DeSoto Square Mall promised a renewal
Justine Griffin/Sarasota Herald-Tribune
The future of Manatee County’s only enclosed shopping mall may be brighter, now that a company that specializes in turning around ailing centers has bought the retail hub.
But Mason Asset Management, the new owner of DeSoto Square Mall, could have a tough slog to turn around both the property and the perceptions surrounding it.
Here is what is going on at the mall that hosts Macy’s, JC Penney, Sears, Bath & Body Works, Desoto Dollar Movies, Victoria’s Secret, Foot Locker, PacSun, Journey’s and Aeropostale, among others:
Opened in 1973, the 678,377-square-foot mall has long been considered a tired and deflated retail center — even by many who shop there regularly. In addition to a history of theft and other crime, the mall has struggled to retain some quality tenants, prompting shoppers to turn elsewhere in the region.
Mason, a company based in Great Neck, N.Y., bought the mall for a big discount at $24.6 million. The seller was Simon Property Group, the nation’s largest mall operator, which let its $62 million loan on the mall fall into foreclosure earlier this year, records show.
Mason has a track record of turning struggling centers into prosperous ones, though DeSoto Square will be its first foray into Florida.
“They got the property at a great price and have some room now to entice new retailers with lower rents because of that,” said Barry Seidel, the president of American Property Group of Sarasota Inc., a commercial real estate brokerage firm that specializes in retail properties.
“DeSoto is the type of neighborhood Mason already seems to play in, and the condition doesn’t seem to scare them.”
A revamp, but few details
Already, Mason has signalled that DeSoto will be revamped — with quality-oriented tenants that will appeal to Bradenton’s more working-class demographic.
Elliot Nassim, Mason’s president, said his company will retain existing mall management and honor leases signed by the former owner. Remaining vacancies could start to be filled as early as the end of this year.
“The mall is almost full already,” Nassim said. “We’re just upgrading what’s already there and will work hard to make it a success.”
Even if it focuses on value, a refurbished DeSoto Square — anchored by Macy’s, J.C. Penny and Sears stores — still will face heightened competition from University Town Center, a $315 million project scheduled to open just 12 miles away in late 2014.
The 1 million-square-foot center being developed at Interstate 75 and University Parkway by a joint venture between Taubman Centers Inc. and Benderson Development Co. is expected to draw more shoppers from older properties like DeSoto.
Where DeSoto could differentiate itself is in its tenant mix. University Town Center will be anchored by Saks Fifth Avenue, Macy’s and Dillard’s department stores.
Some analysts believe DeSoto Square will have to change drastically in order to stay competitive — or alive — at a time when older enclosed malls nationwide are closing or radically rebranding themselves as lifestyle centers, office headquarters and even mega-churches.
“With the Sarasota-Bradenton market becoming that much more competitive with the new Taubman project, DeSoto Square may have no other option but to become more of a hybrid mall and big box center,” said Jeff Green, a retail analyst with Phoenix-based Jeff Green Partners.
“That said, there is a significant retail potential for a value center in the area.”
At least one idea that seems to have gained traction involves converting DeSoto Square into a more discount-oriented retail center.
“The Bradenton area has its own demographic around that mall,” Seidel said. “There are people there that won’t be lured by the bigger malls and would rather go to a discount center closer to their home.”
Hybrid centers have become more popular in recent years as many malls grappled with downturn-inspired vacancies and few expanding retail ventures.
In this region, at Westfield’s Sarasota Square Mall, Costo Warehouse Corp. replaced a shuttered Dillard’s department store that had closed during the Great Recession. The August debut of the wholesale food, electronics and home goods store inside an enclosed mall was well received, and has since breathed new life into what was eroding into a second-tier mall.
The big risks
But there could be a risk in moving toward value-oriented merchants. Namely, DeSoto Square’s premier tenant could decide to abandon the center.
Macy’s, which has department stores in both DeSoto Square and Westfield’s Southgate Mall, has no plans to shut any existing Southwest Florida stores, said spokeswoman Melissa Goff.
It has been a DeSoto Square tenant, under various names, since the it opened almost 40 years ago.