Quail Springs Mall owner struggling with debt

[metro]

Quail Springs Mall owner struggling with debt
Journal Record
October 22nd, 2008

Commercial Property News reported today that the frozen credit markets are causing difficulties for Chicago-based REIT General Growth Properties, which is one of Oklahoma’s largest enclosed mall owners. The REIT is trying to deal with $27 billion of debt by soliciting the sale of up to $2 billion in preferred shares to investors. The company is expected to see approximately $2.5 billion of debt that will mature over the next two months, according to the article. You can read the entire article by clicking here.

The most interesting bit of information in the article as it relates to Oklahoma is that General Growth may consider selling some of its more than 200 malls, which includes Quail Springs Mall in Oklahoma City, Sooner Mall in Norman and Washington Park Mall in Bartlesville. The article stated the REIT would either place properties for sale on the open market or sell to joint ventures. While this does put into question the fate of General Growth’s Oklahoma holdings, the good news is that all three of these properties are doing quite well with high occupancies thanks to the strength of the Oklahoma economy. It will be interesting to see if General Growth feels these Oklahoma malls are worth keeping due to their strong performance. However, they might also feel these properties’ high occupancies coupled with the stable local economy might make them more attractive to investors rather than properties that are located in struggling markets with high vacancies.

[hipsterdoofus]

Maybe they could just get the government to bail them out...

[circuitboard]

I hope they sale the Mall. Then maybe a new investor will get some good stores to open.

[progressiveboy]

I hope they sale the Mall. Then maybe a new investor will get some good stores to open.

I think with QS Mall it has "one" of the more dynamic demographics and everyone knows "location, location, location" is a key term used in Real Estate. I personally do not see QS closing or downsizing simply because this part of the city is growing and adding much more affluence and population. Everyone knows where rooftops pop up then retail follows right along with it. I do think that QS needs to offer more appealing stores as the tenant mix is ok but nothing that rises above PSquare. I believe that Simon would be a good buyer for the mall because GGP has done just an average job on it's marketing mix of stores. Some stores that come to mind that would be a welcome edition would be Restoration Hardware, Banana Republic, Steve Madden, Kenneth Cole, Z Gallerie, Crate & Barrell etc..........

[metro]

I think with QS Mall it has "one" of the more dynamic demographics and everyone knows "location, location, location" is a key term used in Real Estate. I personally do not see QS closing or downsizing simply because this part of the city is growing and adding much more affluence and population. Everyone knows where rooftops pop up then retail follows right along with it. I do think that QS needs to offer more appealing stores as the tenant mix is ok but nothing that rises above PSquare. I believe that Simon would be a good buyer for the mall because GGP has done just an average job on it's marketing mix of stores. Some stores that come to mind that would be a welcome edition would be Restoration Hardware, Banana Republic, Steve Madden, Kenneth Cole, Z Gallerie, Crate & Barrell etc..........

I agree on those stores, however Penn has had Banana Republic for years.

[metro]

Yeah, sell it to Simon Malls. They did a bang up job with Penn, or actually sell it to one of the Mills companies, that would be a perfect fit for Quail and this city needs one.

[Tex]

Yeah, sell it to Simon Malls. They did a bang up job with Penn, or actually sell it to one of the Mills companies, that would be a perfect fit for Quail and this city needs one.

That's exactly what I was thinking, selling it to Simon.

[jbrown84]

I don't think Simon wants two malls in this size market.

GGP is doing fine with Quail, IMO. Just don't sell it to Macerich.

I'm thinking they won't sell it though. Surely out of those 200 malls they have a lot that are in worse shape. They owned Shawnee Mall until 4 or 5 years ago, and it has a lot of vacany and did then as well.

[jbrown84]

Simon used to own Sooner Mall too I believe.

Also, they own the Mills malls.

[hipsterdoofus]

Yeah I was just in quail recently and it seemed pretty full...

[Architect2010]

I still don't see why people say Quail Springs is gonna go soon.That mall doesn't need any upgrades of any sorts, if anything they need touching up on th exterior. Its a great mall and a popular one at that. It has stores that are great that even Penn Square doesn't, i.e. Forever 21 and The Disney Store. It has its share of "cheap-o" stores but Penn Square is not without those either. And to say it needs a remodel is crazy, the inside has finishes almost identical to Penn.

Quail Springs would be the one to go if it was out of it and Penn, but the scenario of it leaving soon is far off. Sorry for the rant, I'm just addressing peeves from another thread.

I hope Simon picks it up! They would turn that mall into a whole other world. It has the potential and the location, size, and status to be the best mall in the state. I'll keep dreamin' though.

[jsibelius]

Yeah I was just in quail recently and it seemed pretty full...

Lots of people doesn't necessarily equal doing well financially. If you're not managing your books properly, you can be rolling in customers and still be drowning in red ink.

[hipsterdoofus]

Lots of people doesn't necessarily equal doing well financially. If you're not managing your books properly, you can be rolling in customers and still be drowning in red ink.

I didn't mean full of customers (although that was ok too) but full as far as not a lot of empty retail spaces.

