Lindale Mall sold to New York firm

Lindale Mall has been sold for $28.5 million in a transaction completed March 23, according to Cedar Rapids Assessor’s Office records. The sale transfers Lindale’s ownership from Washington Prime Group, based in Columbus, Ohio, to Kohan Retail Investment Group (KRIG), based in Great Neck, New York. The 723,666-square-foot Lindale Mall, at 4444 First Ave. NE, opened in September 1960 as Cedar Rapids’ first large-scale mall. It currently houses approximately 70 storefronts and service agencies in its enclosed structure, along with several peripheral businesses. The sale includes the main mall structure and nine other parcels as listed below, with their listed assessed valuations:

• The former Hy-Vee store at 279 Collins Road NE, $2,244,400
• Jared The Galleria of Jewelry at 159 Collins Road NE, $1,390,700
• Parking lot outside former Hy-Vee, $1,382,500
• Jo-Ann Fabrics store at 255 Collins Road NE, $1,322,300
• Five Guys Burgers and Fries, 157 Collins Road NE, $877,600
• Fantastic Escape, 4444 First Ave. NE, $855,400
• Vacant wooded parcel, 0 First Ave. NE, $1,100
• Vacant land and private road/yard lights (perimeter road), 0 First Ave. NE, $0
• Vacant land and private road/lights only (perimeter road), 0 First Ave. NE, $0

The properties included in the sale have a total assessed value of $36,760,900, including a value of $28,686,900 for the main mall structure, according to Assessor’s Office records. Other properties that are part of the mall’s footprint are not included in the sale, including the former Sears store, a McDonald’s restaurant, a Firestone auto service garage and a building housing Rapid Foods, a cloud kitchen space that indicates on its website “all our restaurants are currently closed.” Lindale Mall general manager Becky Eckley said the mall’s sale is a positive step for the future. “Lindale Mall has served an important and intentional placemaking role in the community for more than 60 years, and we look forward to continuing to provide the retail environment, experiences and events for our families to enjoy,” Ms. Eckley said. Kohan Retail Investment Group, founded in 2005, has just over 60 shopping malls in its retail portfolio, along with two New York hotels, including The Gallivant, a boutique hotel at Times Square in New York City. “Lindale Mall is an attractive investment, and while future plans are still being evaluated, the existing tenancy and customer loyalty makes this an outstanding addition to our growing portfolio,” said Mike Kohan, founder and CEO of the Kohan Retail Investment Group. Several Cedar Rapids leaders expressed optimism about the mall’s sale.

Cedar Rapids City Council member Scott Olson, who also works as a Realtor for Skogman Realty, said the transaction is indicative of ongoing changes in Cedar Rapids retail dynamics, including the development of new retail hubs like The Fountains on the city’s far northeast side. “Hopefully, this new owner will dedicate some more time to continue to recruit and to get aggressive to fill up the spaces (in the mall),” Mr. Olson said. “The secret to keeping the rest of the tenants … they need to have traffic. People don't come to the malls like they used to, so hopefully we'll be able to attract other types of activities that will bring people to the site, which then helps the retailers.” Mr. Olson also said he was told that KRIG has retained all the mall’s current employees. Ron Corbett, vice president of economic development for the Cedar Rapids Metro Economic Alliance (CRMEA), compared Lindale’s potential future path with that of Westdale Town Center, which has been undergoing a dramatic transformation from a fully-enclosed mall to freestanding retail and commercial developments over the past several years. “The community watched as Westdale Mall fell in property value and continued losing many stores,” Mr. Corbett said. “The city was very supportive of the developer, Frew (Development Group), who stepped in and re-envisioned the property. Today the property value is up, and retail sales tax has rebounded. Lindale now is on a similar path. Several anchor stores like Sears and Younkers have left, along with Hy-Vee on adjacent property. Real estate is always valuable, and sometimes the purpose needs to change, as we’ve seen with office buildings being converted to housing. New owners can breathe new life into a property. “There is always a little nostalgia when a property changes its use, especially a mall that had millions of shoppers over the years,” he continued. “The sale is just a new and hopefully exciting chapter for Lindale Mall.” CRMEA executive director Doug Neumann said he’s already met with Lindale representatives since the mall’s sale. “There’s a lot of optimism that this new ownership group will further develop the property and improve the mall,” he said. “Through all its changes in the last 60 years, the mall remains a critical piece of the retail landscape here, and it’s good to see the potential for new energy and investment.”

KRIG has purchased several malls in recent years, and has been described as a company specializing in purchasing endangered or troubled retail properties. Washington Prime Group, the mall’s former owner, made news in early March 2021, when a Securities and Exchange Commission filing indicated the company had withheld a $23.2 million interest payment due Feb. 15, 2021. However, the company, which owns more than 80 other mall properties nationwide, said in a release that it had secured $100 million in new financing that will allow “all business operations [to] continue in the ordinary course without interruption.” Washington Prime filed for Chapter 11 bankruptcy in June 2021, but Lindale Mall operations had continued uninterrupted since then. Lindale Mall opened in September 1960 as an open-air mall, then known as Lindale Plaza. The mall was enclosed in 1980, and a major expansion project in 1997 added a parking ramp and food court to the original mall structure. A partnership led by the Simon Property Group purchased the mall in 1998, and spun off several of its retail assets, including Lindale, as the Washington Prime Group in 2014. Lindale lost two longtime anchor stores in 2018, when both Sears and Younkers closed their Lindale locations. Von Maur is now the mall’s sole anchor store.

The former Sears store, encompassing 146,278 square feet on 11.9 acres, is owned by Seritage Growth Properties of New York, New York, which was spun out from the Sears chain in 2015 to “unlock the underlying value of a high-quality retail real estate portfolio” acquired from Sears Holdings. Its holdings included Sears and Kmart stores as well as other real estate assets. An October 2022 article in The Real Deal indicated that Seritage was gearing up for a major liquidation sale and planned to sell off all of its properties, a move approved by a majority of the company’s shareholders. However, Seritage’s website still lists the former Sears Lindale building among its property holdings. The former Sears store had previously been marketed for sale in 2019 by Cushman & Wakefield through Iowa Commercial Advisors. A proposed site plan for the space showed it being divided into parcels for as many as nine separate tenants. U-Haul had expressed interest in purchasing the store and repurposing it for storage units and equipment rentals, similar to the repurposing of the former Younkers store at Westdale Town Center, according to The Gazette. That plan hasn’t yet materialized. The former Younkers store at Lindale remains vacant, though it’s been used in recent years for temporary auto sales by Cassill Motors and as a seasonal Halloween retailer.