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.

[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.

[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..........

[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..

[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.

[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]

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.

[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.

[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??

[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.

[hipsterdoofus]

I'm glad that Penn Square is doing ok, but I'll never go there if I can avoid it...the parking in that place is terrible and the same getting to it, in my opinion...I had an incident near Christmas time once where I had to leave the lot before I went road rage...

[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.

[Patrick]

Simon is planning on adding 2 levels to the existing parking structure in the next 3-5 years.

I'm good friends with Bob Landdeck, the mall manager, and he tells me that the mall has a long waiting list of tenants. It's all a matter of finding the right space for the tenant. Many tenants have certain preferences and space requirements. For example, Forever 21 is on the waiting list, but Penn currently doesn't have a large enough space to accomodate their needs.

In regards to Sharper Image closing, that had to do with their bankruptcy. Had nothing to do with Penn Square. Crabtree and Evelyn also is not doing well financially.

Penn has the highest sales per square foot of any mall in the region.

[progressiveboy]

Simon is planning on adding 2 levels to the existing parking structure in the next 3-5 years.

I'm good friends with Bob Landdeck, the mall manager, and he tells me that the mall has a long waiting list of tenants. It's all a matter of finding the right space for the tenant. Many tenants have certain preferences and space requirements. For example, Forever 21 is on the waiting list, but Penn currently doesn't have a large enough space to accomodate their needs.

In regards to Sharper Image closing, that had to do with their bankruptcy. Had nothing to do with Penn Square. Crabtree and Evelyn also is not doing well financially.

Penn has the highest sales per square foot of any mall in the region.

Thanks for the information. Did your friend mention what other tenants are on the waiting list?