Smart real estate investors are snapping up so-called dying malls and giving them a second chance. As undercapitalized owners lose the properties to banks, investors such as Hull Property, Cypress Equities and Time Equities Inc., are stepping in and buying properties for pennies on the dollar.
Malls in secondary markets are seen as the best candidates for makeovers, because of limited competition, observers say. Many of these properties just need some capital investments and renovations to reverse vacancy trends. Sometimes, de-malling is the answer. In other instances, new paint and signage might be all that's required to turn things around.
“We think there are somewhere between 100 and 200 malls out there that fit the general criteria” for a rehab, Chris Maguire, chief executive officer at Cypress Equities, told Bloomberg. The Dallas-based investor bought a 40-year-old regional mall in Flagstaff, Ariz., earlier this year. “They need capital, but there’s cash flowing, so you just sit and wait.”