By the numbers, Namdar Realty Group, the privately held New York investment company owned by Igal Namdar, paid a fire-sale price for Concord’s Steeplegate Mall.
The 10-building shopping mall, valued at $83 million in 2008, was long one of the city’s major sources of tax revenue. Namdar bought it for $10.3 million, slightly more than half the assessed value of the mall’s 51.5 acres and less than half its total $25.3 million assessment.
Will Concord taxpayers take a hit? Yes, but the sale was probably the best outcome possible for the near traffic-less, half-vacant mall.
America is filled with empty or half-empty shopping malls. They are no longer a dream destination for shoppers or even for teens who need a place to hang out. The rapid growth of online sales and deep discount stores put an end to hopes for their resurrection as retail giants, but some can be repurposed.
Namdar, which has been buying distressed malls and commercial real estate all over the nation, is betting that it can make money on Steeplegate. It’s a good bet. Banks wrote off nearly $50 million in debt owed by the mall’s previous owner. Namdar wound up paying about $20 per square foot for the 480,000-square-foot mall.
Namdar, said a commercial realtor familiar with the company, buys only about one out of every five properties it investigates. Many are badly deteriorated. Concord’s mall, by contrast, is in fine shape and its design, though 26 years old, is not badly outdated. Namdar could probably make a tidy profit even if it charges bargain rents. The risk, of course, is that one of its three remaining anchor tenants, Sears, JCPenney or Bon Ton, could leave or go bankrupt.
Namdar, which does not discuss its purchases or its plans for them, continues to own and operate the malls it buys. It solicits tenants from any sector. Retail alone, the company believes, can no longer sustain malls, particularly large ones. Among Namdar’s tenants nationally are churches, medical offices, restaurants, educational institutions, gyms, and large and small retailers.
Will a mall with cheap rents and plenty of parking be a drain on Concord’s newly renovated Main Street? Developer and building owner Steve Duprey doesn’t think so. The markets, he said, are different. Downtowns, Concord’s included, offer boutique and specialty stores, restaurants, high-end office space and a distinct character. Malls, after all, will always be malls.
Judging by where it has purchased other malls, turning around Steeplegate shouldn’t be difficult for Namdar. The company recently bought malls in the depressed auto industry cities of Detroit, Flint and Ypsilanti, Mich., along with Cleveland and some of the hard-hit towns in the Rust Belt.
Residents of Concord and the surrounding area enjoy higher incomes than their counterparts in much of the country and the state’s unemployment rate is among the lowest in the nation. The mall area, despite the empty, cavernous former home of Circuit City, remains a vibrant retail destination and the retail neighborhood is safe.
Perhaps we’re being too optimistic, but given the potential alternative – an empty mall that was a drain on police and fire resources – Namdar’s purchase is promising.
We’re eager to see what Steeplegate becomes in its next life.