Fort Lauderdale’s decades-old Galleria Mall, once the city’s epicenter of urban dining and retailing, is in search of a buyer after years of trying to reshape its persona into a 21st century destination.
CBRE, the nationally prominent commercial real estate services firm, has drawn the task of finding a new owner.
“An extraordinary opportunity,” the firm said in a statement, “with incredible large-scale, luxury mixed-use redevelopment potential. An offering of this scale has not been available in Greater downtown Fort Lauderdale in decades.”
“Potential’ has been a longtime keyword for characterizing the future of the property, which occupies multiple blocks along the southern edge of East Sunrise Boulevard between the Middle River and the Intracoastal Waterway. For a number of years, a perennial question has been what kind of redevelopment project will it take for an owner and neighboring residents to see eye-to-eye?
While they decide, development has sprung up elsewhere around the city:
- A stretch of Federal Highway between Sunrise and Oakland Park boulevards is now heavily populated with retail outlets.
- Las Olas Boulevard has become a major draw filled with national outlets long-sought by developers.
- The boom in Flagler Village apartment construction is accompanied by street-level retail spaces.
- The now-demolished Searstown that predated the Galleria as a retail core is destined to be the home of nearly 71,000 square feet of retail, restaurants covering another 10,000 square feet and a hotel to accompany a high rise residential complex.
Today, the Galleria is 67% occupied, according to CBRE.
One of its busiest tenants appears to be an Apple retail store that routinely draws large crowds at holiday shopping time and on weekends.
On Black Friday, Apple appeared to be the mall’s biggest draw. Other retailers bearing national names include H&M, Lenscrafters, Mayors, Sephora, Sunglass Hut, Victoria’s Secret and Zales. Notable restaurants include The Capitol Grille, PF Chang’s and Seasons 52.
But even more prominent names such as Saks and Lord & Taylor long ago disappeared from the scene.
It’s the mall space itself that’s up for sale. The Dillard’s toward the eastern end is owned by the department store chain. The Macy’s that has anchored the mall on the west end since opening in the early 1980s holds a ground lease, according to CBRE.
“The Property’s diverse, highly successful existing tenant base provides a strong foundation for leasing post-redevelopment,” CBRE said in its statement. ”The Galleria has been strategically de-leased with expiring tenants renewing short term. Most leases were designed to accommodate a partial or full redevelopment.”
The property is owned by Keystone-Florida Properties, an affiliate of a pension fund for Pennsylvania teachers called PSERS, or Public School Employees Retirement System. The fund bought the Galleria in 1993 for $126 million.
These days, the property is expected to sell for “above $100 million,” said Casey Rosen, a CBRE vice president, in response to questions submitted to the firm Monday by the South Florida Sun Sentinel.
Asked why the pension fund has chosen to sell now, he said, “After approximately 30 years of ownership, the seller has elected to exit this investment and deploy the proceeds elsewhere.”
In the company statement, Rosen asserted that the property “is positioned for long-term success with residential and commercial demand due to its high-traffic location, protected water views, and proximity to beaches and downtown.”
“We expect the property to attract a global audience of prospective investors and developers resulting in a new mixed-use development that will further elevate Fort Lauderdale’s stature among the nation’s most desirable communities to live, work, and play,” he added.
Short-circuited plans
But for the owner, the task of reaching that plateau has been an arduous one.
In 2015, a sweeping overhaul was proposed, anchored by a 45-story condo tower. After absorbing strong objections from neighbors, the plan was dropped.
Last year, another idea emerged in the form of a mixed-use layout that would have seen much of the mall demolished in favor of new shops and restaurants, housing, offices and paths for bicycle riding and walking. A boutique hotel also was part of the plan, along with a village green.
Keystone also wanted to reserve 1,730 “flex” housing units, which constituted nearly all of the reserve of housing the city allowed at the time in areas zoned for commercial use.
But the density of the new development and a proposal for 2 a.m. closing times for establishments serving alcohol helped contribute to another round of neighborhood objections.
Now, the mall has returned to Square One.
“There are no existing development approvals or pending applications at this time,” Rosen said.