With its lonely hallways, half-shut food court and out-of-order restrooms, the River Oaks Center mall in suburban Chicago seems like an unlikely place to make money.
But that is exactly what two little-known, family-owned investment firms—Namdar Realty Group and Mason Asset Management—are doing there and across the country, Reuters reports.
They’ve slowly built retail property empires by buying low and spending little to maintain their properties.
With about 100 malls from New York to Utah now under their ownership, the two funds have climbed quietly from anonymity to being among the country’s top-twenty mall landlords.
The approach has been aided by a slew of retail bankruptcies, and the fast-changing consumer tastes which offers these two investment firms brick and mortar assets at bargain prices.
About half the malls Namdar and Mason have acquired are similar to River Oaks: properties with relatively low sales, sometimes in need of redevelopment and typically located in underdeveloped neighborhoods.
The approach is not without its detractors, namely mall tenants and some government officials who were hoping to see more investment in their malls once Namdar and Mason took control of the property.
“When you own 100 retail properties, of course you’re going to have people having complaints … if there are issues, we deal with them,” Namdar President Igal Namdar says. “We have a very high retention rate for our tenants, which shows us we are doing a good job.”
