2007 economy battered Colonie Center owner

Tepid consumer spending and tighter credit markets delivered a one-two blow to Colonie Center co-own
PHOTOGRAPHER:

Tepid consumer spending and tighter credit markets delivered a one-two blow to Colonie Center co-owner Feldman Mall Properties last year, resulting in an annual net loss.

Feldman Mall, the Long Island real estate investment trust that owns four malls and co-owns three others, swung a net loss of $17.1 million, it reported late Monday.

Feldman Mall’s funds from operations — earnings minus depreciation and amortization expenses — also headed into the red last year. It dropped to -$4 million from $2.7 million in 2006.

Like mall REITs across the country, Feldman Mall is struggling with a retailing industry that is increasing taking a defensive stance as consumers curb discretionary spending. That trend is prompting retailers to pare back expansion plans. Such pullbacks impact Feldman Mall’s leasing activities.

The REIT also noted that tenants are renewing leases without reimbursement provisions, hurting company revenues, which declined $600,000 during the fourth quarter.

Feldman Mall’s stock plunged Tuesday, falling 39.4 percent to $1.60 by the close of trading on news of its losses. It continued its gyrations Wednesday, rising 20 percent to close at $1.92.

Last June, Feldman Mall hired the Friedman, Billings, Ramsey & Co. advisory firm to explore “strategic alternatives” that would increase the value of its stock. They considered several potential capital raising and asset sale options. But the nation’s credit crunch, which arrived in earnest last summer, dampened those prospects.

Despite Feldman Mall’s financial woes, its mall in Colonie is performing strongly. The REIT, which purchased the Colonie Center in February 2005, is on the verge of completing a $110-million renovation at the mall. It will mark the completion of that overhaul with the May 16 grand opening of a 13-screen Regal Cinemas.

Since the Turner Construction Co. started renovations in November 2005, the mall has received a new interior and new junior anchor tenants, such as an L.L. Bean retail store and a Barnes & Noble bookstore.

By Dec. 31, the 1.2 million-square-foot mall’s sales per square foot was $322.77, up 4.8 percent from a year earlier. Its year-end occupancy rate including temporary tenants was 90 percent.

Categories: Business

Leave a Reply