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Concord's Steeplegate Mall will belong to new owner

New Hampshire Union Leader

June 11. 2016 11:13PM
The Steeplegate Mall in Concord has been sold. (DAVID LANE/UNION LEADER)

CONCORD - A quarter century after an Olympic hockey hero helped celebrate Steeplegate Mall's opening, the mall's new owner is looking to strike gold.

Namdar Realty Group of Great Neck, N.Y., has purchased the financially troubled mall and its 51 acres in Concord for $10.3 million in a sealed-bid auction.

"I know they have a good reputation in the marketplace," said Tim Sink, president of the Greater Concord Chamber of Commerce. "They have a track record for buying properties in decline and turning them around."

The mall sold for less than half the city's current assessment of more than $25 million, which was already less than a third of the mall's peak value.

"This is what I was hoping to see happen for the mall: someone purchase it at a price level that would give them some ability to market to attractive retail stores at a price that would be very competitive," Sink said.

The mall opened in 1990 to much fanfare with Mike Eruzione, who captained the U.S. hockey team past the heavily favored Russians and eventually led it to Olympic gold in the 1980 Winter Olympics, serving as master of ceremonies for the mall's kickoff.

But over time, national retailers peeled away from the mall, putting the mall's finances in distress. In March 2015, mall owner Rouse Properties turned the property over to its mortgage lender, which was owed nearly $46 million.

"What I can say with confidence is the mall's decline was in no way reflective of the commercial property that is around the mall," said Carlos Baia, Concord deputy city manager, who noted a strip mall opened up nearby this year. "The (Steeplegate) mall was an anomaly. It was definitely an outlier."

Repeated calls to Steeplegate's new owner and mall management weren't returned last week seeking information on the current occupancy rate as well as future plans.

Namdar's website said the company owns more than 15 million square feet of commercial real estate in the United States, including retail strip centers and medical office buildings.

Stacey Clark, who started working at the Steeplegate Mall in 2010 at Things Remembered (now closed) and now is at Jewelers Workbench at the mall, said much has changed there.

"Six years ago, the place was packed and full of stores and everyone was busy," Clark said Thursday. Today, "it's pretty slow right now."

"I'm hoping these new owners will make it better," she said. "We need to make it better."

Other Granite State malls have received makeovers through the years.

"Bedford Mall and the Nashua Mall were both struggling malls," said Donald Eaton, managing director of asset management for Colliers International New Hampshire. "They were redeveloped and are now successful."

Not every mall is a gold mine.

"The enclosed mall industry is struggling nationwide, so there are a number of malls, such as Steeplegate, across the country, that are having trouble competing against the new mode of retail, which is a lot of online shopping not to mention some overbuilding," Eaton said, noting that Colliers was managing Steeplegate for its bondholders.

"You are seeing malls doing all sort of things with their area that you might not have seen in the past," Eaton said. "At Steeplegate, we put in some unconventional uses like a bounce house and a performing arts theater."

The state's biggest mall player is Simon Property Group, which owns four malls and one premium outlet center here, including the Mall of New Hampshire in Manchester.

"I think if you look, they (Simon) are doing some unconventional uses and more nontraditional uses," Eaton said.

At the mall in Manchester, Opry Glowgolf, which offers glow-in-the-dark miniature golf, has filled space left by a departed crafts store.

"Miniature golf is a natural fit for mall operators who want to fill up vacant storefronts and add an experiential element to their offerings without a major renovation," said the company's website.

A Simon spokeswoman would not answer questions about Steeplegate or its own malls.

According to Simon's website, its U.S. malls and premiums outlets were 95.6 percent occupied as of March 31, a slight downtick from the 95.8 percent rate a year earlier. Information wasn't broken down for each location.

Steeplegate, including its large anchor stores, total about 482,000 square feet, Eaton said. By comparison, the Mall of New Hampshire, excluding its anchor stores, measures 383,492 square feet and was assessed at $145 million, according to city records. A Simon spokeswoman confirmed that those figures didn't include the separately owned anchor stores, such as Macy's and Sears.

Bob Sheehan, vice president of research of KeyPoint Partners in Burlington, Mass., tracks commercial properties in southern New Hampshire.

"Enclosed malls aren't getting built any longer," Sheehan said, partly due to fewer people shopping at department stores.

"I think in southern New Hampshire, the Pheasant Lane Mall and Mall at Rockingham Park are in very good shape," he said. "They're successful malls and do have some longterm viability.

"The Mall of New Hampshire, it's not quite as strong as the other two, and the other two play off the Massachusetts traffic," Sheehan said.

New Hampshire's lack of a sales tax acts as a magnet for the Nashua and Salem malls to attract shoppers looking to escape the 6.25 percent sales tax in Massachusetts.

Getting Glowgolf at the Mall of New Hampshire is "not an ideal replacement tenant, but that's as good as they're able to do" and might produce less rental income, he said.

"What Simon is able to do is leverage one mall location off another, so many times when they cut deals with retailers," Sheehan said, "they're cutting multiple location deals. If you want Pheasant Lane and Salem, we need you at the Mall of New Hampshire, too."

More available retail space will come on the market soon with news that Sports Authority is closing all its stores, including four in southern New Hampshire

Sheehan said brick-and-mortar stores are contending with people who prefer shopping online.

"You have to be in both venues," Sheehan said. He said stores often are putting more money into online operations and focusing less on actual buildings.

"They're able to manage with less space since they had that online presence," he said. "And, of course, Amazon isn't helping things."

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