Douglas Development Corp. has purchased a super-regional shopping mall in a suburb of Buffalo, N.Y., with plans to revitalize the struggling asset. The Washington, D.C.-based development firm led by Douglas Jemal acquired the 961,800-square-foot Boulevard Mall in the Erie County town of Amherst for nearly $30.1 million.
The transaction included the $6 million sale of an adjacent Wegmans grocery store. HFF, which has since been acquired by JLL, marketed the mall property in conjunction with Ten-X on behalf of LNR Partners. The shopping mall is located on a 64-acre site at 730 Alberta Drive, just off the corner of Maple Road and Niagara Falls Boulevard.
Sinatra & Co. Realty submitted the winning bid of nearly $24.1 million for the mall in an online auction in April. The following month, Jemal revealed that he had joined the development team along with RMS Investment Corp. The other two companies subsequently left the project, Jemal told The Buffalo News.
“De-malling” a retail asset
Completed in 1962 and renovated in 2000, the mall is tenanted by stores including Dick’s Sporting Goods, Macy’s, American Eagle Outfitters and Michaels. The Wegmans store measures about 120,000 square feet on a nearly eight-acre site with a long-term ground lease.
Despite its prime location on Niagara Falls Boulevard, where it is visible to more than 34,000 vehicles per day, the mall has faced the same challenges that have beset indoor shopping centers across the country. The mall lost its Sears and Macy’s Men’s anchor stores in recent years, and the appraised value of the property dropped from $159.5 million in 2006 to $26.9 million in 2018, according to Trepp data cited by The Buffalo News. Although the mall is located within a Qualified Opportunity Zone, the deal was not structured to take advantage of the tax breaks offered under the federal program, Jemal revealed.
Jemal told the newspaper that he will hire architects to redesign the property and create a sense of place in the mall, noting that the well-located property needs to be “de-malled.” The property will be rebranded as Boulevard Place and construction on the site is expected to begin next spring.
The JLL Capital Markets team that handled the sale included Jose Cruz, Kevin O’Hearn, Claudia Steeb, Michael Oliver and Ryan Robertson.
Douglas Development, which has a portfolio of 300 properties in the Washington, D.C., metro area, recently secured a $52.8 million floating-rate loan to refinance and lease a newly constructed office property in the city’s East End submarket.