When Multifamily Makes More Sense for a Mall Than Retail
- Oct 02, 2020
The owners of the Connecticut Post Mall in Milford, Conn., are proposing up to 300 units of luxury multifamily housing for an 8-acre site on the property. If rezoning is approved, it would become the latest example of mall owners creating a mixed-use campus with housing and other components.
“Malls are always changing, and the landlords sitting still are the ones that are generally getting into trouble,” said Jon Meshel, senior vice president of mall owner Centennial. “Our desire is not to stand still. It is to put the best Class A opportunities on the campus to reinvigorate the property.”
The company acquired the mall in 2015 in a $1.1 billion, five-property transaction. Multifamily housing is being added at two other locations–Fox Valley Mall in Aurora, Ill., and Hawthorn Mall in Vernon Hills, Ill. Despite adding Dave & Buster’s and Boscov’s, which took over the vacated J.C. Penney space, there has been a 20 percent drop in visitors at the Connecticut center over five years, and the mall is facing challenges from e-commerce and the pandemic.
While city Mayor Ben Blake prefers office space, Meshel said the company’s research points to multifamily. He said Centennial would evaluate offices for a future phase, but it doesn’t make economic sense now.
In Mary Esther, Fla., Rea Ventures Group LLC and Radiant Partners are developing 229 units of luxury multifamily housing at the Santa Rosa Mall. Built on the site of the former Belk’s department store, Renaissance Santa Rosa should be completed in March 2021.
“Our belief is that adding the residential component to the mall will help transition the property from a single-use retail to a multi-use live-work-play environment, which is appropriate for the times,” said David Schonberger, managing partner of mall owner Radiant Partners.
If there is demand, Schonberger said, they will consider a second phase of housing, possibly for seniors. The company already added a self storage company and is also considering light industrial and office space.
Sector Insights rotates among market rate/luxury housing, workforce housing, low-income housing, student housing, senior housing and mixed-use.