Post Falls Outlet Mall Sold Baltimore-Based Firm, Owner Of 21 Other Malls, ‘Very Bullish’ On Move Into Northwest
The nation’s second-largest manager of outlet malls has purchased the Post Falls Outlet Mall along with two other western centers for more than $37 million.
Prime Retail Inc. of Baltimore now owns the 50-store outlet complex near the state line off Interstate 90. Smaller outlet malls in Bend, Ore., and Sedona, Ariz., are also part of the deal.
“We’re very pleased with our purchase,” said Robert Mulreaney, chief financial officer for Prime Retail Friday. “We’re very bullish on the future of outlet malls.”
Benderson Development Co. of Buffalo, N.Y., and Quality Centers of Orlando developed the outlet complex in 1991 for about $14 million. A third development of outlets next to the original malls in Post Falls is owned by McCormack Properties of Hawaii, and is not part of this week’s purchase.
While the Benderson outlets had been full since they opened, the mall lost about a dozen tenants late last year. Mall management said the stores left because their parent companies shut down, not because the mall sales were disappointing.
Outlet managers said they have been concerned about the marketing of the mall and declining numbers of Canadian shoppers. A poor exchange rate has weakened Canadian shopping power here, the main reason that Canadians used to be a much larger part of tourism throughout the region.
Prime Retail said the outlet mall here is 85 percent full. The other two outlet malls in the deal are 100 percent full.
Calls to mall administration in Post Falls were not returned Friday.
Mulreaney said Prime Retail would keep the management team at the outlet malls. He said the company has no plans to expand the mall, which at 179,000 square feet of leasable space is somewhat smaller than the average outlet size of 300,000 square feet in Prime Retail’s ownership.
The malls in Idaho and Oregon represent the company’s first advance into the Northwest. The company owns 21 other malls, mostly in the East and South. “We plan to use our relationships with leading manufacturers that currently operate stores in outlet malls to enhance the shopper experience,” Mulreaney said.
Prime Retail had discussed the possible sale of the malls with Benderson for several months. “My understanding was that they didn’t own that many small outlet malls in their portfolio,” he said.
Mulreaney would not break down how the $37.3 million applied to each mall. The total square footage of the three malls - 358,000 square feet - breaks down to about $104 per square foot in the deal. The Post Falls outlets were built in 1991 for about $80 a square foot.
Retail observers such as Jack Taylor, a retail professor at Birmingham-Southern College in Birmingham, Ala., said that only very large outlet malls can achieve the kind of regional interest to keep sales rising. Plus, shoppers may have become wary of the outlet concept, he said.
On news of the acquisition, Prime Retail’s stock saw near-record volume Friday. More than 2 million of its shares changed hands. The stock finished down 13 cents to $12.63 a share.
, DataTimes ILLUSTRATION: Color Photo