owns or co-owns around a dozen malls across the country. Within the past eight months, he has acquired four malls, illustrating his confidence in the sector.
Washington Prime Group’s difficulties are representative of the wider challenges faced by the retail real estate industry. The company filed for Chapter 11 bankruptcy protection in 2021, emerging with significantly reduced debt. During the second quarter of 2020, their rent collection rate stood at only 52 percent.
The sale of Northtown Mall at a discounted price is not an isolated incident. In March, a mall in West Los Angeles was sold by private real estate firm Laurus Corporation and Torchlight Investors for $30 million less than its purchase price from eight years prior.
– Northtown Mall: [Link]https://www.washingtonprime.com/properties/northtown-mall
– 4th Dimension: [Link]http://4thdim.com/
– Washington Prime Group: [Link]https://www.washingtonprime.com/
– Glimcher Realty Trust: [Link]https://en.wikipedia.org/wiki/Glimcher_Realty_Trust
– Becker Furniture: [Link]https://www.beckerfurnitureworld.com/
– Hobby Lobby: [Link]https://www.hobbylobby.com/
– Burlington: [Link]https://www.burlington.com/
– Best Buy: [Link]https://www.bestbuy.com/