El Con Center 844,553 sf | Tucson, Arizona

Photo credit: CBRE

Evaluation

Tenancy in the mall had been reduced to three inline tenants and JCPenney.  Anchors Dillard’s and Macy’s had vacated the mall.

JCPenney was in the market looking for a new store and had a 90-day cancel clause in their lease.

Retailers The Home Depot, Target and a theater were on the site and doing well.
Estimated value at this time was $16 million and the existing loan was $22 million.

Strategy

Ideally there are 400,000 people to support a mall.  At the time we took over the mall, there were six malls serving just over 1 million people.  Clearly there was no need for another mall, so El Con needed to become something other than a mall.

With strong sales at Target, The Home Depot and JCPenney, and the presence of a theater on the site, the center was clearly in a good retail location.  The mall location is three miles from the University of Arizona, and only a few miles from downtown on the main retail street in Tucson.

We decided to de-mall El Con.

Result

Sold for $81 million against a loan balance of $30 million