Colonial Properties Trust said last month it was putting six of its malls on the block while it considers entering the multi-family residence and lifestyle centers. Colonial spokeswoman Linda Geiss says a lifestyle center could be built in the firm's current business regions: the southeastern U.S. and Texas.
For sale are: the 1.4 million-square-foot Colonial Macon in Macon, Ga.; the 555,000-square-foot Colonial Mall Temple in Temple, Tex.; the 517,000-square-foot Colonial Mall Gadsden in Gadsden, Ala.; the 423,000-square-foot Colonial Mall Staunton in Staunton, Va.; the 415,000-square-foot Colonial Mall Burlington in Burlington, N.C.; and the 206,000-square-foot Colonial Mall Mayberry in Mount Airy, N.C.
Geiss says the company does not see this as plan to exit, but rather, a way to recycle its assets. “We've had some interest shown in these malls,” says Geiss. “So we thought we would start there.”
The company recently acquired four retailin southern Florida, including the 221,000-square-foot Boulevard Square in Fort Lauderdale. Colonial's announcement comes a month after General Growth Properties said it would buy real estate developer Rouse for $7.2 billion. Earlier this summer, Simon purchased outlet mall and shopping center operator Chelsea Property Group for $3.5 billion.
Whoever buys Colonial's malls probably will not be paying such a hefty price. Morgan Stanley analysts placed the total sale price for all six malls between $290 to $330 million, with the portfolio having an average C+/B- quality.
With average sales of $288 per square foot, the pool of buyers is expected to be limited, according to analysts. Quality among the six malls ranges from the Sears- and Dillards-anchored Macon Mall being the best of the lot, to the Kmart-anchored Mayberry Mall.