The owner of the North Hanover Mall has entered a sales agreement to sell the York County property.
Pennsylvania Real Estate Investment Trust also entered an agreement to sell the Nittany Mall near State College and completed the sale of the South Mall in Allentown. The moves are part of PREIT’s plan to divest non-core malls and build a higher-quality portfolio, according to a news release.
The terms of the deals were not disclosed.
Starting in 2012, PREIT has been adding properties to its portfolio slowly while selling four non-core malls. The malls generated average sales of $227 per square foot, equating to about $79 million, according to the release. The company’s disposition program has generated more than $250 million.
After closing costs, settlement pro-rations and credits, PREIT made $23.1 million on the sale of the South Mall, according to the release.
North Hanover Mall is a 452,000-square-foot facility anchored by J.C. Penney, Sears, Dick’s Sporting Goods and a new Burlington Coat Factory. Sales at North Hanover were $275 per square foot and non-anchor occupancy was 79.3 percent as of March 31, according to the company.
Sales and occupancy at the mall, as well as Nittany and South Mall, generally lag behind PREIT’s portfolio that averaged sales of $377 per square foot and non-anchor occupancy of 90.3 percent as of March 31, “making the properties ideal candidates for the company’s disposition program,” according to the release.
“The successful completion of the sale of South Mall, coupled with our agreement to sell Nittany and North Hanover Malls, is a significant step for PREIT,” said Joseph F. Coradino, PREIT CEO. “We have made meaningful strides in reconstituting and elevating PREIT’s portfolio quality, particularly at a time when the market is inundated with lower quality assets for sale. With the near completion of our disposition program, we are keenly focused on successfully operating our higher-quality properties, which have the most potential for long-term value creation and strong operating results. I am confident that our shareholders will be pleased with the value proposition in PREIT’s higher-quality portfolio.”
PREIT sold the Chambersburg Mall in Franklin County in November for about $8.8 million. At that time, Coradino said in a statement that the mall had been “among our weakest performing properties.”