Vornado Realty Trust, one of the country's largest owners of retail and office property, said yesterday that it paid $36 million for an option to buy Springfield Mall, a 1.4 million-square-foot shopping center with a JCPenney, Target and Macy's as anchor stores at the intersection of Interstate 95 and Franconia Road in Fairfax.
Under the deal, Paramus, N.J.-based Vornado would pay $80 million more and assume the property's $181 million mortgage when the purchase option is exercised, according to Roanne Kulakoff, a spokeswoman for Vornado.
In the meantime it will manage the mall and collect its rents.
According to Vornado's news release, the sale cannot be completed until the death "of one of the existing principals" in the mall's ownership group. Vornado would not elaborate on that statement, explain why the sale option is structured that way or identify who owns the mall.
According to Fairfax County land records, Springfield Mall is owned by the Franconia Two LP. A message left at the mall management office was not returned.
Built in 1973 by developer Arthur M. Fischer Inc. and Franconia Associates, Springfield Mall was last renovated in the late 1980s and sits on roughly 80 acres. Kulakoff said Vornado plans to "redevelop, reposition and re-tenant" the mall, but she declined to expand on how or what the company would do.
Local retail experts said the mall has had to compete with the malls at Tysons Corner, which have more high-profile anchor stores.
"Springfield doesn't have the same allure that Tysons does," said John Asadoorian, president of Asadoorian Retail Solutions, which represents retail tenants and landlords in deals. "Springfield is a mall that's not a star. It has a solid reputation, but it's not one that people drive great distances for."
The reason, he said, is that the anchor tenants such as Target can be found at other area shopping malls. "It's ripe for a renaissance," Asadoorian said of Springfield Mall.
The Springfield deal comes after Vornado tried to buy a share of Sears, Roebuck & Co. and help take over Toys R Us Inc. Vornado's subsidiary, Charles E. Smith Commercial Realty in Crystal City, owns 66 office properties totaling 14.2 million square feet in the District and Northern Virginia.
Some analysts said the Springfield deal is a real estate play for Vornado.
"Vornado considers it a logical redevelopment site," said Greg Leisch, chief executive of Delta Associates, an Alexandria real estate research company. "It's a healthy mall, but the real estate play is to put office space on some of the land that is now accommodating retail."
Vornado closed up 72 cents, at $81, on the New York Stock Exchange.