California-based Macerich, which owns dozens of U.S. shopping centers, including the Deptford Mall, will invest $106.8 million to redevelop the Gallery and offer "accessible luxury retailing" in the 1.4 million sq. ft. Center City shopping mall, where Kmart shut its store earlier this year, owner PREIT said Tuesday.
Macerich operates 55 malls, a majority in California and other Western states, along with several in the New York area and other markets. Macerich has experience leasing retail space "in dense, urban envirnoments" -- it has malls in Brooklyn and Queens, N.Y.C. -- PREIT said in a statement. Macerich will acquire a 50 percent interest in the Gallery under terms of the deal. PREIT will invest with Macerich in Gallery improvements on a 50/50 basis.
While losing Kmart, PREIT's plans for the complex have been buoyed recently by New York store chain Century 21's committment to renovate and open in a long-vacant space in the former Strawbridge & Clothier store that forms part of the Gallery complex.
In a statement, PREIT called the future improved Gallery "Philadelphia’s only transit-oriented, retail anchored multi-use property offering accessible luxury retailing and artisan food experiences." PREIT boss Joseph F. Coradino said Macerich would help make the Gallery "a one-of-a-kind, premier center" and predicted Macerich would add "strong leasing relationships to unlock significant value in The Gallery."
Also, Macerich CEO and Chairman Art Coppola said he looked forward to investing in "one of the top real estate markets in the United States," with "strong long-term growth prospects."