The former Springfield Mall property — currently under major renovation — soon will change hands once again.
New York–based Vornado Realty Trust announced in a news release last month that once renovations are complete it will sell the property to Pennsylvania Real Estate Investment Trust in exchange for $465 million, including $340 million in cash and $125 million of “PREIT operating partnership units.”
According to a PREIT news release, that means that Vornado will become a “passive” investor in PREIT and will be subject to an equity ownership limit of 9.9 percent of the Pennsylvania firm.
The release also states that Vornado will complete the ongoing renovation of Springfield Town Center’s non-anchor space and that PREIT and Vornado will jointly lease the property effective immediately and through closing, which will occur two weeks following completion of the redevelopment and the achievement of 75 percent occupancy of non-anchor space and the opening of Dick’s Sporting Goods and Regal Cinema, or March 31, 2015, whichever is earlier.
PREIT says that in the deal it also becomes entitled to develop land surrounding the mall in accordance with existing zoning, which permits the construction of an additional 3 million square feet of retail, residential, office and hotel space.
Vornado purchased Springfield Mall in 2006, promising to develop the deteriorating mall into what it termed a “lifestyle center” complete with retail, office and hotel space.
According to the PREIT news release, the 1.35 million-square-foot retail property, comprising 642,000 square feet of anchor space and 703,000 square feet of non-anchor space, will hold its grand reopening on Oct. 17, 2014.
The release also states that the non-anchor space at the property is currently 30 percent leased by the following retailers: Michael Kors, H&M, Chico’s, Pandora, Francesca’s Collection, Maggiano’s Little Italy, Yard House Restaurant, Wood Ranch BBQ, LA Fitness, Regal Cinema and Dick’s Sporting Goods. Additionally, over 175,000 square feet of leases are being negotiated. The mall is anchored by Macy’s, Target and J.C. Penney, all of whom remain operational while the mall is closed for construction.
Nancy-Jo Manney, executive director of the Greater Springfield Chamber of Commerce, said that PREIT and Vornado are working closely together to ensure that there will be a nice mix of high-end tenants. “That is the key to making it successful,” she said. “I have seen PREIT leasing agents in Springfield working at making that happen, and that seems like a good sign to me.”