PCCP Provides $69M for Salt Lake City Mall Renovation
- Dec 05, 2011
December 5, 2011
By Nicholas Ziegler, News Editor
In a renovation deal that will be ready for next year’s holiday season, PCCP L.L.C. announced last week that it provided a $69.2 million senior loan to recap and improve Salt Lake City’s Valley Fair Mall. The retail center, an 877,153-square-foot regional mall in the city, is owned by a joint venture between Coventry Real Estate Advisors and Satterfield Helm. The mall is 93 percent occupied.
“The PCCP loan will refinance the current loan as well as provide funding for significant new construction including the Megaplex, approximately 50,000 square feet of new junior anchor space and significant renovation of the mall interior,” Jim Galovan, vice president with PCCP, said. “Overall, this opportunity fit well with PCCP’s debt strategy as the retail center is a well-performing asset in a strong location with both durable in-place cash flow and immediate value-add opportunities.”
Built in 1970, Valley Fair Mall consists of 150 tenants and is still anchored by original tenants JC Penney and Macy’s. A significant portion of the new loan will finance the construction of a new 15-screen Megaplex movie theater totaling 110,000 square feet that will replace a former Mervyns space, and is slated to open in the fourth quarter of 2012. Costco is the fourth anchor, with a free-standing 150,000 square foot building adjacent to the mall on a long-term ground lease.
A forecast by Marcus & Millichap real estate services pegs the Salt Lake City market as an increasingly healthy one. The firm’s fourth-quarter 2011 report sees the metro area as adding 13,900 jobs in 2011, compared to the only 1,500 added in 2010. “The increase in hiring,” the report notes, “translates to a 2.3 percent rise in private-sector employment so far this year and exceeds the national increase of 1.2 percent.”
Valley Fair Mall is located at the corner of 3500 South and Highway 215, and caters to the 350,000 residents of the West Valley submarket. A light rail stop, as part of a new intermodal station, opened on the mall’s grounds in August 201