December 26, 2007 Wednesday
By ALAN WECHSLER Business writer

COLONIE - In January 2005, Feldman Mall Properties Inc. bought Colonie Center for $84.2 million. Officials planned to spend an additional $10 million to spruce it up, and hoped to raise the mall from what they called Class B retail space to Class A.

When the company first invested in the mall, sales per square foot were about $285. As of Sept. 30, they were $305.31 per square foot, according to third-quarter results released by Feldman last week.

By Feldman's definition, a Class A mall sees tenant sales of $350 per square foot.

Still, Larry Feldman, chairman of the real estate investment trust, said he was satisfied with how the mall was doing.

"This is fitting pretty much right on track," he said. "We will hit the $350 mark in the next year."
The company specializes in buying underperforming malls, increasing their appeal and selling them again, usually within a window of three to five years. Lately, though, Feldman Mall Properties has seen some unrest among investors, who have said the stock is not doing as well as expected and the company should sell itself.

Colonie Center's occupancy had been declining since the late 1990s, but has been up significantly since its 2005 purchase by Feldman. At 73 percent in 2003, occupancy is now at 91 percent, the company reported last week.

Of seven malls, Colonie has the third-best sales of all properties run by the Long Island-based company.
Under Feldman, the 41-year-old mall has seen many improvements, with a new facade and numerous new draws, including retailer L.L. Bean, bookseller Barnes & Noble, and restaurants P.F. Chang's China Bistro and The Cheesecake Factory. A new multiplex cinema, set to open in the spring after several delays, should increase foot traffic to the mall, too.

Howard Carr, president of The Howard Group LLC, a commercial real estate developer and broker in Colonie, said he was impressed with the mall's progress.

"Cheesecake is doing incredible, Chang's is doing incredible and Bean is way above projections," said Carr, who helped bring L.L. Bean's first New York retail store to Colonie Center.

Carr said he was not familiar with Feldman's Class A/Class B designations. He said malls are grouped by market size, so that a property in New Jersey would have a different classification than a similarly sized one in upstate New York.

Larry Feldman said some of Colonie Center's new tenants did not open until the last quarter of 2006, and that sales figures from the next quarter will show more improvement. L.L. Bean opened in mid-September, so it would not have had much impact on the third-quarter sales reported last week. Chang's opened in early October.

"It's really beginning to accelerate," he said of the mall's redevelopment.