CHICAGO/NEW YORK (Reuters) - With its lonely hallways, half-shut food court and out-of-order restrooms, the River Oaks Center mall in suburban Chicago seems like an unlikely place to make money.
But that is exactly what two little-known, family-owned investment firms - Namdar Realty Group and Mason Asset Management - are doing here and across the country.
With about 100 malls from New York to Utah now under their ownership, the two funds have climbed quietly from anonymity to being among the country’s top-twenty mall landlords - thanks in large part to an aggressive low-investment business strategy at many of the distressed malls they have acquired over the past five years.
The approach has been aided by a slew of retail bankruptcies, and the fast-changing consumer tastes in favor of e-commerce firms such as Amazon.com Inc (AMZN.O), offering these two investment firms brick and mortar assets at bargain prices.
About half the malls Namdar and Mason have acquired are similar to River Oaks: properties with relatively low sales, sometimes in need of redevelopment and typically located in underdeveloped neighborhoods. More recently, the rest of their mall mix has consisted of healthier, but not high-end, properties as the funds have been trying to improve the quality of their assets.
A source with direct knowledge of Mason and Namdar’s strategy said the funds invest as little as possible on many of their properties, adding the aim is to hold the assets, not redevelop them.
The approach is not without its detractors, namely mall tenants and some government
