Florida-based firm 4th Dimension Properties recently acquired Wilmington’s Independence Mall. (Photo by Emma Dill)
By Emma Dill
Felix Reznick, principal with the new owner of Independence Mall, 4th Dimension Properties, said the company is already working to recruit new tenants and has plans to hold more events and update the mall’s hours.
The Florida-based firm owns a portfolio of 12 malls, including Independence Mall, across the U.S., Reznick said.
Deed records show the company bought much of the 800,000-square-foot mall and a nearby property from Rouse Properties, a subsidiary of New York City-based Brookfield Properties, for more than $50 million in a deal that closed earlier this month.
Rouse Properties had owned Independence Mall since 2017 after the previous owner defaulted on a $110 million loan. The firm reportedly paid $45 million for the portion of the mall that served as collateral for the loan. Following its acquisition, Rouse Properties made investments in the mall’s interior, along with adding new dining and retail options and a multi-tenant building.
The Greater Wilmington Business Journal recently caught up with Reznick to discuss his company’s acquisition and what’s next for the mall under its new ownership.
Q: Can you give an overview of 4th Dimension Properties and your role with the company?
A: “I’m the principal owner, and I’ve been at this for about eight years, buying and selling malls. Generally, they’re in either tertiary or secondary markets. Generally, we buy malls that might be either defaulted or have issues. Recently, we’ve been buying malls that have no issues, and this is one of them. So, it’s a little bit of a different direction that we’re going into. We really love the mall in the area. I’ve been to Wilmington twice already, and I even rode the train in the mall … I believe in trying everything out.
“We buy these properties, and we tend to fill them up. We work with local tenants. We try to bring them in, and we have a number of national (tenants) that we work with that like to follow us that know we do a good job. We already have a number of deals that I can’t really discuss because they’re in LOI (letter of intent) form. They’re not fully executed yet, but we basically have two new deals for the mall that will occupy space already, and we’ve only owned the mall for a little over a week.
“We own a mall in Washington that’s called Bellis Fair. It was also an acquisition where Brookfield was the prior owner, and we took it from about 73% occupancy to, I think it’s like at 88% at this point. It takes time – that took about two, two and a half years. It’s not something that you do overnight, but we tend to attract people. We’ll throw more events, typically, than prior owners. We tend to focus on that, not necessarily spend a lot on the events, but make them interesting and creative.
“We’re looking for the tenant that makes the mall a little, what I like to say, ‘sticky,’ so people would stay there. We like the dance studios, for instance, for kids. (We) love the mom, dad and nanny, or just mom/dad, or mom or dad just coming in and maybe sneaking away and going to shop, or maybe afterward, going to the food court with their kid, and that kind of stuff. Indoor soccer, we’ve done. We’ve done indoor play areas, bouncy houses, other things of that sort … I think there’s plenty of room for maybe a bookstore, maybe something else, but we’re working on it.
“If people want to contact us and discuss leasing space, we’re available … We’re really hands-on. We get stuff turned around pretty quickly, so decisions are made real fast.”
Q: What is the current occupancy rate at Independence Mall?
A: “It’s tough to say, because you have a power center element (referring to stores without direct entry into the mall) and you have a regional mall element. If you combine the two, it’s probably in the low 80%. If you separate them, then one of them is substantially more occupied, which is the power center, than the regional mall part of it. We have a couple of deals on the table. One of the deals is for the regional mall area that’s going to occupy nearly 10,000 square feet.”
Q: How did this acquisition come about?
A: “The market is kind of a niche market for buying these malls, and there are about three top-known regional brokerage firms and brokers that are the people who market these malls. There was a gentleman … who was marketing this mall for Brookfield, and he sent me the information.”
Q: So, Brookfield was looking to sell?
A: “That’s right.”
Q: What was the timeline for acquiring Independence Mall?
A: “I found out it was for sale in April, I think, and we closed in August. There was a bidding process, and I won, and that was it.”
Q: Is that a pretty typical timeline for a mall acquisition?
A: “When malls go on auction, (the sale is) substantially faster. I’ve bought a mall that was on auction for maybe a month.
“It’s an interesting business that I never necessarily thought I’d be going into … For 23 years, I was an attorney, and I started delving into this about eight years ago, just through some minor investment. And then I really got interested in it. Now I’m not a practicing attorney anymore, and this is all I do, and we have over 300 employees nationally.”
Q: As you looked at the property, what attracted you to it? What did you see in the mall, as far as potential?
A: “Well, I think the area is fantastic. I think the growth in the area is great. I love the mix of the out parcel with the power center and the regional mall. I think what I like about it is sometimes we’ll get a tenant that doesn’t necessarily fit in the regional mall, but they could fit in a power center and outlet, or vice versa. So you have every aspect here, and you have the ability to attract more tenants that way.
“I think it’s an untapped place. I think I could really bring a lot more tenancy here and a lot more life here. It’s got a ton of life right now, but I think it’ll only grow.”
Q: Besides adding more events, are there any other changes people will see day to day as they’re going to the mall? Is there anything else you’re looking to reinvest in or change?
A: “It’s in great shape, the mall. They spent a lot of money in capex, basically, to make sure that the mall is in great shape, so as far as that goes, no, not really. I think it’s pretty secure, pretty clean. I visited it twice, and I was pretty impressed.
“I think just more events to bring in more people, maybe bringing in different people. I like having different types of stuff – I’ve had auction houses, you name it, I’ve had it in these malls to bring in a different type of group of people.
“One other thing that we’re strongly considering, and we’re going to implement, is opening the mall earlier, so instead of opening at 11, we’ll open at 10. We’re going to go back to the pre-COVID hours. I noticed when I visited that there were a lot of people there who were there at 10:30 waiting for the stores to open.”
Q: Based on deeds, we found that the purchase price was a little over $50 million. Can you say how much you paid for the mall?
A: “I can’t, but you’re in the ballpark.”
Q: Is that price similar to what you’ve acquired other malls for?
A: “It varies, but we had another one that was pretty close in price that’s in Washington state and another one in Minnesota that’s not that far off.”
Q: Is there anything else you want to add about the mall?
A: “I just want people to know that the mall is going to get better. There’s going to be more to do. It’s going to be open longer. We’re going to put in more stores, so come shopping.”