Stamford Town Center mall goes up for sale

By Peter Healy

STAMFORD, Apr. 11, 2008 (McClatchy-Tribune Regional News delivered by Newstex) --
The 130-store Stamford Town Center mall, a fixture in the city since 1982, is for sale at an undisclosed price.

Karen MacDonald, spokeswoman for Bloomfield Hills, Mich.-based Taubman Realty Group, the operator and 50 percent owner of the mall, said its partner, a fund managed by UBS (NYSE:UBS) Realty Investors LLC, led to the marketing of the property.

"We regularly buy and sell properties in investor portfolios to execute portfolio diversification and risk strategies and to attempt to earn the best possible return for our investors," said Kris Kagel, spokesman for UBS AG. The Swiss financial giant operates an investment bank in Stamford and is the parent of UBS Realty Investors.

UBS and other investment banks have suffered recently because of investments in subprime mortgage-backed securities. UBS employs about 4,000 people in Stamford.

Shoppers won't notice any changes because of the pending sale, MacDonald said.

"Stamford is a terrific property and the sale in no way reflects any unhappiness on either our partners' part or ours," she said. "It is business as usual for the employees, shoppers and retailers at the Stamford Town Center."

Taubman is marketing the mall property through New York City-based Eastdil Secured, a real estate investment banking company that is part of Wells Fargo & Co (NYSE:GWF) (NYSE:JWF) (NYSE:WSF) (NYSE:WPF) (NYSE:WFC) , MacDonald said.

Taubman could buy UBS' share, she said. "It is a great center and we would continue to own it if an acceptable price is not offered," MacDonald said.

"However, we both want to capitalize on the asset, which has been enhanced by the recent renovation and expansion," she said.

MacDonald was referring to a recently remodeled 454-seat food court on the mall's seventh level and an addition that opened late last year where Filene's department store had stood. Six full-service restaurants, a 40,000-square-foot Barnes & Noble (NYSE:BKS) bookstore and H&M clothing store are in the mall's pedestrian-friendly wing on Tresser Boulevard.

Those improvements might have pushed the Town Center to a high point in the market, said Jack Condlin, president and chief executive officer of the Stamford Chamber of Commerce.

"I would not be surprised, if at some point, Taubman decides to buy out the partner UBS," Condlin said.

The Taubman name will enhance the mall's market value, said Norman Lotstein, retail specialist with Pyramid Real Estate Group in Stamford.

Taubman has owned half the Stamford mall since it was built. Stamford-based F.D. Rich Co. developed the property.

A publicly traded real estate investment trust, Taubman Centers Inc. (NYSE:TCO PRA) (NYSE:TCO PRG) (NYSE:TCO PRH) (NYSE:TCO) , owns and/or manages 24 malls in 11 states through its Taubman Realty Group entity, including Westfarms Mall in Farmington and West Hartford.

Taubman malls yield more than $550 in annual sales per square foot, the company said in a statement earlier this month.

"Taubman malls are among the highest-performing malls in the United States, and the Stamford Town Center is one of the best-performing Taubman malls," Lotstein said. "That should make it a highly attractive property for prospective purchasers. I hope the next buyer can continue the improvements that have been so effective at the mall in the last two years."

The Stamford mall should attract viable buyers despite current economic conditions, said Cory Gubner, president and chief executive officer of GVA Williams of Connecticut commercial real estate, whose office is in Stamford.

"There is still a large number of institutional investors, both domestic and international, for assets that are best in class," Gubner said. "The Stamford Town Center has a good tenant mix and the recent improvements that were expertly executed, brought a modern lifestyle feel to the entire complex."

Craig Johnson, president of the New Canaan-based retail consulting firm Customer Growth Partners, agreed.

"Taubman has done a decent job with enhancing what has been a very challenged retail property, given its design, history and dependence on apparel stores," Johnson said. "Traditional enclosed malls are still a challenged part of the retail sector."

Johnson said his company's research indicates enclosed malls receive less than 16 percent of U.S. retail sales, down from 38 percent in the mid-1990s. Smaller, open-air shopping centers, also known as lifestyle centers, have become more popular in recent years, he said.

While the Stamford mall's physical changes have been positive, Sandra Goldstein, executive director of Stamford's Downtown Special Services District, said she cannot endorse an ownership switch.

"We have had a close and long relationship with the Taubmans and (Chief Operating Officer) Bill Taubman all of these years," Goldstein said. "They have been very supportive of all of our events. I am very disappointed they are selling."



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