TUCSON-Larry Feldman is back. The premier real estate player has just put up $54 million for a 482,351-sf Tucson mall as he parlays Arizona properties into a portfolio for his reborn Feldman Equities, now that his New York portfolio is gone.
Feldman's Tower Realty Trust properties are in the hands of Melville, NY-based Reckson Associates Realty Corp. So, the real estate giant tells GlobeSt.com, he's turning his attention to Arizona, where demographics provide greater opportunity to buy distressed or value-add properties--the precipitating factor for the location shift.
The purchase of Tucson's Foothills Mall, situated on the northwest corner of Ina and LaCholla boulevards, pushes Feldman Equities' budding portfolio to more than 1.4 million sf of retail and office space in Arizona and Florida. He declined to go into detail about future buys, but did say there will be an aggressive pursuit for acquisitions.
Feldman describes the 95%-occupied Foothills Mall as a "tweener," saying its size and location in a tertiary market make it a value-add proposition. There is enough room to add 144,820 sf plus it comes with five pad sites. "The mall," he says, "lacks two or three good size boxes to become a really top mall."
Right off the bat, Feldman and his partners plan to sink an additional $4.5 million into upgrades, promotions and plotting the expansion. Feldman's long-time Arizona partners, Scott Jensen and James Bourg, came in on the buy as did Bruce Ash of Paul Ash Management Co. LLC, a multifamily and commercial real estate company.
Feldman says he will retain the "discount" theme in any expansion plan. The tenant roster now boasts such well-known discount retail names as Ross Dress for Less, the Nike Factory Store and Saks Off 5th Ave. But, the mix does include such traditional stars as Barnes & Noble and Linens N Things and sundry entertainment retailers.
Feldman says the existing "discount" retail roster attracted him to the property, which is nestled in a trade area where the median income is $63,000 annually. The line-up is simply a perfect fit for the middle-class customer base. "We are confident that discount retail malls will continue to be successful through a possible recession era, as tightened disposable personal income will migrate to these discount retailers versus the high-end retailers," Feldman says.
Jan Fincham and Patrick Dempsey, both of Lee & Associates Arizona in Phoenix, negotiated the sale for buyer and seller, Fort Worth-based Hillwood Development Corp., a Perot Co., and joint venture partner, General Electric Capital Corp.
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