Place.
The Rouse Co. of Maryland agreed to purchase Providence Place mall on Feb.
3 for $522 million, adding another high-end retail development to what the company
CEO calls “the highest quality retail portfolio in America.”
The Providence Place Group Limited Partnership put the mall up for bid in late December when its attempt to refinance attracted mall operators like Rouse, according to mall spokesperson Michael Doyle.
“It was never the developers’ intent to sell the mall, but when they were attempting to refinance, it got some attention and they received offers that were really good. It began to play out at the end of last year,” Doyle said.
Rouse, headquartered in Columbia, Md., owns and operates large suburban and urban shopping centers across the country – including Boston’s Faneuil Hall Marketplace.
“Providence Place mall is exactly the type of property we like. We try to own, through acquisitions or developments, the best regional malls in cities and suburbs, with the best stores,” said David Tripp, Rouse’s director of investor relations. “Most of us here are from New England, so we’re excited about owning a mall in Providence.”
The real estate development and management company started in 1939 and became a public company in 1956. The company develops planned communities and operates more than 150 retail, office, research and development and industrial properties in 22 states. Providence Place will be the company’s first Rhode Island property.
“The Rouse Company has a long history of operating large-scale urban projects,” Anthony W. Deering, chairman and CEO of the company, said in a statement. “We are excited by the prospect of owning and managing a high-quality property like Providence Place, and are particularly enthusiastic about the opportunity to participate in the future growth of such a vibrant community.”
The purchase of the 1.3 million-square-foot Providence Place mall depends on whether the Rouse Company finds the mall to be in the condition the sellers promised, both financially and structurally. Depending on the company’s satisfaction, the deal should be completed early next month, Tripp said.
Tripp said the company is pleased with the retailers currently leasing in the mall, though they will look for areas that need improvement.
“I don’t see any tearing down or massive firing. We didn’t go into it with that idea. What’s not broke you don’t fix,” Tripp said. “It’s impossible for a major development like this not to have some vacancies or leases coming to an end. Lord and Taylor closed a lot of their stores, so we’ll be looking into that. We’ll do an analysis to look for any merchants who may be missing out on an opportunity in this market.”
Doyle refused to disclose the cost of developing Providence Place, but according to published reports, the mall was a $460 million development project.
Providence Place Group Developer J. Daniel Lugosch III also held part ownership of the Silver City Galleria Mall in Taunton and the Emerald Square Mall in North Attleboro. By giving up Providence Place, Lugosch no longer has ownership in any malls, according to Doyle.
Greater Providence Chamber of Commerce President James Hagan said the mall couldn’t be in better hands with the Rouse Company, which he said has a “solid reputation” for improving retail centers.
“The company is well-known and highly regarded, so it’s a great company to have take over. They’ve done great things with Faneuil Hall and Baltimore’s waterfront (Harborplace). If they use that same enthusiasm with Providence Place as they did with those other projects, we’ll be in great shape,” Hagan said.
Hagan said it is fairly common for a smaller company like the Providence Place Group to start a project and later sell it to a bigger company.
Charles T. Francis, president and partner of CB Richard Ellis Whittier Partners, echoed Hagan’s commendations, saying: “This is a terrific thing for Providence, that Rouse – a very, very reputable company – has sought fit to invest in our city. They have been to our city before and looked it over and found it wanting. And now, I think, they believe we’ve arrived. It’s refreshing to see people from the outside come in and make an investment in our state or our city, and it’s exactly the kind of economic good news that reflects well on our city and state.”
Providence Place opened in 1999. It includes 420,000 square feet of mall stores including five restaurants and is 98 percent occupied. It also has 115,000 square feet of larger, street-facing shops, Filene’s, Nordstrom department store, Lord & Taylor, a 16-screen cinema plus an IMAX theater and a 4,500-car parking garage.
Laura Ricketson contributed to this report.