[jsibelius]

I didn't mean full of customers (although that was ok too) but full as far as not a lot of empty retail spaces.

Thanks for clarifying. Even so, my point still stands. If you're not managing your income properly, you can be rolling in money and still be drowning in red ink.

[jbrown84]

I would rather see Simon expand Penn Square to allow for some of the kinds of stores you mention. They are more likely to go into Penn as it is already much more upscale, and Penn has a long waiting list of retailers dying to get into the next open space that fits their needs.

[progressiveboy]

I would rather see Simon expand Penn Square to allow for some of the kinds of stores you mention. They are more likely to go into Penn as it is already much more upscale, and Penn has a long waiting list of retailers dying to get into the next open space that fits their needs.

The only problem that I have been told is Penn Square is not able to expand because the structure of the entire building would not hold a third level. The only way I see it expanding is if that build northward where currently there is parking spots, however, I do not think the mall wants to give up parking due to PS being a very successful mall and parking is already an issue. I hope your correct in that long waiting list. Recent casualties at PS include Sharper Image and Crabtree and Evelyn. With the economy starting to unravel, it "may perhaps" be a while before anything goes into PS that would be considered upscale, but I may be wrong. In Dallas where I reside, Northpark Mall and the Galleria keep adding very upscale stores, Armani, Versace, Barneys etc..

[metro]

The only problem that I have been told is Penn Square is not able to expand because the structure of the entire building would not hold a third level. The only way I see it expanding is if that build northward where currently there is parking spots, however, I do not think the mall wants to give up parking due to PS being a very successful mall and parking is already an issue. I hope your correct in that long waiting list. Recent casualties at PS include Sharper Image and Crabtree and Evelyn. With the economy starting to unravel, it "may perhaps" be a while before anything goes into PS that would be considered upscale, but I may be wrong. In Dallas where I reside, Northpark Mall and the Galleria keep adding very upscale stores, Armani, Versace, Barneys etc..

That's because wealth distribution in this country is becoming more and more prevalent and is killing the middle class. The rich are getting richer and the poor are getting poorer. Especially with a weak economy and rapid inflation. The upper middle class are becoming richer (therefore can afford the Armani, Versace, etc.), while the avg. joe middleclass is more cautious with his money and might not be shopping at Sharper Image or Crabtree and Evelyn anymore.

[jbrown84]

The only problem that I have been told is Penn Square is not able to expand because the structure of the entire building would not hold a third level.

I didn't say anything about a third level. The mall could easily be expanded on the north or south side and the parking loss could easily be made up with garages.

[progressiveboy]

I didn't say anything about a third level. The mall could easily be expanded on the north or south side and the parking loss could easily be made up with garages.

That's fairly unlikely to happen due to the space and parking issues. I wonder if the parking structure can be added on to? I realize you did not say anything about a third level, so lighten up and have a great day!! OK??

[jbrown84]

That's fairly unlikely to happen due to the space and parking issues. I wonder if the parking structure can be added on to?

There's huge amounts of surface parking there. Plenty of room for more garages and an expanded mall. It would actually make the parking more convenient because everyone would be on average closer to the mall from their parking spot.

[lil0kie]

Penn Square is land locked. I've worked in the mall for over 15 yrs. Simon amazed everyone by letting 2 restaurants come in to already tight parking lot. Lot of employees thought they would build a 2nd parking garage before adding any new buildings. They recently took out a multi million dollar center court fountain from an earlier remodel. I think malls will become a thing of the past. Most of them are asking way too much for spaces. I agree with others, I doubt Simon will buy or want Quail Springs mall. I've been told that there only about 3 or 4 companies that own all the USA malls. Sad. Wish a local investment group would buy some of the local malls.

[jbrown84]

Indoor malls will not go away completely, at least not in cold climates.

For any kind of extended shopping experience (going to 2+ stores), I would much rather park and go inside an indoor mall with a much more aesthetically pleasing set up than go to any strip mall with a desolate parking lot out front and no one using the sidewalks.

[sgray]

I am right by Penn Square and just when I think I've seen people around here sell everyone on their last load of crazy, they drop another restaurant right into the middle of an already crowded parking lot! I could understand if that was just open grass land with 'develop' written all over it, or if the lot never filled up.

I know I keep telling myself I've seen it all, but around here I'm still waiting for the big one--when business owners start closing up shop when business gets good--makes perfect sense, you know? Follows the same crazy logic.

Dee Dee Dee!

[dismayed]

Agree with Hipster and Architect. This mall is in the heart of OKC's modern retail district and it seems to be in fairly good architectural shape. If the mall owner were to go belly up, I think buying this property at a discount nearly fully leased and generating a ton of revenue is a no-brainer.

[dismayed]

Sharper Image filed Chapter 11 earlier this year. Their pullout had nothing to do with Oklahoma City or the economy... it had to do with their horrible management and inability to sell 100% marked-up products in a post-Internet world.

Crabtree and Evelyn is a private company so it is hard to say what is going on with them. But looking at their product line-up online it seems to me like their product is really not that upscale. You can find similar stuff at Target.