A West End mall could soon be under new local ownership through a deal involving two big names in Richmond real estate.
The Rebkee Co. and Thalhimer Realty Partners are currently in discussions for the potential purchase of Regency Square mall, according to numerous local brokers with knowledge of the situation.
Thalhimer Realty Partners is the development and acquisition arm of local commercial real estate giant Cushman & Wakefield | Thalhimer.
Rebkee, headquartered in Midlothian, is known for owning grocery-anchored shopping centers, as well as the recent redevelopment of the Interbake cookie factory near Broad Street and Boulevard.
Several brokerage sources said this week that the two companies are close to having a contract in place for Regency Square.
Neither Mark Slusher, senior vice president of Thalhimer Realty Partners, nor Rebkee principal Rob Hargett would comment on the potential deal.
The 818,000-square-foot mall, built in 1975, sits on 46 acres at the busy intersection of Parham and Quioccasin roads. It has been on the market since at least early November, said Sean Barrie with the real estate tracking firm Trepp.
Ownership of the mall was turned over to Bank of America in lieu of foreclosure in 2012 after Michigan-based mall giant Taubman Centers stopped making payments on a $72 million loan backed by Regency.
The property title was then transferred to LNR Partners, a special servicer for the lender that retains ownership.
Brokerage firm JLL has since handled the listing on behalf of LNR Partners. John Fee, the primary JLL broker for the property, did not return calls for comment.
As of October, Trepp reported a 95 percent occupancy rate at Regency, but many of those tenants were temporary or on reduced rent, the firm said.
A walk-through at the mall this week found at least 10 empty storefronts. The mall’s online directory lists about 70 stores.
A Trepp report from September found the mall’s appraised value to be $15 million. Trepp at the time cited brokers’ belief that the mall should sell for less than $20 million.
Henrico County’s latest assessment of the entire property, including land and buildings, came in at around $23 million.
Those numbers do not include the mall’s Sears and J.C. Penney stores because the two brands own their own buildings, comprising 363,000 square feet.
Any involvement by Rebkee and Thalhimer in taking over Regency suggests that redevelopment of the site could be an option. The resumes of both firms include a wide variety of redevelopment projects that include retail and residential spaces.
Rebkee has transformed the Interbake factory into 178 apartments, and last year made a pitch for a new ballpark and mixed-use development on Boulevard, in addition to its connection to shopping center projects.
And Thalhimer has some big projects in the works including redevelopment of the Reynolds South site in Manchester into a 17-acre mixed-use project.
Recent trends for malls would also point to changes for Regency should new ownership step in. Indoor malls have continued to fall out of favor in place of open-air centers like Short Pump Town Center and Stony Point Fashion Park.
But the same options may not be open to Regency Square.
Colliers International broker Brian Glass said redevelopment of Regency could be complicated by the fact that Sears and J.C. Penney own their buildings.
“No one exactly knows the intentions of Penney’s and Sears at this point in time, and how those stores are doing now,” Glass said. “Those stores might hold their own.”
Regency is also two stories, which further complicates the potential to create an open-air center.
And Glass said any new apartments in the surrounding area would likely require some demolition of parking decks or buildings.
“Anything could happen,” Glass said. “I think it’s going to take a lot of time, and we’re going to have to wait and see.”