Our May cover story Return of the Mall makes a case that enclosed regional malls not only weathered the recession better than many expected, but also seem positioned to continue to perform well as the retail recovery proceeds. The formats that were supposed to mean the death knell of the mall--mixed-use, lifestyle centers, power centers, etc.--have all had a much rougher go of things in recent years and face continued challenges.
Since we wrote that piece, more evidence has emerged that enclosed regional malls remain an attractive play.
Triple Five Group--the firm behind the West Edmonton Mall and the Mall of America--made the decision to enter the picture and try to revive the failed Xanadu project in Northern New Jersey. The New York Times has more about the firm and its plans. Both of its other giant retail and entertainment projects have proved to be successes throughout the downturn and are healthy today. And Triple Five is looking to bring some of that magic to New Jersey at a development that has vexed many others.
In addition, Australian limited property trust Westfield Group said it is upping its development goals in the wake of rapidly improving sales at its regional malls.
Meanwhile, in Boston Ashkenazy Acquisitions Corp. has reportedly reached a deal to acquire the lease of Faneuil Hall Marketplace from General Growth Properties for $136 million. Faneuil is one of the outdoor festival marketplaces General Growth acquired as part of its takeover of the Rouse Co. It reinforces the notion that General Growth is aiming to pare down its portfolio and focus more exclusively on the regional mall sector. It's also a healthy sign that firms are willing to come in take on and manage projects like Faneuil Hall. It's hard to imagine that this could have happened a year ago.
Lastly, we had CBL & Associates Properties has formed a joint venture with TIAA-CREF to invest in regional malls. The fact that TIAA-CREF is looking at malls again is another sign that the outlook for the sector remains bright.this week that
Taken together, I think all of these announcements reinforce the thesis of our cover story.