Jaime Sturgis Talks South Florida Mall Conversions with The Real Deal

The Native Realty CEO shared his insights on the redevelopment of struggling South Florida malls with The Real Deal reporter Francisco Alvarado. Developers are increasingly seeking to incorporate additional uses, including housing, into mall properties.

“Indoor malls, which usually have large surface parking lots, present a favorable opportunity for developers to build large mixed-use projects amid a scarcity of large developable tracts in dense neighborhoods, noted Jaime Sturgis with Native Realty, a Fort Lauderdale-based brokerage.

“You have these big boxes and big pads on a tremendous amount of land that is underutilized,” Sturgis said. “These big retail centers are in prime locations that are well suited for some type of redevelopment, usually market-rate and affordable housing.”

Developers planning mall-to-mixed-use conversions also benefit from dealing with willing sellers that want to offload underperforming big box spaces, or that want to partner with a builder to add a residential component to an indoor shopping center, Sturgis said.

“As occupancy wanes, the debt service ratio for malls falls, and loans mature. Simultaneously, owners of those properties start exploring alternative exit strategies,” Sturgis said. “They can sell a portion to someone who can come in and do a better development, or they may do a joint venture by bringing in an equity partner to redevelop the asset.”

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