The University Mall in South Burlington has new owners. In a deal inked on March 4, Taconic Capital Advisors and Eastern Real Estate partnered to purchase the 52-acre property on Dorset Street for $60 million.
The new owners are exploring plans to "reenergize" the 617,000-square foot mall, according to a press release the two companies sent Monday. The release said the mall is 95 percent occupied, with more than 50 local and national businesses as tenants.
"The property has been a gathering place for decades and our commitment is to build on its success as a vital retail and economic asset for Vermont," Taconic Capital Advisors director Alex Fleming said.
Eastern Real Estate director Andrew Hayes will oversee the planning, leasing strategy, and overall positioning of the mall, according to the press release, while KeyPoint Partners, the company that currently manages and leases the mall, will stay on as property manager.
Eastern Real Estate, a privately held commercial real estate company with offices in Boston and Santa Barbara, Calif., has a broad portfolio that includes office, residential and industrial properties, hotels, and retail and mixed-use projects.
In June of last year, the company acquired Los Angeles-based Eagle Rock Plaza — a mall that has Macy's and Target as its anchor tenants — and is currently redeveloping it. Eastern also owns retail properties in Massachusetts; West Palm Beach, Fla.; and Las Vegas.
Last year, the company also broke ground on a project to turn the site of a former mall in Worcester, Mass., into an Amazon distribution center.
The fate of the University Mall, which opened in 1979, has been in limbo for years. In July 2016, Finard Properties lost ownership of the mall after defaulting on a $92 million loan. Florida-based LNR Property became the mall's court-appointed special receiver, meaning it took on the responsibility of the property until a new owner came along.
In the years since, the mall has undergone some notable changes. In the fall of 2017, the City of South Burlington set up a temporary public library in a large vacant retail space while a new library was being built on nearby Market Street. Anchor tenant Bon-Ton left in 2018, and Sears closed in 2020.
But the mall has also attracted a few high-profile retailers. In October 2018, Target and H&M moved in. The month before, LNR Property held an auction in an attempt to sell the mall but rejected the highest bid of $44.5 million.
The value of the mall — like many around the country — has been in free-fall for more than a decade. In February 2007, the mall was assessed at $116.3 million. In South Burlington's latest assessment last year, it was valued at just under $33.8 million.
In 2020, Coresight Research found that 25 percent of the country's roughly 1,000 malls would close within three to five years. Malls were already losing favor before COVID-19 reared its head, but the pandemic accelerated their decline, the study found.
In an email Monday, South Burlington City Manager Jessie Baker said she believes that the city can build a strong partnership with Eastern Real Estate.
"I appreciate their corporate culture of asking 'what are your goals, and how can we help you achieve them,'" Baker wrote, "and I look forward to our work together to further the vision of South Burlington."