Boulevard Mall, the oldest enclosed shopping mall in the region, is up for sale – for the first time in more than 50 years.
The surprise recent move by Forest City Enterprises could transform the local retail ownership landscape, as the region’s No. 2 mall is one of the largest retail properties to go on the market in many years.
However, it’s not expected to have any immediate impact on the mall’s stores or shoppers, as there’s no definitive buyer or agreement, nor final decision to sell.
“We’re business as usual here,” said Brian Calvert, the mall’s general manager.
Forest City built and opened the mall in 1962, and putting it up for sale was a difficult decision, according to spokesman Jeff Linton.
“You always have a bit of an emotional tie to any of the properties that you develop. This one has a special place in the history of the company, so it was not an easy decision to put it up for sale,” he said. “But we’ve had to make a lot of tough calls in executing this strategy to make the company stronger and more competitive for the future, and really focus on high-quality assets in the best markets.”
Forest City Enterprises is seeking to unload the mall, one of its oldest legacy properties, as part of a companywide strategy to refocus its business on larger and more “core” markets, said company spokesman Jeff Linton. The development and management firm, which reorganized last year as a real estate investment trust, also wants to reduce its debt to bring it more in line with its investment peers.
Forest City did not indicate how much it was seeking for the region’s oldest enclosed mall – also the first one it ever developed. The Cleveland-based company listed the property with national brokerage firm CBRE, including Buffalo-based broker Michael Clark, who said it’s “not unusual for things at this level not to have a price on it.”
“Generally, there isn’t a publicized asset price in this sort of a sale,” Linton said. “It’s negotiated with individual serious buyers.”
Still, it’s likely to be one of the area’s largest and most expensive deals, given the mall’s size, prominence, history and sales.
The mall, which was renovated or expanded in 1978, 1981, 1994, 1997, 2000 and again last year, is at Niagara Falls Boulevard and Maple Road, although its address is 730 Alberta Drive. It’s anchored by two Macy’s stores, JCPenney, a two-story Sears, Buy Buy Baby, Michael’s H&M and a new 55,000-square-foot Dick’s Sporting Goods. In all, it has more than 100 stores, kiosks and restaurants, with about 90 percent occupancy. Macy’s and JCPenney own their stores, while Sears’ lease expires in 2020. The new Dick’s replaced the mall’s food court, including a popular carousel. The mall has 962,091 square feet of total space and 336,000 square feet of gross leasable space.
According to the CBRE brochure, the mall’s annual net operating income is $8 million, with average annual sales for permanent mall retail tenants of $339 per square foot. And there’s a population of 323,312 people within a five-mile radius, with an average household income of $67,086.
Forest City, which dates back to a lumberyard company founded in 1920 by the Ratner family, is a publicly traded company with more than $8.8 billion in real estate assets around the country. It buys, develops and manages commercial, residential and retail properties, and currently has 114 apartment communities, 38 operating specialty retail centers and regional malls, and 37 office buildings.
The company, which is listed on the New York Stock Exchange, went public in 1960, but converted last year to a real estate investment trust for tax reasons. And it’s been refocusing on what it has identified as its core markets and businesses, selling assets that don’t fit and using the proceeds to either pay down debt or acquire new properties that match its goals. That will make it more attractive to investors when compared with other similar companies.
Linton said its core markets include New York City, Washington, Denver, Dallas, Boston, Los Angeles and San Francisco – but not Western New York or even its hometown of Cleveland.
“Buffalo is not a core market for Forest City. It is what we refer to as a legacy market, just as Cleveland is,” he said. “Boulevard is a terrific asset and will be a great acquisition for the right buyer. It will continue to be an important part of the retail scene in the Buffalo area, but it doesn’t really fit with our strategic direction as a company and our focus on core markets.”
He said the company has been very public with its intentions, including with its investment partners in various properties as well as its major tenants. From January 2015 through February 2016, the company completed or negotiated transactions totaling $900 million in gross proceeds.