UPDATED: Partnership Buys Northwest Arkansas Mall, 2 Others

by Worth Sparkman  on Tuesday, Jan. 2, 2007 10:32 am  

Midwest Mall Properties, a partnership among Doyle Rogers and John Flake of Little Rock and Sam Mathias of Springdale, is buying three malls, including the Northwest Arkansas Mall in Fayetteville, the group announced Tuesday.
The price for the three malls is in the "$400 million range." The deal closed on Dec. 29.
Speaking to Arkansasbusiness.com, Flake said the deal for the malls was negotiated as a package, so he could not say how much the group paid just for the Northwest Arkansas Mall.
The Northwest Arkansas Mall is the second-largest enclosed shopping mall in the state with a total of 820,703 gross SF, according to Arkansas Business' most recent list.
The other malls in the deal are the Citadel Mall in Colorado Springs, Colo. (1 million SF), and the Crossroads Mall in Oklahoma City (1.2 million SF). All are owned by the publicly traded Macerich Co. of Santa Monica, Calif.
Rogers said discussions with Macerich began in 2001. The three originally wanted to buy only the Northwest Arkansas Mall, but Rogers said the other two properties eventually piqued their interest.
"We view this as a tremendous investment opportunity," Rogers said. "These are all class 'A' properties, each 90 percent or more leased. All three are anchored by nationally renowned retailers and are in fast-booming population centers. Each mall is in excellent condition and each has maximum potential for continued success." Macerich purchased the Northwest Arkansas Mall from Tri State Joint Venture of Maryland in December 1998 for $94 million.
Flake said that the group is not too concerned about one of his northwest Arkansas competitors, the new, open-air 980,000-SF Pinnacle Promenade that opened in Rogers in October.
"This [Northwest Arkansas] market is a good market we are pleased and comfortable with our business plan," he said.
Large Properties
The Northwest Arkansas Mall is anchored by a number of national department store chains including Dillard's, J.C. Penney and Sears.
Bridget Elkins, marketing manager of the Northwest Arkansas Mall, said the property had 100 percent occupancy in December. Even with temporary agreements that expired at the end of the 2006, the mall was leased at "95 percent or higher."
The mall sits on 122 acres on U.S. 71 near Interstate 540. It has more than 100 stores and restaurants. More than 450,000 people shop there each year.
At 1.2 million-SF, the Crossroads Mall is the largest of the three Midwest purchased. It is anchored by Macy's, Dillard's, J.C. Penney and Steve & Barry's. More than 1 million people shop there each year. Citadel Mall, with more than 1 million SF, has Macy's, Dillard's, J.C. Penney and Burlington Coat Factory. About 500,000 people visit each year.
The Management
Macerich will continue to operate and lease space at each mall, according to the news release. Arkansas banks that participated in the deal include Twin City Bank of North Little Rock, Chambers Bank of North Arkansas and Liberty Bank of Jonesboro. Williams & Anderson law firm of Little Rock represented Midwest in the deal.
Flake is a veteran real estate developer whose projects include the Metropolitan Bank tower in Little Rock. Mathias has developed more than 3 million SF of property in northwest Arkansas and Tulsa, Okla. His largest properties are Garrett Place in Tulsa and Fiesta Square in Fayetteville.
Rogers, a longtime banker, realtor and developer, is chairman of the Doyle Rogers Co. of Little Rock. He is chairman of Metropolitan Bank of Little Rock and built what are now known as The Peabody Little Rock and the Stephens Building.
Flake is also a principal investor of Orion Real Estate Services of Springdale.
In 2005 and 2006, Orion purchased $33.9 million in investment properties in Washington County, many from Mathias Properties of Springdale, including the 56,000-SF Mathias Plaza in Springdale, which sold for $2.6 million.
In August, Mathias told the Northwest Arkansas Business Journal he was liquidating some of his properties to pursue other investments. On Tuesday, Flake said that Orion buying some of the Mathias properties was exclusive of the mall deal.

 

 

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