Dealmaker: Montana Southgate Mall Sells for $58M

Washington Prime Group, Columbus, Ohio, purchased Southgate Mall in Missoula, Mont., from Southgate Mall Associates. for $58 million.

NKF Capital Markets’ Executive Managing Director Thomas Dobrowski, Director Katharine French and Associate Ed Leinss handled the transaction.

Southgate Mall Assocs. recently converted the 1978-vintage one-level enclosed regional shopping center into a hybrid open-air town center. A 77,000-square-foot Dillard’s and a 65,660-square-foot JCPenney anchor the 448,000-square-foot center. Additional major tenants include a recently opened nine-screen AMC dine-in theatre and Lucky’s Market as well as Bed Bath & Beyond and H&M stores.

“Southgate Mall presented a unique opportunity to investors in that it has been privately owned by its original development group, the Lambros family, for over 38 years,” Dobrowski said. “The redevelopment of the former Sear’s box, which began in 2015, has led to the mall’s recent transformation, with newly executed leases and a hybrid open and enclosed town center development which appeals to today’s users and shoppers.”

In conjunction with the ongoing redevelopment, the Lambros family and Southgate Mall Assocs. successfully petitioned the City of Missoula to create a new road providing direct access to the residential and commercial area west of the mall. Positioned as the anchor of a retail and population growth corridor in Missoula, Southgate Mall is in a $200 million tax increment financing improvement district.

Dobrowski called Southgate Mall’s appeal to real estate investment trust Washington Prime significant, “because many mall properties currently on the market are not deemed high enough quality to appeal to retail REITS,” he said.