ST. CLOUD – A Minnesota investment group plans to breathe new life into a half-vacant, outdated mall on the city's west side.
Edina's Brate Capital bought Midtown Square Mall, a 225,000-square-foot building less than a mile from Crossroads Center mall, in December for about $8 million. The mall was built in his mid-1980s, and at its peak housed a busy Old Country Buffet, a busy driver's license office, and several retail stores.
But like malls across the country, foot traffic has declined over the past decade as customers spend more online. Other stores, including Stafit Gym and K's Midtown Cafe, an offshoot of the popular greasy spoon K's Kitchen in neighboring St. Joseph, also recently closed their doors to the mall.
“It had a huge negative impact on the building,” said Hassan Nourie, managing partner at Breit.
The mall still has a few retail stores and a sports bar, but much of the space it occupies is occupied by nonprofit organizations, medical services, and several state offices, including the Minnesota Department of Health and the state Department of Labor and Industries. used by the bureau.
“This particular property is already changing in that it doesn't have as much retail as it used to. We have a lot of business professionals and medical tenants,” Nourie said. “Malls have to adapt, so the potential for repurposing really starts to make sense.”
Although the plans are far from complete, Brate plans to invest at least $3 million in improvements to the property and is prepared to rethink how the space is used. The 50% vacancy rate will allow the new owners to create anywhere from 500 square feet to more than 30,000 square feet of space for potential future tenants, Nourie said.
“We are currently looking to leverage some of these large vacancies to bring in large medical, warehouse or other non-retail users who would like to occupy this building. “It has the potential to significantly change the look and feel of the city,” he said.
Brait has successfully acquired similar large malls with low vacancy rates in other markets across the country and transformed them into congested spaces with indoor sports complexes, warehouses, and flexible industrial uses. Nurie said a similar project could happen in St. Cloud.
Kingshuk Mukherjee, dean of the School of Global Business Leadership at St. Benedict College/St. Louis University Johns University said the mall's previous owners had been trying to gradually move away from being a retail focus, but the pandemic The need for in-person workspaces has been significantly reduced.
“At that time, they were looking to move into office space, but then COVID-19 hit and everything changed,” Mukherjee said.
Mukherjee said he is not familiar with specific plans for Midtown Square Mall, but believes malls remain relevant because they provide a space for communities to come together, even as online shopping increases. Ta. Mukherjee suggested the new owners create experience-based amenities to attract people.
“Shopping malls need to offer an experience that goes beyond just buying and selling,” he says.
One of the first changes the new owners will make will be the addition of a new restaurant, which is expected to be announced this year.
“We are a successful restaurant with three locations in the Minneapolis area,” Nourie said. “They plan to open two more stores, one of which will be here.”
The mall is located at 3333 W. Division St., on the city's main east-west road, just east of Hwy. Route 15 is the main north-south route through the area.
“Division Street has a lot of traffic, more than 33,000 cars a day, and visibility is good,” Nourie said. “This is an ideal opportunity for anyone looking to enter the market and our flexibility allows us to make some significant changes.”