Uniontown, Washington Crown Center malls for sale
Two malls in Western Pennsylvania were put up for sale by their Philadelphia-based owner as part of its strategy to sell lower-performing properties and improve returns.
Pennsylvania Real Estate Investment Trust said Monday that Uniontown Mall in Fayette County and Washington Crown Center mall in Washington County are among five shopping properties it will try to sell this year.
“I'm a little surprised,” said Jeff Kotula, president of the Washington County Chamber of Commerce, who lives nearby. “Over the past year, the Washington Crown Center has done a lot of upgrades, adding a Marshall's, Ross and Ulta. From what I've seen, they've been investing in that mall. The improvements make it very attractive, in my opinion.”
The company said it sold eight properties in other areas in 2014 for a total of $191.7 million. It has sold interests in 16 properties for more than $424 million since its portfolio review began in 2012.
Total average sales per square foot for all its properties for the year ending Sept. 30 was $384. Six of the malls sold in 2014 had average sales of less than $250 per square foot. A spokesman could not be reached for comment about Uniontown and Washington malls, which have high occupancy rates, security filings show.
Generally, enclosed shopping malls are struggling, retail analysts say. Local examples are Century III Mall in West Mifflin, which has had three owners since 2011. Anchor tenants are closing stores, like Sears at Century III and Pittsburgh Mills in Fraser.
Retail analyst Howard Davidowitz predicted that mall closings could hit 50 percent in 20 years because the traditional model no longer attracts shoppers as it did at its peak in the 1990s. Malls face competition from online sellers and consumers who prefer town centers or downtown shopping areas closer to home.
Pennsylvania Real Estate Investment Trust is a publicly owned trust or REIT, that invests in and manages properties and pays dividends to investors, benefitting from special tax rules, with revenue from rents.
“We continue to be extremely effective in executing on our ongoing disposition program as demonstrated by the number of dispositions we completed in 2014,” said CEO Joseph F. Coradino. PEI is confident in the steps it is taking to transform its portfolio of properties, he said. Proceeds will be used to upgrade properties.
Analyst Ki Bin Kim with Suntrust Robinson Humphrey Inc. in New York has a “buy” rating on the company, whose shares have risen nearly 46.2 percent since May, closing at $23.90 on Monday. Third-quarter same-store net operating income, which excludes properties sold, rose 5.9 percent compared with the previous year.
PEI also owns the Beaver Valley Mall in Center and the Logan Valley Mall in Altoona among its 32 enclosed malls in 12 mostly eastern states.
Beaver Valley Mall is the largest of its malls in this region — about twice the size of Uniontown Mall and Washington Crown Center. Washington Crown Center, which is 91.7 percent leased, is anchored by Macy's, Sears and Bon-Ton. Uniontown Mall has Sears, J.C. Penney and Bon-Ton as anchors and is 97.4 percent leased.
South Union Township Supervisor Bob Schiffbauer said PEI representatives called three weeks ago about improvements at Uniontown mall. “From what I understand, they are planning an upgrade with the Carmike theater and property on Route 40 where the restaurants are,” he said.
Schiffbauer said he would expect any new owner to spend more on the property, which is what PEI did when it purchased the mall about a dozen years ago. “They put a good bit of money into refurbishing,” he said.
John D. Oravecz is a staff writer for Trib Total Media.