Santa Monica-based Macerich Co., a real estate investment trust, plans to complete the purchase in the first quarter of next year.
Macerich chairman and chief executive Arthur Coppola said in a news release that the purchase of Green Acres, along with the Kings Plaza Shopping Center in Brooklyn from a Vornado subsidiary for $751 million, "allows us to build on our New York portfolio and will be an excellent complement to Queens Center," a mall in Elmhurst owned by Macerich.
Coppola said that stores with low sales could be replaced with better-performing tenants.
Green Acres is 94 percent occupied and its tenants' annual sales exceed $520 per square foot, Macerich said in a news release.
Over the years, the Green Acres Mall has faced challenges trying to broaden its customer base to attract aspirational and upper-middle-income shoppers, said Marshal Cohen, retail analyst with the NPD Group, a Port Washington market research firm.
Green Acres has a reputation as a social hangout for teens and youths, which deters some customers from coming, he said. "They have been trying to figure out how they can find a way to recapture the pure retail business rather than just the social hangout business," Cohen said.
Macerich, which also owns The Shops at Atlas Park, in Glendale, Queens, has connections with retailers and experience upgrading malls, Cohen said.
"Macerich's core business is malls and they have seen gross revenues of their tenants that are now approaching 2007 levels," David Pannetta, president of the trade group Commercial and Industrial Brokers Society of Long Island said in an email. Pannetta said Green Acres was "an extremely successful mall."
In an April letter to shareholders, Vornado chairman Steven Roth signaled the company planned to reduce its mall portfolio: "We certainly have the expertise to lease, manage and develop mall product, but with only a handful of malls we are in a no-man's land."
Vornado refinanced the shopping center in 2008 for $335 million. The company reported as of June 30 that mortgage had $308.8 million outstanding and was due in February.