St. John Properties Acquires 1 MSF Pennsylvania Shopping Mall
- Jun 18, 2012
St. John Properties Inc. is no novice at buffing lackluster properties to a shine, and the company plans to do just that with the Harrisburg Mall in Harrisburg, Pa. In a partnership with Petrie Ross Ventures, St. John recently acquired the 1 million-square-foot distressed regional retail center from TD Bank, and will transform the depressed property into a top destination in the greater Harrisburg area.
The 44-year-old Harrisburg Mall is just 70 percent occupied by 70 retailers, but St. John is not intimidated by the empty spaces on the tenant roster. “The mall has suffered as a consequence of the recession and it was a victim of circumstances, but the demographics of our particular market area are very good,” Gerard J. Wit, senior vice president of marketing with St. John, told Commercial Property Executive.
And indeed, there has been suffering. The handlers overseeing the mall when it went into foreclosure were unsuccessful at keeping the property afloat, and it suffered a blow when the Boscov’s store vacated its 188,000-square-foot anchor space as the chain went into bankruptcy in 2008. “The Boscov’s closing triggered some retailers leaving at the beginning of the recession, and our goal will be simply to get some national retailers back,” added Wit. “The mall was successful at one time, prior to the recession. The bones of this mall are good.”
The mall underwent a $60 million makeover roughly five years ago. The new work will start with transformation of a partially completed space originally planned for a Barnes & Noble and a sports bar at the front of the shopping center, soon to become a plaza.
Harrisburg Mall is not the only St. John property being revitalized and repositioned. The real estate owner and developer is nearing completion of an $8 million renovation of the former 100,000-square-foot Environmental Elements Corp. headquarters in Baltimore. St. John acquired the five-story office building from a Florida-based bank in March.
And there will be more such projects, as St. John is on the hunt for additional opportunities in the distressed commercial real estate market. “There have not been any significant buying opportunities because the banks have not been disposing of properties,” Wit said. “The extend-and-pretend game has been going on with the banks, but I think time is up and the banks are letting them go at attractive prices.” While the company is focusing on the Mid-Atlantic, it also has a presence in secondary markets in such locales as Colorado, Louisiana and Wisconsin. “If there is a project of some size that would cause us to go to a new market–a half-million-square-foot opportunity, a million-square-foot regional mall, that kind of thing–we would jump outside of the Mid-Atlantic area,” he noted.
But it’s not all about troubled assets for St. John. “Our main business, day in and day out, is from the ground up new construction,” Wit said. “We probably are building a half-a-million square feet of new product–office and flex and retail–in 2012.”