The Janesville Mall is slated to be sold for $18 million, according to a financial report released by its owner, CBL & Associates Properties.
RockStep identifies itself as a mall operator and manager. An official with RockStep on Monday said the company plans to “redevelop” the mall and fill the 55,000 square feet of lingering vacancy in the mall’s former JCPenney anchor space and address the 98,000 square feet of space that could become vacant later this year when Bon-Ton shutters its nameplate stores, including the Boston Store at the Janesville Mall.
According to the CBL report, RockStep posted a “significant” and “nonrefundable” deposit, and sale of the mall likely will close this summer, subject to a period of due diligence and closing conditions.
The $18 million sale price is a deep discount compared to the $33.2 million CBL paid for the mall in 1998, according to city of Janesville property assessment records.
CBL said in its quarterly report that it recorded an “impairment charge” early this year that wrote off $18.1 million on the mall, which CBL said had depreciated in value since CBL originally bought it.
The Janesville Mall has been for sale since fall 2017, according to commercial real estate listings.
The mall has struggled in recent years with large-scale tenant losses and retail vacancies.
In April, mall anchor Boston Store announced it was slated to close later this year. It’s one of multiple Bon-Ton nameplate stores closing under a bankruptcy buyout of Bon-Ton by a group of liquidators.
In 2014, JCPenney, a 125,000-square-foot anchor store, pulled out of the mall. The mall bounced back in 2015 with leases to Dick’s Sporting Goods and Ulta Beauty, two stores that helped absorb about half of the vacant real estate in the former JCPenney footprint.
Beth Isaacson-Hoeft, acquisitions director for RockStep Capital, said RockStep was interested in buying the mall in part because some tenants at the mall show to be high performing but also because owner CBL had good fortune recently getting vacancies at the mall filled.
“It’s normal to see two or three years for that kind of anchor space to fill in. It’s a great testament for your community as to how strong it is,” Isaacson-Hoeft said.
Isaacson-Hoeft said RockStep foresees “almost the immediate back filling of the (vacant) JC Penney space,” although she said she couldn’t share specifics of what tenants the company could work with.
RockStep was aware of the pending closure of Boston Store and other Bon-Ton locations as it worked to buy the Janesville Mall, Isaacson-Hoeft said. She said the Boston Store’s closure is part of the “risk” RockStep would undertake in acquiring the mall.
RockStep has some concepts of what it might do for a “redevelopment” that would address the upcoming vacancy at the Boston Store space, Isaacson-Hoeft said, but she said she couldn’t immediately discuss the company’s plans.
RockStep specializes in ownership and management of small-market shopping malls, Isaacson-Hoeft said. In recent years, RockStep bought a mall in Hutchinson, Kansas, a city of about 45,000 people. That mall had lost two of its large anchor tenants, including a Sears, she said.
“Within a very short window” RockStep filled most of the vacant anchor space at the Hutchinson mall with midsize to large retail tenants, including a TJ Maxx, Harbor Freight, Ulta Beauty, Dunham’s Sports and Dollar Tree, Isaacson-Hoeft said.
CBL did not initially announce the mall being put up for sale, but late last year RockStep officials circulated a flier inviting local residents to an investment junket in Janesville. At the time, RockStep identified itself as an interested buyer.
The mall property had been actively listed on the website of California broker Faris Lee Investments.
Officials for CBL and a broker who was working on the mall’s sale told The Gazette last week they couldn’t comment on the pending sale.