Hartford Business Journal

12 HARTFORDBUSINESS.COM | APRIL 1, 2024 The Shoppes at Buckland Hills mall has about 1.2 million square feet of space and has lost some key tenants in recent years, including Dick's Sporting Goods. PHOTO | COSTAR Uncertain Future Amid CT mall struggles, the Shoppes at Buckland Hills has quietly been mired in a years-long foreclosure matters is that several big-box depart- ment stores, such as Sears' former space, are not owned by Shoppes at Buckland Hills LLC, but by the former occupant's parent company. That complicates the mall's ability to develop new uses for those spaces. Eventually, the mall will need struc- tural changes to remain viable in the long-term, experts said. "(Buckland Hills) will definitely continue to be a big contributor to the local economy," said Mike Goman, principal of Goman + York Advi- sory Services, an East Hartford-based real estate consulting firm. "It's just got to change to reflect what the local economy wants." He said the mall needs to adapt as consumers spend less time shopping at retail stores. "I think retail will always be an important part of that location, but probably in a different form, and probably smaller," Goman said. "And when (the retail component) becomes smaller, the reduction in that space will be replaced by other uses." He envisions more restaurants and entertainment venues, along with hotels and apartments. "The site overall will get redevel- oped," Goman said. "But it won't be as large of a retail facility as it is today." Goman said consumers' tastes began changing in the early 1990s. In the late 1980s, shoppers would spend about 12 hours per month at a mall, on average, he said. In the 1990s and 2000s, the amount of time consumers spent in malls declined precipitously — down to an average of about one trip per month. Rather than consumers seeing shopping as an experience to be enjoyed, it has "become driven more By Andrew Larson alarson@hartfordbusiness.com I t's business as usual at Manches- ter's Shoppes at Buckland Hills, an approximately 1.2-million- square-foot indoor shopping center that opened in 1990, in a prime location near Interstates 84 and 91. The mall's social media accounts are cranking out content, a new Eastern Mountain Sports store is set to open soon and a mall turnaround expert, Syracuse, New York-based Spinoso Real Estate Group, has taken over management and leasing. But the Shoppes at Buckland Hills, which sits on more than 100 acres, has quietly been in foreclosure for nearly three years — and how, when and in what form it will emerge is anyone's guess. The mall went into foreclosure on June 24, 2021, after its owners fell behind on payments to Wells Fargo Bank, the holder of its $130 million mortgage. The foreclosure came amid the pandemic, which caused people to stay home and avoid crowds, exacerbating longer-term struggles faced by U.S. malls. Connecticut malls, including Buckland Hills, in March 2020 were forced to tempo- rarily close under state-mandated pandemic restrictions, creating further challenges. In fact, certain tenants at Buck- land Hills either closed perma- nently or withheld rental payments during that time period, which hindered the mall's ability to make debt payments, according to the foreclosure complaint. Buckland Hills has also lost some key anchor tenants in recent years such as Sears, which had occupied about 145,800 square feet of space, and Dick's Sporting Goods, which relocated in 2021 to a nearby retail plaza in Manchester. The Buckland Hills mall was previously owned by now-defunct General Growth Properties, which was acquired by Brookfield Prop- erty Partners in a $9.25 billion deal in 2018. The foreclosure complaint was filed in U.S. District Court in Connecticut against Shoppes at Buckland Hills LLC, a company whose principals — Jonathan Kramer, Tyler Steel And Kathleen M. Courtis — all have Chicago business addresses. Shoppes at Buckland Hills LLC failed to make required monthly debt service payments starting in May 2020 — at the peak of the pandemic, court filings said. "As a result of this default, the entire balance of the loan is currently due," the complaint states. The amount due on the loan, as of June 2021, was $120.3 million, according to the complaint, which is $24.3 million more than the proper- ty's current appraised value, town records show. The property, at the time of the 2021 foreclosure filing, "failed to generate sufficient income to support all of the borrower's financial obliga- tions," according to the complaint. Court receiver The court appointed Spinoso Real Estate Group as the receiver to manage the mall during the foreclosure. Spinoso Group files monthly status reports with the court that show the mall's financial performance. Despite being in foreclosure, the mall reported a seven-figure oper- ating profit in 2023, and has remained profitable during the first two months of this year. According to the most recent filing, submitted to the court in March, the mall has $93.1 million in assets vs. $124.1 million in liabilities, including $109.7 million still owed on the mortgage loan. The March report also listed an 83.4% occupancy rate, with 217,953 square feet of vacant space in the mall property. Spinoso Group's report lists 73 current tenants. Spinoso Group representatives did not respond to multiple requests for comment from the Hartford Business Journal. Thinking ahead While Buckland Hills mall continues to generate operating profits, it's unclear how much longer the foreclo- sure process will take. Complicating Michael Goman

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