TROY, MI-Urban Retail Properties LLC has purchased the 1.5-million-sf Oakland Mall, at the intersection of 14 Mile and John R roads. The company promises to complete a transformation of the mall, which was opened in 1968 and owned for many years by developer Jay Kogan, who died in September. “This will be an entirely new Oakland Mall,” says Ross Glickman, CEO of Urban.

He would not provide the purchase price, but says the mall was bought for “considerably more than $20 million.” He says the mall earns about $450 million in sales a year, about $300 per sf. There have not been many Detroit mall sales lately, but the 540,000-sf Genessee Valley Mall in Flint, considerably more north of the prime retail area in Troy, sold a year ago for $130 million.

The enclosed mall includes anchors such as J.C. Penney, Macy’s and Sears, and more than 120 other stores and outlot properties. The mall has a unique design, with a long center walkway ending in a four-way spoke section with a central courtyard area, and the anchors have multi-level stores. A former United Artists movie theater was converted a few years ago into a Steve & Barry’s. Glickman says the property is almost 90% occupied. “We’re probably going to put Oakland Square and Oakland Plaza up for sale,” says he says about two close-by strip centers.

Glickman tells that he purchased the mall for several reasons. “We feel the mall is expandable and cosmetically enhance-able,” he says. “The former owners were very passive, they were just managing the store, after the J.C. Penney’s expansion a few years ago they just really went nowhere with some expansion ideas. We think a lot can be done. Plus, the pricing was attractive, we came in to buy and hold, and accentuate the property.”

He tells that in the next 24 months, the company plans to expand the mall both at the front entrance on 14 Mile and at the back of the mall off of 15 Mile. Also, Glickman says he’s negotiating new tenants for the two out-lots off of John R, the CompUSA and Office Depot. CompUSA still occupies their store, but Office Depot is empty.

Oakland Mall is just one of a few mall buys and builds in the works, Glickman says. “We hope to close within two-to-four weeks on an existing facility in Kansas, and we have a development deal in the city of Chicago. We have another seven development and acquisitions deals in the works, ranging everywhere from Texas to the Northeast, each from 500,000 sf to one million sf,” he says. Glickman says his firm is also negotiating to build a lifestyle center in Grand Rapids called Orchard Park. “We’re very close on this,” he says. The company does not own any other properties in Michigan.

Urban Retail Properties split in 2005 from the three companies that owned the third-party retail property manager. The company was a privately held subsidiary of General Growth Properties, Simon Property Group and Westfield Group. The three mall owners acquired Urban in 2002 as part of their $5.3 billion acquisition of the Rodamco North America portfolio. Prior to that, Rodamco had owned Urban in 2000. Before those acquisitions, the over 30-year-old Urban Retail existed under many entities, and was a major US mall owner in the 1990s.

Glickman says he’s happy to be back buying and building malls again, with the help of a recent joint venture with the California State Teachers’ Retirement System, called UrbanCal LLC, for $500 million to handle the properties. Also, Philadelphia-based RAIT Financial Trust bought 25% of Urban in September. “We’re building up the platform again, and we’re back in the game. The RAIT deal gives us the ability to tap into that market, as well,” Glickman says.

He says that he’s not worried about many retailers’ projections of a slow fourth quarter. “Retail may experience a slowdown in consumer spending, but we’re very bullish. We like lifestyle centers, but you can’t go everywhere with them, they can only go in markets that need them. Also, regional malls are not going away, either,” Glickman says.

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