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New owner of Sunrise Mall seeks input on upgrading and repurposing plans

A joint venture led by Urban Edge Properties

A joint venture led by Urban Edge Properties paid $29.7 million for the mall property, which covers 77 acres. Credit: Debbie Egan-Chin

The Sunrise Mall deal was so valuable that it compelled Urban Edge Properties to use its "opportunistic situations" fund for the first time, according to Jeffrey Olson, chairman and CEO of the retail-focused real estate investment trust.

Olson said Urban Edge raised $400 million about three years ago, and decided to dip into the fund while purchasing the Massapequa mall in late 2020. Olson praised the mall's price and 77-acre location on Tuesday while participating in a virtual panel hosted by the Long Island Association, a business advocacy group.

"We raised about $400 million in cash for opportunistic situations. This was the first one that we pulled the trigger on," Olson said. "There aren’t many properties of this size in Long Island, especially on the South Shore. … We saw value."

A joint venture led by Urban Edge Properties paid $29.7 million for the mall, which is about one-fifth of the $143 million the property traded for in 2005. Olson said the trust needs more time to assess its redevelopment plans.

"[Sunrise Mall] clearly needs to be upgraded and repurposed. It's a bit early to tell exactly where it's going. We are partnering with the community and our tenants to best understand everyone's needs," Olson said. "If anyone on this call has any interesting ideas, please give me a call."

Across its portfolio, Urban Edge has been adding grocery stores to shopping centers and converting retail areas into industrial, residential and medical office space, Olson noted.

He said COVID-19 has hastened the rise of e-commerce and the retail market's evolution, but the panel noted it's more difficult to assess the pandemic's impact on other real estate sectors.

Mike Maturo, president of RXR Realty LLC, anticipates modifications in the office industry but doesn't expect long-lasting changes to emerge until more companies return their workers to the workplace.

Maturo estimated that 12% to 15% of the real estate firm's office space is in use in New York City, compared to 50% to 60% on Long Island. He said people are more hesitant to commute, when they must take public transit. Larger companies are also more common in the city, and are more likely to be waiting for the OK under a national return-to-work strategy, Maturo said.

"It seems like the office is going to be something more where you come to meet, where you come to collaborate … perhaps more so than where you just come to do day-to-day tasks," he said.

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