A New York mall operator just bought the struggling Seminole Towne Center in Sanford and plans to revitalize it by bringing in new retailers to fill the empty shells left by shuttered department stores.
Developed by Simon Property Group in 1995, the roughly 1.1 million square foot mall features more than 100 stores and restaurants at 200 Towne Center Circle. It’s located at the intersection of I-4 and S.R. 417.
“We’re very excited about it,” Mike Kohan, president of KRIG told GrowthSpotter. “It’s a great asset, in a great location.”
According to a deed recorded in Seminole County, the mall sold for about $52.35 million.
WPG purchased the mall in 2014 as part of a larger retail portfolio deal.
During a fourth quarter earnings call, WPG’s executive vice president and chief financial officer, Mark Yale, said the deal is part of a company strategy to transfer back remaining non-core enclosed assets, including Seminole Towne Center and Charlottesville Fashion Square Muncie Mall.
The developer is calling his project in downtown Sanford Magnolia Place and is hoping to attract a restaurant for the ground floor. The upper floors will each have four one-bedroom apartments .
By Mike Salinero
Mar 10, 2020 | 1:51 PM
The transfers would result in reducing over $75 million in debt from its current balance sheet, he said.
Earlier this week, WPG announced it would be temporarily closing its enclosed assets with an indoor common area in response to the coronavirus pandemic.
The deal with KRIG has been in play before any confirmed cases of the virus in Florida were announced.
In February, KRIG took over a $60 million mortgage on the property from Seminole Towne Center LP and Colfin STC Funding LLC, a company led by venture capitalist David Palame. The original principal amount was issued by Citigroup Global Markets Realty Corp. in 2011.
Over the years, Seminole Towne Center has lost big anchor retailers to bankruptcies like Sears, which announced its store would be closing in 2018 as part of a plan to close 63 stores nationwide.
Earlier this year, Macy’s also announced it would be closing this year as a part of a plan to close 29 stores nationwide.
Kohan said a trampoline park is opening at the former Sears site. “That’s really going to add value and foot traffic.”
KRIG specializes in purchasing endangered and troubled shopping malls. It owns a little more than 30 other indoor malls throughout the nation. The investment company is known to reposition malls, in part by replacing national chain stores with locally owned retailers.
Katy Welsh, a senior director for retail services at Colliers International, has worked with Kohan and his company in the past. Her team was contracted by KRIG to help lease the Indian River Mall in Vero Beach.
“Indian River Mall was also a Simon mall before,” Welsh said. “KRIG bought it and made it very successful."
She said the firm prefers service-oriented tenants like fitness retailers, medical and entertainment concepts to help turn malls into community centers.
Colliers International is not contracted to lease Seminole Towne Center, but Welsh said they are in discussions with KRIG to handle leasing.
Welsh told GrowthSpotter she’s received a lot of interest on the former Macy’s space, even despite the current coronavirus pandemic.
“It’s like waiting for a hurricane to pass,” Welsh said. “When we have a down economy, people lose jobs and it’s awful, but this is the best time to start a business.”
KREG previously owned the Lake Square Mall in Leesburg, but sold it in 2014 for $13.28 million. The current owner invested millions to make the shopping center an entertainment destination, bringing in a go-kart track, Winterland adventures and an arcade. It still has over 100,000 square feet of vacant retail space, according to its website.
New York-based Lightstone Group attempted to breathe new life into the former 104-acre Artegon Marketplace property in Orlando’s tourism corridor by focusing on artisan retailers. But the plan failed and the company ultimately ended up selling it at a loss to an affiliate of Miami-based Dezer Development in 2018.
Dezer is redeveloping the property into a mixed-use destination called Dezerland. Plans for the project consists of building luxury apartments at the property and developing a 500-car museum.