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Prime Retail Outlet In Barceloneta For Sale
BY TAINA ROSA
May 30, 2002
Prime Retail Outlet in Barceloneta, the first outlet mall to open in Puerto Rico, is up for sale, with a price tag of about $40 million, announced Glenn Reschke, CEO and chairman of Prime Retail, which has more than 40 outlet malls throughout the U.S. and Puerto Rico.
According to Reschke, the mall is being sold not because it is under-performing, but as part of the companys strategy to strengthen its financial stability.
"Puerto Ricos mall is doing very well. It is 100% occupied and traffic is up in comparison to last year. The food court is always packed," said Steven Sless, the companys director of public relations.
Reschke added that sales at the local Prime Retail surpass $300 per square foot, well above U.S. mainland averages. "That mall is definitely in the upper tier of our outlet centers. The reason we are selling it is because we have to pay down a $90 million loan we took in December 2000 to avoid bankruptcy. We have already reduced that [the amount owed] to $37 million."
Both Reschke and Sless explained that the local mall is easier to sell than its other properties not only because of its excellent performance, but also because it has only a first mortgage. "We are selling those assets that make more sense to sell, and Puerto Rico is one of them," said Sless, adding that two other centers were sold this year.
Although Prime Retail is selling the mall in Barceloneta, it is proceeding with expansion plans and marketing strategies.
"We are preparing the mall for an expansion in which we hope to add 20 or 25 stores. We already own the land on which the new storesat an additional 78,000 square feetwill be located. We will make architectural designs available to the malls buyers, [who] will finalize the leasing and expansion process. There is a possibility that this may become a joint venture effort, with the buyer retaining ownership of the mall and [we] staying on as mall managers," said Sless, adding that many potential buyers, both from Puerto Rico and the U.S., have expressed interest in acquiring the mall.
The mall is also implementing a marketing strategy in conjunction with US Air. "We are giving away trips to the mainland U.S. and Madrid. The campaign, called Hot, Hot, Hot, will run until June 2, 2002," said Sless.
Prime Retail Outlet Mall in Barceloneta has more than 50 stores and occupies about 176,000 square feet. It opened in the summer of 1999.
This Caribbean Business article appears courtesy of Casiano Communications.