The ownership group, which bought the mall for $13 million last week, also is bringing in some new tenants in the next few weeks.
“We feel that the east mall will remain a vibrant retail shopping area and we are exploring all options for the west mall,” said Elliot Nassim, president of Mason Asset Management Inc., a partner in the ownership group.
“We are very excited to have bought this property and to be involved with the project. We already have several tenants that have expressed interest and we are negotiating with them,” he said late Thursday.
Regency Mall Realty LLC, which is the lead company that bought Regency, is a joint venture of Namdar Realty Group LLC and Mason Asset Management, both of Great Neck, N.Y.
The venture bought Regency Square from GGP Regency Square LLC.
“We feel this is a great asset,” said Nassim. “We’ve got great leasing momentum already.”
He said new tenants, which he declined to identify, would start moving into Regency Square in the next couple of weeks, “starting with some small and working its way up.”
Nassim said existing retail tenants in the west side of the mall would move to the east side. He also said owners are working to develop a new children’s play area in the east mall, which apparently would replace the play area in the west mall.
Namdar and Mason focus on buying and redeveloping aging shopping malls.
Regency Square was built in 1967 and doubled in size in 1981-82, adding even more space in the early 1990s.
When it opened 47 years ago, Arlington was a growing, bustling suburb but has been eclipsed by retail and residential growth throughout sprawling Duval County.
By year-end 2013, the mall was 37.9 percent occupied, down from 60.1 percent at the end of 2012.
Regency is at a high-profile site at 9501 Arlington Expressway, where Atlantic Boulevard connects from the Beaches and then splits toward San Marco.
The east side of the mall was the site of the original mall. The west mall was built in the expansion.
JC Penney anchors the east end of the mall, while Sears and a Dillard’s Clearance Center are on the west. Sears and Dillard’s own their stores and are not affected by the tenant repositioning, Nassim said.
Sears and Dillard’s both issued statements that they will continue to operate their stores.
Belk sits at the center of the mall and is the pass-through from the better occupied east side to the west side.
However, a new Belk is under construction several miles east of Regency, leading to questions about the department store’s future at the mall.
Belk has not commented. Asked about the status of Belk in light of plans for the new store, Nissam said only that Belk is a Regency tenant.
Nassim said the ownership group also would invest in a mall facelift and added security.
“We come in with new energy,” he said. He didn’t have an investment estimate for the upgrades, only that owners would do “whatever it takes.”
A statement from Mayor Alvin Brown’s office said the administration looks forward to working with the new owners.
“The infusion of private capital to buy one of the city’s premier redevelopment sites shows the potential in our real estate and commercial sectors,” the statement said.
The west mall has been the subject of discussion for years in Jacksonville. “I’m exploring all options,” Nassim said when asked what might be done with it.
Potential uses for Regency that have been discussed in the community include retail as well as possibly converting, or removing, space on the west part of the mall for development as medical, office, educational and other community services.
A “Rethinking Regency” community visioning effort in 2007 yielded many suggestions, including tearing down the mall and building a mixed-use development similar to that of the popular St. Johns Town Center, built in 2005 about 7 miles south of Regency.
Last June, a developer’s consultant met with city officials to talk about the potential of Regency Square that included use as an educational facility.
Namdar tweeted and issued a news release Tuesday that said “Namdar Realty acquires shopping mall in Jacksonville, FL – Regency Square mall situated on 110 acres with GLA of 1,419,661 SF.”
Deed documents were signed last week and the sale was recorded Thursday morning with the Duval County Clerk of Court.
Not counting Sears and Dillard’s, deed documents indicate the sale appears to cover about 1.1 million square feet of mall space, which Nassim confirmed.
The properties in the sale, including parking lots and other land, encompass about 94 acres. They carry a collective taxable value of about $30 million.
That works out to a little more than $11 per square foot.
Nassim declined to comment on the purchase price.
Regency tenants had been sent letters before the sale that a New York-based venture of Mason Asset Management Inc. and Namdar Realty Group LLC had a contract to buy Regency Square Mall.
The group also owns the 220,000-square-foot Jacksonville Regional Shopping Center at 3000 Dunn Ave.
Namdar Realty Group, a privately held commercial real estate investment and management firm, owns more than 5 million square feet of commercial real estate in the United States.
Among the group’s Florida history of buying aging malls, Mason Asset Management acquired DeSoto Square in Bradenton in late 2012. A year later, media reports said new tenants remained hard to come by but that the mall was focused on serving its community.
‘Do something positive’
Karl Johnston, senior director of capital markets and investment sales and acquisitions for the Cushman & Wakefield real estate services company, said Thursday he had looked at the mall on behalf of investor groups, but none was interested in pursuing a purchase.
“Regency Square is a mall that has gone through its life cycle,” said “Back in the late 1960s and ‘70s, it was one of the most successful, if not the most successful, mall in its time,” he said, referring to sales per-square-foot, a key measurement.
Johnston said that area of Arlington and its demographics have changed. “It’s a very challenged site,” Johnston said.
“We think the previous owner of the mall did everything it could do, but at the end of the day, it was a mall that was failing,” Johnston said.
Johnston referred to the acquisition group as “a value-add investor.”
“Maybe these guys can do something very positive for the community. We won’t know until they unveil their plans,” he said.
Regency Square Mall’s new owner intends to reposition the Arlington shopping center’s tenants to the east side of the mall and is considering redevelopment options for the largely vacant west side of the mall.