By Michael Hooper
West Ridge Mall sold at auction today for about $6,025,000. The auction was scheduled to end at 11:30 a.m., but the operators of the auction extended the time in 3-minute increments before finalizing the sale shortly before noon.
The property for sale, West Ridge Mall, 1801 SW Wanamaker Road, Topeka, includes 411,000 ft of space; the seller is Wells Fargo. The buyer is unclear at this point. The mall is over 1 million square feet with some space such as Dillards owned separately.
After the close of the auction for West Ridge Mall, Ten-X, the auctioneer, said, "This property is in escrow. Once escrow has been closed, the auction details will be made available upon request."
The $6 million sale price is super cheap compared to the days when the mall was worth $45 million during the good times 15 years ago. Occupancy is 38.7%, vast cavernous space is entirely empty in this two-story mall.
It will be interesting to see what the new owner does with the property.
Marshall Barber, a Valley real estate agent in Topeka, said he does not see a path forward with traditional mall retailing filling up the space. If the city wants retail there it would probably be best to use a dominant retailer like a Costco, Ikea or Cabela's or Bass Pro Shop or Nebraska Furniture Mart. A major retailer like that might work in that space. Those types of retailers are doing very well in Johnson County, Barber said.
Perhaps the mall could be used for large-scale entertainment venues, Barber said.
Another option for the space is a logistics center.
Another option for the space is a logistics center.
Logistics centers act as transportation hubs for the movement of freight.
Or another option, I believe, is turn it into a server farm for an Amazon or Google.
Barber attended the sheriff sale when Wells Fargo bought the property for about $27 million.
David Tangeman said net income for the property shows $479,432 net income for 10 months, he estimates annual net income $575,000 annually. That equates to a 9.55% Cap Rate (net income divided by sale price). That cap rate is pretty good in the commercial real estate market. It's reasonable for a property this old to have a higher cap rate, he said.
"Given that there is so much upside potential, this is a really good price," Tangeman said. "If they can fill it up, they could make a ton of money on this. The challenge is you got to get it back to 80% occupancy. Or find other uses, event space, or office space, or warehouse. If they can increase the use, they can increase the value."
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