Rotterdam Square is on the verge of being purchased by a downstate retail investor pledging to bring in more tenants and improve the standards at Schenectady County’s only indoor shopping mall.
Mike Kohan of the Kohan Retail Investment Group said he is poised to buy the sprawling center off of Campbell Road from the Macerich Co. sometime next week, possibly as early as Monday. He said his goal will be to invest in the property and bring in new tenants that will revitalize the mall.
“We have to bring in some more tenants, adjust the issues with maintenance and work with the community to bring it to standards that are acceptable,” he said Friday.
Kohan — who also goes by the name Mehran Kohansieh — wouldn’t discuss the purchase price of the mall prior to closing on the deal. He said he’s been interested in purchasing the property since the fall.
“It’s been on the radar for a couple of months,” he said.
Karen Maurer, a spokeswoman for Macerich, did not return calls for comment.
Macerich had scheduled a two-day online auction for the property and set the starting bid at $2 million. But the auction was abruptly canceled earlier this month.
Built in 1988, Rotterdam Square comprises 463,987 square feet of retail space and about 70 acres of land. The structure, valued at more than $30 million, includes a 10-unit food court, restaurant, movie theater, three anchor stores and more than 50 retailers.
The mall’s three anchor stores are Macy’s, Kmart and Sears. Sears recently renewed its lease for five years, ending in 2018. Macy’s owns its 120,000-square-foot store and the seven acres of land on which it sits.
Other major tenants include Gap, TJ Maxx, Shoe Dept. Encore, American Eagle Outfitters and Victoria’s Secret. The mall also has a long-term lease with Rotterdam Square Cinema, the seven-screen theater that completed $500,000 worth of renovations in 2010.
Kohan Retail Investment Group owns about a dozen properties spread across the United States. These holdings include the 926,000-square-foot Tulsa Promenade in Oklahoma, the 429,000-square-foot Crystal River mall in Florida, the 423,967-square-foot Staunton Mall in Virginia and the 265,000-square-foot Mayberry Mall in North Carolina.
Ray Gillen, Schenectady County’s commissioner of economic development and planning, said he was encouraged after having a phone conversation with the prospective owner, whom he declined to name prior to the closing. He said the new owner has done revitalization projects at other malls around the country and seems like a good fit for Rotterdam Square.
“The first step is to close the transaction, which they have not done yet,” he said.
Macerich bought Rotterdam Square eight years ago in a $2.3 billion acquisition of its Rochester-based parent company, Wilmorite Inc. The buyout came with 11 regional malls, including Wilton Mall outside of Saratoga Springs, and two open-air shopping centers.
Rotterdam Square has struggled to maintain a high occupancy rate for years, especially during the height of the economic downturn when roughly a fifth of the mall’s storefronts were empty. The mall’s occupancy was listed at 86.9 percent just prior to the online auction.
Both of the Capital Region properties owned by Macerich are reportedly on the market as the Santa Monica, Calif.-based company attempts to divest non-core malls. Wilton Mall was listed among 17 so-called Class B malls — ones generating at least $350 per square foot — being sold by the company through Eastdil Secured, according to a report by Reuters published on Dec. 7.
Larger real estate investment trusts have been selling off lower-performing malls in an attempt to bolster portfolios. Investors are more likely to pay premium prices for companies with higher-quality malls.