Feldman Mall REIT Buys Colonie Center for $82M

ALBANY-Less than a month after spending more than $93 million for a mall in Illinois, Feldman Mall Properties Inc. has acquired the Colonie Center mall here in an all-cash deal valued at $82.2 million. The 1.2-million-sf complex was purchased from BRE/Colonie LLC, a joint venture of the Blackstone Real Estate Group and Polaris Capital.

Feldman Mall Properties, a Great Neck-based REIT that specializes in the renovation and repositioning of retail shopping malls, now owns four regional shopping centers totaling more than four million sf. Last month, Feldman acquired the Stratford Square Mall in Bloomingdale, IL in another all-cash transaction. That deal closed for $93.1 million.

The Colonie Center mall is one of the better-known shopping centers in the New York Capital region. The two-level complex has an overall occupancy of 82.6%. Its anchor tenants are Macy's, Sears, Boscov's and Christmas Tree Shops. The facility also has FYE and Steve & Barry's as what Feldman officials term "junior anchors."

The REIT says it will undertake a major capital improvement program at the property. It intends to make major renovations to upgrade both the interior and exterior of the mall and improve signage. Other plans include adding a multi-screen Cineplex and new restaurants as upscale junior anchor tenants. Total capital expenditures, which include contingent payments to the seller of the property, are expected to cost about $18 million.

"Our strategic renovations, combined with the mall's superior location, will help fuel improved shopper traffic and soon after, tenant sales and rental rates," says Larry Feldman, chairman and chief executive officer of Feldman Mall Properties. Officials say the financing for the acquisition will be funded with proceeds from the company's recent initial public offering and financing activities. The company expects an initial yield on its investment of approximately 8%, based upon the anticipated operating income of the property for 2005.