Macerich Pays $290M for Market-Dominant Raleigh Mall
The purchase marks the REIT's entrance into the Southeast.
Macerich has entered the Southeast market with the $290 million purchase of Crabtree Valley Mall, a Class A retail property of approximately 1.3 million square feet in Raleigh, N.C. The California-based REIT plans to invest about $60 million in new redevelopment and leasing over the next three years.
The longtime owner of the 57.2-acre enclosed mall was CVM Holdings LLC, according to CommercialEdge data. Local media reported CVM Holdings previously put the retail center up for sale in 2022.
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Macerich funded the acquisition with cash and $100 million taken out from its revolving line of credit. The company expects to repay the money borrowed from the credit line within 30 days; by then, it will close on an expected $160 million two-year loan with two one-year extension options.
Macerich CEO Jack Hsieh said in prepared remarks the purchase fits in with the company’s strategic Path Forward Plan. He stated the REIT has successfully secured the execution of the plan with 62 percent of new leasing deals achieved to date, putting it well ahead of its 70 percent goal by year-end.
Crabtree Mall highlights
Built in 1971, the mall opened in 1972. It is the largest mall in North Carolina’s high-growth Research Triangle and has more than 200 tenants including stores and dozens of restaurants. Anchored by Belk and Macy’s, Crabtree currently generates $429 million in annual sales, $951 in sales per square foot and more than 8.7 million annual visitors, according to Macerich.
In addition to the anchors, retail tenants include Apple, Banana Republic, Belk Men’s Store, Brahmin, Brooks Brothers, Build-A-Bear Workshop, Chubbies, Coach, H&M, Lego, Michael Kors, Michael Kors, TAG Heuer, Tommy Bahama, Verizon, T-Mobile, Old Navy, Barnes & Noble, Bath & Body Works, Victoria’s Secret, Champs Sports, Game Stop, Clarks and Sephora.
Dining options include Kanki Japanese House of Steaks & Sushi, P.F. Chang’s China Bistro, The Cheesecake Factory, Seasons 52, Brio Italian Grill, Fleming’s Prime Steakhouse & Wine Bar and Chick-fil-A.
More Macerich moves
Macerich currently owns 41 million square feet of real estate, consisting primarily of interests in 38 retail centers. The REIT’s portfolio is concentrated in California, the Pacific Northwest, Phoenix and Scottsdale, Ariz., and the metro New York to Washington, D.C., corridor, including Virginia.
Last month, Macerich announced plans totaling more than $100 million to redevelop the 1.8 million-square-foot Tysons Corner Center in Tysons, Va. Part of the plan includes turning the mall’s west end, anchored by Bloomingdale’s and Macy’s, into a walkable retail, dining and entertainment district that will have upscale dining and a luxury market.
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The company is also undertaking major redevelopment projects at several other mall properties including Green Acres Mall in Valley Stream, N.Y., where construction began in May on a $150 million project. Macerich is demolishing a former Sears, Sears Auto Center and parking garage and will be adding an 80,000-square-foot ShopRite grocery store, The Cheesecake Factory and other modern retailers and eateries.
The redevelopment, which will take about two years to complete, will include adding outward-facing storefronts, landscaped green spaces, open-air dining and a new entrance at the northeast wing of the mall, according to Chain Store Age. The 2 million-square-foot center, which is one of the most visited properties in the Macerich portfolio, will remain open during the renovations.
Late last year, Macerich refinanced another metro New York property, a 968,000-square-foot shopping mall in Elmhurst, N.Y., with a $525 million loan. The retail asset was redeveloped in two phases between 2002 and 2004, expanding it from its original 605,000-square-foot size.
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