Cortana no longer listed for sale, but why?
It’s been 14 months since the Las Vegas-based owners of Cortana Mall put the 42-year-old retail property up for sale, and so far there haven’t been any outward signs of interest in or action on the property.
That may be because the mall is no longer listed for sale.
In fact, Moonbeam Capital Investment, which is a part owner and also the managing partner of the beleaguered mall, quietly took the property off the market in late 2017, just a few months after listing it for $4 million, according Mike Bristol, a commercial brokers with Dallas-based Henry S. Miller Company, which was handling the listing.
Bristol says he doesn’t know why Moonbeam changed its mind about listing the mall, which continues to lose tenants and has an estimated occupancy rate of below 40%.
One possibility, according to several real estate professionals, is that Moonbeam’s management arm—Moonbeam Leasing and Management—could be collecting management fees from other investors in the property.
Terms of the deal between Moonbeam and its partners are unknown, but it would not be unusual for the management firm to collect fees from the property. As long as some tenants continue generating lease payments, it might make more sense for Moonbeam to continue operating it than to sell it at what would almost assuredly be a significant loss.
Moonbeam leasing agent Shawl Pryor, who oversees Cortana, confirms the aging property is no longer for sale but declines to elaborate.
Moonbeam acquired Cortana in 2013 for $6 million, promising to reverse the fortunes of the one-million-square-foot retail property by reinventing it for alternate uses. But in the five years since, Cortana has continued to hemorrhage tenants, including its major retail anchors.
Since Moonbeam acquired the mall, JC Penney, Macy’s and Sears have all closed their Cortana locations and listed their spaces for sale. In late September, Virginia College—which occupied a former Mervyn’s department store anchor space and was often heralded as the kind of alternate use tenant the mall should try to attract—announced it also would be shutting down.
Marketing the vacant anchor tenant spaces has been difficult, according to Austin Earhardt with Beau Box Commercial Real Estate, which is listing the 12-acre JC Penney space.
Adding to the challenge are decades-old lease restrictions that limit the kinds of users that can take over retail anchor space. Though such restrictions can be waived, Earhardt says Moonbeam has been reticent to do so.