The MacArthur Center, a nearly 1 million-square-foot mall in Norfolk, Virginia, has been put on the market and is advertised as an opportunity for redevelopment following a foreclosure.
Located in the center of Norfolk’s downtown at 300 Monticello Ave., the retail center has served as “a catalyst for development” in the city, generating over $4 billion in retail sales and $157 million in tax revenue over its roughly 20 years of operation, according to a report from Norfolk’s economic development council. But like so many large indoor malls of its era, MacArthur Center, which opened in 1999, has suffered tenant loss and high vacancy. Its potential redevelopment could have major implications for the city’s downtown growth and development going forward.
In 2019, the mall lost one of its three anchor tenants, Nordstrom, leaving 160,000 square feet vacant. Department store Dillard’s and Regal Cinema remain, but occupancy is currently at about 62%, according to the for-sale listing from the brokerage JLL. Its low tenancy is in keeping with a greater trend in malls across the country, which have struggled to remain occupied through the rise of e-commerce.
An asking price for the property was not included in the listing.
The MacArthur Center was last purchased in 2014 by Florida-based Starwood Capital Group as part of a $1.4 billion seven-mall portfolio. In 2020, it was reported that Starwood was surrendering all seven properties after defaulting on its debts. The other six properties are located Florida, Michigan, North Carolina, Texas and Richmond, Virginia. The Norfolk mall alone cost $181.3 million, according to CoStar data. Starwood did not immediately return a request for comment.
The property is located on a 21-acre parcel in downtown Norfolk that’s leased from the Norfolk Redevelopment and Housing Authority. In 2021, the city’s economic development council released a plan to encourage economic growth in downtown by 2030, which included a series of redevelopment possibilities for the site.
The report detailed three redevelopment options, including an office complex with ground-level retail, an outdoor, pedestrian-style mall with retail and residential, and a full demolition of the mall that would allow for a completely new urban district. The first steps toward redevelopment would be performing a market study of the area and identifying development partners, the report said.
The redevelopment plan is reminiscent of other communities that have seen a large indoor mall close following an anchor tenant loss. Gaithersburg, Maryland, is looking at plans to redevelop the 1 million-square-foot Lakeforest Mall, which closes in March.