Global real estate player Hines has put the upscale Galleria shopping center in Edina up for sale.
Houston-based Hines acquired the property in 2012 for $127 million from Gabbert & Beck, who developed the Galleria, which was built in 1974. Hines completed an expansion of the mall in 2017.
Representatives with JLL and the Galleria could not immediately be reached for comment. A Hines spokesman, responding to TCB via email late Thursday evening, said the company could not comment on any "possible sale."
Technically, the Galleria is owned by a Hines-affiliated real estate investment trust: Hines Global REIT Inc. The REIT’s shareholders approved a liquidation plan in July 2018 to “sell all or substantially all of our properties and assets.” Given that, it’s no surprise that the mall is up for sale.
Marketing materials list the center at approximately 400,000 square feet of space and indicate that it's currently 95 percent occupied, an enviable number for any retail property in the current environment with ongoing store closures and bankruptcies. There are more than 2,200 parking stalls on the suburban site.
The marketing materials from JLL tout the Galleria as a hub for many retailers that don’t have other local stores: “Galleria boasts 165,000 SF [square feet] of exclusive to market tenancy.”
Galleria tenants include Arhaus, Barnes & Noble, Crate & Barrel, Design Within Reach, Filson, Shinola, Warby Parker, Roe Wolfe, Shinola, Sundance, Tiffany & Co., Louis Vuitton and many more.
The package also touts “multiple opportunities to significantly enhance the property to transform Galleria into a world-class mixed-use district.” The marketing materials indicate that ownership has been in contact with the city and outlines an ambitious list of possible additions to the site: two multifamily towers with 370 units, a luxury hotel with 154 rooms and a new 62,000-square-foot office building.
The Gabberts store at the Galleria is slated to close in July, which opens up nearly 76,000 square feet of space for lease.
“It’s a trophy asset in a very desirable retail trade area,” says Mike Sims, senior vice president of development with Minneapolis-based Launch Properties.
Before getting into the development side of the business, Sims was long one of the top brokers for retail commercial space in the Twin Cities.
“I’m bullish on the property,” Sims says. “I think they’ve done a nice job of repositioning of some of the vacancies in there.”