Investors buy Arkansas Mall for $39.5M

Three New York-based investment groups have bought the Northwest Arkansas Mall for $39.5 million.

The Fayetteville mall last sold for $150 million to a trio of area investors in 2006. The property reverted back to a bank in 2011 to avoid imminent foreclosure. The original loan was $125.6 million.

CWCapital, a division of Citigroup, sold the mall last month to limited liability companies formed by Namdar Realty Group, Mason Asset Management and CH Capital Group, all based out of Great Neck, N.Y. CWCapital cut the mall's appraisal nearly in half last year to $57 million.

Calls to the New York investment groups Monday were referred to Elliot Nassim, president of Mason Asset Management. He did not return a message by 4 p.m. Monday.

Michael Goodwin, CWCapital spokesman, said the company does not comment on property sales.

Sean Barrie, a research analyst with Trepp LLC, said the appraisal change indicates problems with the mall that are strong enough to reduce the property's value. He said CWCapital most likely felt the property's value would not increase at any point, so it might as well get what it could from the sale.

Chung Tan, director of economic development for the Fayetteville Chamber of Commerce, said the Northwest Arkansas Mall is in a good location for both Fayetteville and the region.

"Outsiders are looking at our market," she said. "Fayetteville is running out of room, and we are getting a lot of calls."

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said the sales price makes it appear to be a good deal for the buyers, but they also face risks.

"Malls such as the Northwest Arkansas Mall have struggled across the country. It's an indoor mall, and there is no getting around what it is," she said. Many customers are opting to shop online or visit alternatives such as open-air malls, she said.

The Northwest Arkansas Mall opened in 1972 and has 820,000 square feet, anchored by Dillard's, Sears and JC Penney.

The recent sales price was less than what the mall sold for in 1989 when Tristate Joint Venture purchased it for $41.33 million. The Macerich Co. purchased the mall for $94 million in 1998 and sold it in 2006 to Midwest Mall Properties, an investor partnership among John Flake, Doyle Rogers and Sam Mathias.

Midwest Mall Properties bought three malls for about $400 million in December 2006: the Northwest Arkansas Mall in Fayetteville; the Citadel Mall in Colorado Springs, Colo.; and Crossroads Mall in Oklahoma City. The owners lost Crossroads Mall to foreclosure in April 2009.

The Fayetteville and Colorado Springs malls were both under bank ownership before being purchased by the New York group.

Business on 01/12/2016

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