For the last year, Independence Center was bank-owned, but now the indoor mall has a new owner with expertise in managing and redeveloping retail properties nationwide.
Los Angeles-based real estate company IGP Business Group purchased the center from a Wells Fargo loan portfolio for $57 million, Commercial RealEstate Direct reports. Tom Lesnak, president of the Independence Chamber of Commerce and Economic Development Council, confirmed the sale. “From a community standpoint, we’re thrilled that it’s now in permanent hands of an owner,” Lesnak said, adding that IGP is a strong group with mall experience and appears financially sound.
There’s also better opportunity for reinvestment now that Independence Center is no longer bank-owned, he said. Former owner’s struggles Independence Center’s previous owner Simon Property Group defaulted on its $200 million loan, which went into special servicing in May 2017. The loan was backed by 398,000 square feet of the more than 1 million-square-foot mall and excluded anchor tenants Sears, Macy’s and Dillard’s. “Everyone was a little bit alarmed and surprised when Simon walked away from that property,” Lesnak said. Part of Simon’s struggle was the size of the loan compared with the net operating income the property generated as well as economic challenges that dampened tenants’ ability to boost sales. It also faced increasing competition in the geographic area. In 2007, the collateral was appraised at $250 million, but by May 2018, it plummeted to $104.5 million. When Pacific Retail Capital Partners took over management of the mall last February, Lesnak said the transition was smooth and even led to some new tenants. “We’ve been real happy with the last year, that the mall has stayed vibrant,” he said. “We didn’t see a huge downturn of lost retailers or vacancy rates climbing.” That’s key, since the mall is an anchor along 39th Street and in the Interstate 70/Missouri Highway 291 corridor, he said.
Pacific Retail is no longer managing the property, but Raelene Trumm will continue to lead Independence Center as its general manager. According to her LinkedIn profile, she took over the mall in April. IGP sees challenges, opportunities IGP has some ideas for making Independence Center more competitive and Lesnak thinks the mall will continue to be an anchor for the city. On its website, IGP said that technology advances, along with other trends and a swelling millennial influence, have created challenges for shopping center owners, but that it also creates opportunities.
“In this new era, the creation of entertainment experiences and play are essential in enhancing a shopping mall’s competitive edge,” the website states. A prime example is the 954,000-square-foot Oviedo Mall in Florida, where IGP introduced two of its original concepts: Arcadia Kid’s Fun Museum, which offers a hands-on learning experience, and Eat District Play, which features four escape rooms, an arcade, boutique bowling and a restaurant. IGP’s portfolio also includes properties such as Moreno Valley Mall, an indoor mall in California built in 1992 that spans 1.09 million square feet, and Central Mall in Salina, which spans 476,816 square feet.
Kansas City Business Journal