STERLING – After 6 months of ownership, Brookwood Capital Advisors will be putting Northland Mall on the auction block on June 13.
That’s not the biggest news, though.
T.J. Maxx and Big Lots have signed letters of intent to join the mall lineup, Brookwood founder Ben Hamd said. Famous Footwear, which always locates with a T.J. Maxx, would come, too.
Ross Dress for Less is signing a letter of intent this week, Hamd added.
That doesn’t mean their tenancies are done deals.
A letter of intent outlines the specifics of a proposed business deal. It’s not a binding agreement; it’s a document that shows that both sides are committed to making into a final deal, and it clears the way for a definitive agreement, which would be binding.
In addition, AutoZone, O’Reilly Auto Parts, Chipotle, Panda Express, Dunkin’ Donuts, and Thorntons have expressed interest in Northland Mall, Brookwood said on the auction site.
So, with Brookwood announcing a month ago that the mall was now at 100% capacity, where would the four potential new businesses go?
The space into which Indiana-based Midwest Furniture is moving — the former JCPenney site — would be split, Hamd said.
The letters of agreement include requests for some improvements to the space, and that would take time and effort that doesn’t jive with the timing of the auction, so it will be up to the new owners to handle the final negotiations with those stores, he said.
”The next person can finish what we started.”
Those retailers “are trying to get into the market in general,” and so also might be, or are, approaching other properties, including the Kmart site across the street, he said. (Highlands Development bought that building, leased a portion to the Department of Veterans Affairs for a clinic, which opened in January, and plans to lease the rest of the space and some outlying buildings to a mix of business and retail outlets.)
“It will happen in Sterling in the next year or two, whether it’s here [in the mall] or across the street,” Hamd said.
So with the rebirth of the mall into a bustling retail space, why sell?
It’s not that Brookwood is displeased with its new investment. Quite the opposite.
The foundering mall at 2900 E. Lincolnway was at 30% capacity when the Tennessee-based investment firm bought it in late January for $1.7 million.
As of a month ago, 100% of the spaces either will be filled or are planned to be, signed leases in hand.
The jewel in the crown is Hobby Lobby, which signed a 10-year lease and is set to open in January after it remodels the former Bergner’s department store space on the west end of the mall.
In addition, Brookwood had new HVAC units installed, and the entire parking lot recently got a new coat of asphalt.
“Our work is done here,“ Hamd said. “We feel like we have done the most that we can do here in terms of improvement.”
He said he is more than pleased with the rate at which local businesses stepped up to take advantage of Brookwood’s offer of six month’s free rent while establishing themselves, and promised that that status would not be affected by new ownership.
“All those leases are set in stone,” he said.
The online auction will run June 13-15 on RI Marketplace; the starting bid is $1.5 million. The mall’s net operating income in $1.42 million a year, Brookwood said.
“I would love to see it go to a local owner,” Hamd ssaid. “We’ve never had it happen in 10 years, but I’m hopeful.”
This is Brookwood’s business model: It buys closed or flagging shopping centers, revives them to full capacity, then sells them. Its motto: “Retail redevelopment. That’s all we do.”
“Our secret sauce is leasing,” it says on its website, brookwoodcapitaladv.com. “We get creative with rent and structure centers with the perfect tenant mix, in order to ensure long term stability for the project.”
At Northland, the perfect tenant mix includes not only Midwest Furniture, but also locally owned businesses that include boutiques, an arcade, a toy store, a coffee bar, clothing stores, a vintage resale shop, even a tattoo parlor.
They will be joining established national retailers, among them Dunham’s Sports, Planet Fitness, Bed Bath & Beyond, Claire’s, and Maurice’s – the lease payments from which make the free six months offer possible.
Source: The Daily Chronicle