Vista Ridge Mall, which was turned over to its lender more than a year ago has been sold. That means the struggling regional shopping mall may see some uplifting redevelopment dollars soon.
The mall was sold for $17.3 million, far short of the $64.3 million balance on the loan and the most recent appraised value of $34.5 million. The new owner hasn’t been disclosed and may not be until the sale closes, probably at the end of October, according to an attorney for the loan servicer. The mall was sold during an online auction last week.
"We met with several potential buyers prior to the auction," said Lewisville’s community relations and tourism director James Kunke. "It’s been an important part of our retail sector since it opened."
"Everyone knows the mall has struggled," Kunke said. "There are a lot of ways to get it back up to speed. It’s ready for an investment. It needs a boost."
Fort Worth-based Woodmont Co. has been managing the mall in recent months, but declined to identify the new owner or comment on operations.
What was sold is the 376,023 square feet of the mall’s common areas and the store space other than the anchors. Each department store owns its building and some of the parking lot.
The two-level, 1.05 million-square-foot shopping center is only 72 percent leased, according to LNR Partners, the firm that has been servicing the loan since Rouse Properties dropped off the keys as it faced foreclosure.
"Sales differ based on property history, current market statistics, etc. So it’s hard to say whether they usually swing one way or another," said Sean Barrie, research analyst at Trepp LLC. This time, "the final bid of $17.3 million fell quite short."
Dallas real estate investor Sam Ware’s Dreien Opportunity Partners has offered to purchase Plano’s Collin Creek Mall. The same partnership purchased J.C. Penney’s Plano headquarters in January. Ware’s purchase of Collin Creek, built in 1981 on the southwest corner of 15th Street and North Central Expressway, is expected to close soon. That mall was marketed by real estate brokerage firm Avison Young.
Vista Ridge, a classic 1980s mall, still has its four department store anchors, Dillard’s, J.C. Penney, Macy’s and Sears, and a Cinemark Theater. Most malls that end up back with a lender have lost one or two anchor stores. It’s also located at a major intersection 22 miles north of Dallas in a fast-growing area of Denton County. But with the multiplying rooftops came more retail to compete with the mall that got there first, a common scenario across America’s suburbia.
Flower Mound, Lewisville and Highland Village have added almost 5 million square feet of retail space in the last 15 years, doubling that area’s retail space, according to report from Dallas-based Weitzman. During that time, online shopping has accelerated posting annual gains in the double digits.
The city’s coffers and the mall’s struggles together illustrate the shift to online shopping.
Vista Ridge Mall is now the second largest generator of sales taxes in Lewisville, after being No. 1 for decades. It was supplanted as the biggest sales tax generator last year when the 800,000-square-foot Bed Bath & Beyond online fulfillment center opened. That’s why Lewisville and other area cities have been actively going after online fulfillment centers of national retailers.
Lewisville is motivated to see the mall turn around.
The city will help the new owners "with making connections and spreading opportunities to others," Kunke said. Unlike some cities, Lewisville doesn’t have revenue that’s dedicated to economic development.
Over the years, the mall’s sales taxes dipped as new competition opened.
"When Grapevine Mills opened in 1997 sales taxes dipped, but recovered," Kunke said. That happened again when Stonebriar Centre opened in Frisco in 2000.
Then adjacent towns of Highland Village and Flower Mound opened new lifestyle and big box centers in 2007 and 2008 and retail options have continued to grow in every direction, he said. "It’s a very competitive market."
According to real estate firm Weitzman, the vacancy rate for the Lewisville-Flower Mound- Highland Village area was 9.14 percent last year. That’s better than the post-recession years, but still higher than the overall Dallas-Fort Worth market, which had a retail vacancy rate of 7.4 percent last year, according to Weitzman.
"There are still thriving businesses at the mall and the anchors are doing well," Kunke said.
Some redevelopments have kept the big stores and theater open and redevelop the rest of the space to other uses – office, hotel, fitness centers and apartments.
"A new owner may make a lot of changes, but one thing that won’t change," Kunke said, "Vista Ridge has been important part of the community for years and will be important 25 years from now."
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