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Orlando Fashion Square sold to Tennessee real estate company for $35 million

Orlando Fashion Square, a floundering shopping mall near downtown Orlando, has been sold to a Tennessee business.

Pennsylvania Real Estate Investment Trust announced last week that it had sold the mall to UP Development of Franklin, Tennessee for $35 million. UP owns several other properties around Orlando, including Millenia Plaza and Shoppes at Alafaya Trail.

At the end of last year, Orlando Fashion Square had an occupancy rate of about 80 percent. It has struggled in recent years, losing many of its big, anchor tenants and experiencing high turnover among small, independent retailers that have seemed to be less popular with consumers. Its sales were $233 per square foot, which is lower than other properties in REIT’s portfolio.

As we have written about before on this blog, shopping malls across the country are facing challenging times.

Shopping malls were envisioned as destinations. When they were popular, from roughly the 1950s to the early 1990s, customers would make a trip to the mall an event. They’d drift through stores, linger at the food court and generally plan to spend at least an hour or so on site. That translated to nice sales figures for both shopping mall owners and their retailer tenants.

In the past decade or so, though, consumers have seemed to prefer open-air “lifestyle centers” because they don’t want to spend so much time shopping anymore, and this layout is easier and more convenient for in-and-out shopping. On top of that, online shopping has grown explosively, further siphoning away would-be customers.

At this point, we are not aware of any dramatic changes UP Development has in store for Orlando Fashion Square, but we are curious to see if it takes a different tack going forward.

Do you still enjoy shopping malls, or do you think they are a format whose moment has come and gone?

Sources:

• The Orlando Sentinel, “Orlando Fashion Square sold for $35 million,” Sandra Pedicini, Feb. 12, 2013
• The St. Paul Pioneer Press, “The future of the shopping mall: It’s turning inside out,” Feb. 16, 2013

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Fri Aug 24, 4:57pm