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CBL ADDS HOMES TO CALIF. MALL

BY DEBRA HAZEL

Developer CBL & Associates Properties has become the latest REIT to look at introducing residential space into its portfolio of super-regional malls. Last month CBL and partner MG Herring Group sold 21 acres to San Diego-based residential developer Touchstone Communities, which will build a luxury apartment building near the Imperial Valley Mall, in El Centro, Calif.

Chattanooga, Tenn.-based CBL is considering similar deals for many of its properties, says Michael I. Lebovitz, senior vice president of mall projects. “We’re looking at it and evaluating it as part of our new development and renovation programs,” he said. “It’s a case-by-case basis.”

The 750,000-square-foot mall opened in March, with Dillard’s, JCPenney, Robinsons-May and Sears as anchors. The center was a logical choice for the integration of housing, says Lebovitz. “It’s a growing residential market,” he said. “There’s a need for luxury apartments.”

The apartment complex, located along the mall’s outer ring road, across from the UltraStar cinema and food court entrance, will contain 255 luxury units in a landscaped setting; amenities will include a large swimming pool and party facilities. The building is scheduled to open in the summer or fall of next year. A pedestrian crosswalk will connect the mall and apartments.

Touchstone has control over the development but worked closely with CBL on the site plan to ensure a “harmonious and complementary” project, says Lebovitz. “They are a very progressive residential development company focused on apartment communities,” he said. “We thought it would be great.” Should CBL decide to proceed with residential developments at other centers, a partner would similarly be brought in to develop those, he says.

Simon Property Group is among the other developers that are doing the same. Simon has said that it will evaluate the mixed-use prospects at all its existing and upcoming centers. The first in the pipeline is South Park Mall, in Charlotte, N.C., which will place condos and some retail on a corner lot near the mall. Simon’s tony Phipps Plaza, in Atlanta, will see the addition of luxury condos too.

Lifestyle centers have been combining retail with residential for some time, in many cases placing apartments and condos directly above the stores. Examples include Paseo Colorado, Pasadena, Calif., developed by TrizecHahn and Post Properties (now owned by Developers Diversified Realty Corp. and Lehman Bros.), and Federal Realty Investment Trust’s Santana Row, San Diego, and Pentagon Row, Arlington, Va.