The new owners of Chapel Hills Mall have begun minor renovations to spruce up the largest shopping mall in the Colorado Springs area and are adding several retailers to fill some of the center’s vacant space as the first step in revitalizing the 29-year-old property.
A partnership including Texas-based Coyote Management and New York-based Garrison Investment Group paid $71.5 million June 1 for Chapel Hills, or $40.7 million less than former owner General Growth Properties owed on it as of March 31, according to El Paso County land records. The price was not disclosed when the sale was announced.
The 1.2 million-square-foot mall is anchored by Dillard’s, J.C. Penney, Macy’s and Sears, and has a vacancy rate of about 15 percent. That does not include the vacant Kmart store on the center’s east end, which is under separate ownership.
“We have a lot of projects in the works — we have put up temporary walls in front of the vacant storefronts, we will be sprucing up the mall entrances and improving both the interior and exterior landscaping,” said Chapel Hills General Manager David Moss. “The new owners are moving fast for owning the property just four weeks. I am excited and the retailers in the mall are excited. We are working on bigger plans and I believe the next year and a half will make a world of difference for this mall.”
Luxie, a women’s clothing shop, opened in Chapel Hills on Friday. COJ Trading, a luggage shop, is scheduled to open July 15, and a Jimmy Johns sub sandwich shop is under construction in a building that previously housed an Arby’s outlet and will open in late August, Moss said. The new owners said last month they have discussed buying the former Kmart store building from the New Jersey partnership that now owns it, and are studying upgrades to the entire east end of the mall adjacent to the former Kmart building.
Mark Useman, a broker with Sierra Commercial Real Estate in Colorado Springs, said the new owners bought the mall at a price “where they can afford to put some money into it and make some nice changes. They can either retrofit the vacant space or make some deals to get new anchors. It sounds like they are into the property for the right number, based on the loan amount and other mall sales in this market, though it is difficult to know how good a deal it is without knowing how much income the tenants are generating.”
Although some malls are struggling with high vacancy rates, Useman said Chapel Hills “is still a good piece of property in a great location. Most of the retail in the city is still done between Woodmen Road and Interstate 25 along Academy Boulevard. There is a lot of synergy there among the retailers. The market is changing, but a lot of people still want to go to malls.”
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