Northlake Mall, once valued at over $248 million, is set to be sold for $39 million, a significant loss of more than $200 million from its original purchase price a decade ago, according to a filing in the North Carolina Business Court.
Since 2021, the mall has been under the control of Spinoso Real Estate Group, which has acted as its receiver. On January 7, Spinoso entered into a purchase agreement for the 1.06 million-square-foot property located at 6801 Northlake Mall Drive in north Charlotte.
The highest bid for the mall came from Hull 2000 and Hull 2018, two Georgia-based partnerships tied to Hull Property Group of Augusta, along with Racine Mall LLC, another Georgia firm, court documents reveal. Hull Property Group is a prominent retail real estate company with holdings in 16 states, including several malls in North Carolina.
The sale is contingent on court approval, which is expected to occur within ten days, provided there are no objections by the January 22 deadline. The court filings state that the terms of the sale reflect the current state of the commercial real estate market and are in the best interests of the receivership estate.
The agreed-upon purchase price is $39 million, with an initial deposit of $5 million. There is no due diligence period, and Spinoso has expressed confidence that no higher offers will come forward. The court filing emphasizes that finalizing the sale quickly will maximize the property’s value.
JLL was hired to broker the sale in September. After marketing the property to over 11,000 potential buyers, the process included three rounds of sealed bids and buyer interviews.
Northlake Mall was initially acquired by Starwood Capital Group in 2014 for $248 million, a year in which the property was appraised at $253 million. However, the mall’s valuation has since declined. According to Mecklenburg County’s most recent appraisal in 2024, the property is now valued at $133.6 million.
The broader trend in mall valuations, as noted by CoStar research in September, reflects a steady decline since before the pandemic. The average price per square foot for U.S. malls in the second quarter of 2024 dropped to $83, a 21% decrease from 2022’s peak.
The sale of Northlake Mall is an “as-is” transaction, covering everything from the physical condition of the property to its financial performance. The buyer will assume ownership of the mall’s structures, improvements, permits, easements, and leases, including anchor tenants like Macy’s, Belk, Dillard’s, and AMC Theatres. Any items owned by Starwood, such as construction materials and equipment, will also be included in the sale.
This transaction marks the end of a long period of uncertainty for the mall, which has been in financial turmoil since 2017, when Starwood defaulted on a $646.6 million loan. The loan, which included a portfolio of four malls, was part of a larger trend of retail struggles. JLL also marketed another Starwood-owned property, MacArthur Center in Norfolk, Virginia, which was sold to the city of Norfolk for $18 million in 2023.
Northlake Mall entered receivership in 2021 under Spinoso Real Estate Group, which has worked to improve the property’s operations, including leasing efforts and rent collections, ahead of this sale.
Source: Charlotte Business Journal