The Galleria Dallas mall is getting a new owner.
A unit of Metropolitan Life Insurance has taken ownership of Galleria Dallas and the Westin Galleria Hotel. The mall’s previous owner was UBS Realty Investors, which held ownership since 2002. UBS also bought the hotel in 2005, according to The Dallas Morning News.
MetLife Investment Management held $315 million in loans against Galleria Dallas, dating back to 2014, and county records show that UBS Realty agreed to relinquish ownership of the mall and hotel.
“Galleria Dallas and Westin Galleria Hotel are high-quality assets well-positioned in the Dallas market,” said Dave Franecki, a spokesperson for MetLife, per The Dallas Morning News.
“While we cannot comment on the specifics of this transaction, MetLife Investment Management has a proven track record in institutional real estate and a dedicated team in the Dallas area,” he continued.
The transaction does not include the Galleria’s adjoining office buildings, which are under separate ownership.
UBS, a Connecticut-based division of the Swiss bank UBS AG, acquired the 1.9 million-square-foot mall in 2002 for around $300 million and spent $95 million to buy the Westin Hotel three years later.
Back then, occupancy rates sat at 95%. They are now below 90%, according to Dallas-based retail real estate firm Weitzman.
While Galleria Dallas has been a flagship mall property in Texas over the years, known for having the largest indoor Christmas tree in the nation, its value has since declined as the retail environment looks considerably different than it did decades ago. The mall and hotel were recently valued for property taxes at just over $200 million.
The new owners are working with Fort Worth-based Trademark Property Co. on a potential redevelopment plan to add apartments, more hotel rooms, and offices. Still, they might have their work cut out for them dealing with the City of Dallas’ notorious permitting process.
As previously reported in The Dallas Express, builders and contractors have voiced frustration for years over the City’s backlogged and onerous permitting process, which has significantly slowed development and pushed residential and commercial rents up as a result.
“Galleria Dallas is a premier destination for shopping, dining, and entertainment at one of the best locations in the U.S.,” Trademark CEO Terry Montesi said in a statement. “We look forward to working with MetLife Investment Management on this landmark asset.”
The redevelopment plan considered by Trademark would tear down some parts of the mall for new construction, according to the Dallas Morning News.
Steve Lieberman, CEO of Dallas-based The Retail Connection, said that malls are flourishing nowadays if they are in the right market and with the proper support of consumers around them.
“But they are the exception,” he said, adding that the shopping experiences consumers have come to expect are continuing to evolve and require a “reconfiguration for these large mall properties.”
“We will end up with better shopping environments,” he said.