Washington Crown Center sold for $20 million
August 16, 2016
Washington Crown Center, which was on the block since early 2015, was sold to a New York-based mall operator for $20 million.
The finalization of the sale, pending since mid-July, was announced Tuesday by Pennsylvania Real Estate Investment Trust, which sold the 676,000-square-foot North Franklin Township retail center to Kohan Retail Investment Group, based in Great Neck, N.Y.
According to KRIG’s website, it specializes in purchasing and turning around distressed shopping malls around the country, but principal Mike Kohan stressed in a telephone interview Tuesday that Washington Crown Center does not fit into that category.
“This is not a distressed mall,” Kohan said, adding in the past 18 months, his company purchased higher-quality properties like Crown Center that present additional opportunities.
“I think that’s a great mall,” he said of Crown Center, adding with PREIT’s addition two years ago of 85,000 square feet of new retail tenants that included Ulta, Ross Dress For Less, Marshall’s and JoAnn Fabrics, the mall increased its foot traffic.
The property is anchored by Bon-Ton, Macy’s, Gander Mountain and Sears. In its sale announcement, PREIT said as of June 30, the mall, which also includes the Regal Crown Center Stadium 14 theater, was generating sales per square foot of $313, and its non-anchor occupancy was 87.4 percent.
Kohan said Tuesday he plans to pursue additional tenants to further increase the retail mix, including more clothing and entertainment options. He said one of the first projects will be to create a “fun zone” in the mall to attract more youth.
He said the mall also has some office space to market to nonretail tenants.
Kohan said Crown Center’s location and the area’s population base, with its proximity to Pittsburgh, as well as the county’s designation as an energy center for oil and gas development, were all factors in his decision to buy the property.
The KRIG website lists 18 malls it owns around the country. The nearest property to Washington County is the Lycoming Mall in Pennsdale, which KRIG purchased from PREIT in March for $26.35 million.
While acknowledging online shopping is one of the biggest challenges to malls in general, Kohan said KRIG’s strategy of owning malls in smaller markets enables it to operate them as community centers where “people want to go out on the weekends and meet friends. They don’t want to sit at home on a Saturday night doing online shopping.”
Philadelphia-based PREIT owned Washington Crown Center since 2003, when it completed a merger with Crown American Realty Trust, which owned 26 malls.
PREIT announced in January 2015 it planned to sell Washington Crown Center as well as several other area malls as part of a disposition plan to allow it to grow its portfolio in larger markets.
The company sold Uniontown Mall in August 2015 and said Tuesday it also is marketing Beaver County Mall in Monaca.