Outdoor Mall In Miami Trades For About 60% Of Its Former Price
A month and a half after redevelopment plans for the site formally fell through, The Shops at Sunset Place, a 9.68-acre outdoor mall in South Miami that once bustled with national retailers but has struggled in recent years, sold on New Year's Eve for $65.5M, the buyer announced this weekend. That's about 59.5% of the price the mall traded for in 2015.
The parcel, located at 5701 SW 72nd St., is situated along U.S. 1, a major road. It was originally developed as a site for Holsum Bakery and in the 1980s was transformed into the Bakery Centre Shopping Plaza. That was demolished in 1996 to make way for The Shops at Sunset Place, which opened in 1999 with an FAO Schwarz and a Virgin Megastore, both long closed.
The mall struggled with vacancies in recent years, and Simon Property Group sold the property for $110M in 2015 to the publicly traded, Maryland-based REIT Federal Realty Investment Trust, along with local partners Grass River Property and the Comras Co. An annual report disclosed the mall was only 62% leased in 2019, though it still had major tenants including an AMC Theatres and an LA Fitness.
The owners planned to tear down half of the shopping complex, about 80K SF of vacant retail space, and replace it with three 17-story towers that would include apartments and hotel rooms. However, the partners defaulted on a $61M loan during the coronavirus pandemic.
In November, Federal Realty Investment Trust CEO Don Wood said the partners would be abandoning the redevelopment plans. On New Year's Eve, FRIT Shops at Sunset Place Fee Owner LLC sold the property to Midtown Opportunities, a Miami-based firm that developed portions of Midtown Miami, including co-developing the recently opened 32-story GIO Midtown tower, and it is developing 22 acres in Orlando.
“When the opportunity came to purchase Sunset Place, a landmark property located in South Miami, we jumped on it. For us, this is about more than just real estate," Alex Vadia, principal of Midtown Development, Midtown Opportunities’ development arm, said in a statement. "Although Midtown Opportunities has closed significant transactions in various key sectors, South Miami is our home turf. We look forward to re-imagining the possibilities of Sunset Place alongside our community partners.”
Grass River will continue to manage the property.