POUGHKEEPSIE, NY-The new owner of the South Hills Mall--Vornado Realty Trust--is expected to redevelop the 700,000-sf mall that is currently home to Kmart, Burlington Coat Factory and Price Chopper. The mall, which was built in 1977, was sold by a New York City-based private partnership.

Cohen & Co. Real Estate Inc. of New York City brokered the transaction. Although no sale price was reported, Helen Putterman, president of Cohen, says Vornado acquired the property well below replacement cost and may "de-mall" South Hills. "The land value alone is greater than the purchase price paid for the mall."

Putterman notes that the "market is heavily retail tenanted; there are still a number of medium and big box users looking to be here." Ric Kaiser, senior executive director of Cohen, adds that Super Wal-Mart wants to be in South Hills, as well as several other major retail tenants." Kaiser represented the seller, while Putterman represented Vornado.

The main tenants include Kmart, which leases 84,150 sf; Burlington Coat Factory, which has an 80,725-sf store; and Price Chopper, which occupies 76,880 sf at the 70-acre property. Currently there is approximately 100,000 sf of vacant space. Apart from five leases, all other tenants at the complex can be removed within the next year either through lease maturity or relocation clauses, Cohen officials note. In addition, the property has the capability for about 200,000 sf of additional development, Putterman says.

Vornado's retail portfolio consists of 84 properties in seven states and Puerto Rico totaling 14 million sf. In New York State, the company owns 15 retail properties primarily in the New York metro area including the Green Acres Mall in Valley Stream and the Kings Plaza Shopping Center in Brooklyn. On Oct. 31, the company reached an agreement to purchase the 1.2-million-sf Broadway Mall in Hicksville for approximately $153 million.