A blue light special? Chapel Hills Mall in Colorado Springs sells for deep discount
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East Coast buyers have completed their purchase of the Chapel Hills Mall in Colorado Springs - paying a seemingly bargain-basement price of $33.5 million (Photo: Google Maps)

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East Coast buyers have completed their purchase of the Chapel Hills Mall in Colorado Springs - paying a seemingly bargain-basement price of $33.5 million or less than half of what the property sold for seven years ago, El Paso County records show.

"It sounds like a heck of a discount," said Mark Useman, executive managing director with brokerage Colorado Springs Commercial.

Limited liability companies formed by Namdar Realty Group, Mason Asset Management Corp. and CH Capital Group, all of Great Neck, N.Y., bought Chapel Hills on Wednesday, records show.

The purchase of the mall, northeast of Academy and Briargate boulevards, includes interior store spaces, common areas and a 13-screen movie theater complex. The deal doesn't include buildings that house anchors Sears, Macy's, Dillard's and Burlington Coat Factory, records show.

The mall was put up for sale last year after previous owner Garrison Investment of New York fell behind on loan payments and was sued and foreclosed upon by lender Capital One, National Association, a bank owned by the credit card giant.

Garrison had owned Chapel Hills since 2011, when the company and a then-partner bought it for $71.5 million from its bankrupt developer.

Chapel Hills' acquisition gives the Namdar-Mason-CH Capital group control of Colorado Springs' two enclosed regional shopping malls. The group also paid $20 million in 2015 to buy The Citadel, northwest of Academy and Platte Avenue.

Elliot Nassim, president of Mason Asset Management, said Friday his group "is very excited," about Chapel Hills.

"Obviously we love Colorado Springs," he said. "We want to own both malls. There's a lot of synergies and a lot of exciting things that we have planned. We already have some positive leasing momentum for the Chapel Hills Mall."

He described his group as "probably the most active mall buyer in the country, which is why our reputation sometimes gets us a better price on deals."

The group closed the transaction "in less than 30 days" and its ability to complete transactions in a quick manner played a large part in getting the Chapel Hills deal done, Nassim said.

Nobody knows for sure why the mall's price nosedived, said Useman. But the loss and potential loss of anchors and smaller stores probably contributed to the declining value of Chapel Hills, which opened in 1982, he said.

J.C. Penney, Gordmans, Old Navy and Borders, Books & Music are among retailers who've left Chapel Hills in recent years because of relocations and store closings. And while it remains an anchor, financially troubled Sears has closed stores nationwide.

"Any anchors you lose causes other tenants not to want to come or not to renew a lease," Useman said. "There could be issues with that. Something significant has had to happen besides just the fact that it went into foreclosure."

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Twitter: @richladen

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Business writer, Colorado Springs Gazette

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