Macerich, the mega-sized shopping center real estate company, has just dropped a whopping $751 million dollars in purchasing the Mill Basin based Kings Plaza Mall (5100 Kings Plaza), according a report in the Wall Street Journal.
Compared to some of the more ultra modern and glitzy shopping centers that are currently in vogue across the nation, Kings Plaza falls short, however the prime location and high foot traffic made it an appealing investment.
Because of the difficulty in developing new real estate in a dense city like New York, the threat of competition from new malls is practically nil.
“They’re both in urban or semiurban environments where it would be very difficult to replicate them,” Dan Fasulo, managing director of real estate research company Real Capital Analytics, told the Wall Street Journal. “That creates tremendous scarcity value.”
Kings Plaza also generates $650 per square foot in sales annually, compared to the $370 industry average, a result of New York’s dense population. Even still, Macerich still plans to replace stores with lower revenue streams with higher-end outfits, however no details were given.
In addition to the $751 million spent on Kings Plaza, the Macerich Company also spent $500 million on the Green Acres Mall in Valley Stream, bringing Macerich’s investment total in the area to a staggering $1.25 billion dollars. Both units were owned by Vornado Realty Trust, who intends to leave the mall business altogether.