Struggling Century III Mall in West Mifflin sold for $10.5 million -- a bargain in the eyes of one local real estate executive.
Moonbeam Capital Investments LLC of Las Vegas secured the 1.3-million-square-foot complex for that amount, according to a deed filed earlier this week with the Allegheny County Department of Real Estate.
The $10.5 million is lower than the mall's 2012 property assessment of $27 million. While the value spiked to $134 million in this year's property reassessment, borough officials are expecting that to be appealed and significantly reduced.
In addition, the price is far less than the $231.2 million that CBL & Associates paid for Monroeville Mall in 2004. It's slightly more than the estimated $8 million that THF Realty paid for the vacant Greengate Mall on Route 30 in Westmoreland County in 2003. That mall, built in 1965 as the county's first, was demolished to make way for a Wal-Mart.
Century III has fallen on hard times over the last decade. It at one time was one of the region's premier malls, with 200 stores and restaurants. It has lost a number of retailers in recent years, including KB Toys, the Disney Store and Old Navy. It is now about 40 percent vacant, with less than half of the 20 restaurants it once had.
Moonbeam purchased the mall from an asset management firm that acquired the property in 2011 from Simon Property Group, which had defaulted on a $79 million loan.
Peter Sukernek, vice president and general manager of Howard Hanna Commercial Real Estate Services, said the $10.5 million Moonbeam paid for the property amounted to a "bargain price."
"It's a very low price and it's a low price in relation to that particular property because of the vacancies that exist in it and the apparent difficulty that the Simon Company had in upgrading it and re-leasing it during their period of ownership," he said.
Mr. Sukernek said the new owner likely will have to make a substantial investment in the property in its attempt to turn it around.
Brian Kamauf, West Mifflin manager, said he has a hard time assessing the sales price because he doesn't know whether there were factors, such as a debt restructuring, that could have influenced it.
"Do I think it's worth more than that? Probably. I can't really dictate the sale or the cost of that. There's probably more involved than we're aware of," he said.
Mr. Kamauf said that representatives for Moonbeam, in discussions with the borough, have indicated that they want to maintain the property as a mall, although they also may try some mixed uses like office space.
He said the borough is encouraged that the new owner sees value in the complex, which remains an important economic and tax generator in the community.
"I believe they can revitalize it and bring it back," he said.
Mark Belko: email@example.com or 412-263-1262.