June 7, 2009
Mall’s Owners Negotiating for Forbearance
By Amy Wolff Sorter
GlobeSt.com
DENTON, TX-Feldman Mall Properties is seeking forbearance on a $30 million line of credit secured by the 765,000-square-foot Golden Triangle Mall. According to a press release from the company, an outstanding balance of $27.8 million remains.
Previous press releases issued by the company said that a deal tentatively agreed to by Inland American Real Estate Trust in late 2008 to buy the Golden Triangle Mall note (as well as notes to the Stratford Square Mall in Bloomingdale, IL and Northgate Mall in Cincinnati OH) fell through. As a result, the Great Neck, NY mall owner has had to turn to other sources to raise capital, but noted in a previous press release that finding funding in the current economic market will be difficult.
Feldman Mall Properties acquired the mall [http:///news/494_494/retail/143818-1.html] at 2201 S. Interstate 35 E in 2006 from Simon Properties for just over $39 million. Calls to Feldman Mall Properties were not returned by deadline.
Daniel Taylor, vice president with SRS Real Estate Partners’ Dallas office tells GlobeSt.com that the 30-year-old Golden Triangle is in a great location, right at the intersection of Interstate 35 and State Hwy. 288. Taylor, who is uninvolved with Feldman Mall Properties, but very familiar with the mall, says Golden Triangle is in direct competition with the retail component [http:///news/901_901/retail/160454-1.html]of the $850 million master-planned Rayzor Ranch, which is located directly north.
Because of the economy, however, construction on Rayzor Ranch has been halted. Furthermore, for a retail tenant to leave a traveled intersection such as Golden Triangle Mall’s and relocate to a new center is something retailers aren’t willing to do right now, either. “Retailers are sitting on their hands and waiting to see where the economy goes,” Taylor says. “No one’s likely leaving Golden Triangle right now.” But when things get better, he goes on to say, some of the Golden Triangle Mall tenants may opt to move into Rayzor Ranch.
Taylor says if that weren’t enough, competing retail centers are springing up in Flower Mound, TX, directly to the south. Furthermore, people in the Denton trade area have no problems driving about 15 minutes south on Interstate 35 to shop at the regional Vista Ridge Mall in Lewisville, TX.
Taylor explains that the best way to keep the tenants at Golden Triangle Mall is to do a complete overhaul of the mall. “Before the economy turned, we were seeing a lot of this, a lot of older malls getting turned inside out and re-created as open-air malls,” he comments.
For the property to really succeed, Taylor continues, an owner or developer needs to see it as a clean slate, rather than keeping it as a decades-old mall. “This requires someone to clean it up and retune it,” he comments. “Someone needs to have the vision for this mall, and the money to back it up.”