A casualty of the COVID-19 pandemic, declining retail sales and market forces, Charlottesville’s Fashion Square Mall is losing stores, under new management and appears to be headed to sale, according to reports and court documents.
A number of stores have permanently closed at the mall, which sits near the intersection of U.S. 29 and Rio Road, since the start of the COVID-19 pandemic. Earlier this summer, a market research firm said the company that manages the mall is looking to bring the property to market.
In August, J.C. Penney announced it would close its location at Fashion Square as part of its bankruptcy reorganization. J.C. Penney joined The Sleep Number Store by Select Comfort, Maurices, Justice, AT&T, GAP and GNC on the roster of shuttered stores in the mall.
The mall is under new management, after owner Washington Prime Group reclassified Fashion Square from a Tier II property to a non-core property in 2019. The company has been working to remove the mall from its assets.
Late last year, the $45.2 million Charlottesville Fashion Square loan — which is split across two commercial mortgage-backed securities — was sent to special servicing.
After a request by Midland Loan Services, the special servicer for Fashion Square, a judge in March approved the appointment of Krista Freitag as special servicer. Freitag then hired The Woodmont Company to manage and lease the property.
Neither Freitag nor representatives from The Woodmont Company responded to multiple requests for comment.
In June commentary from Trepp LLC, a New York-based commercial real estate data and research provider, the company noted that Midland is “assessing the property to determine the right time to bring it to market for sale.”
According to documents and reports filed in Albemarle County Circuit Court, since being appointed in March, Freitag has been reviewing financial information, contacting a “prospective JCP purchaser” and finalizing “rent relief package and recommendation for Sbarro,” among other things.
Official property occupancy and tenant activity were not listed in the receiver’s reports, citing “the confidential and sensitive nature of the information.”
A number of mall stores that have closed since late 2018 were owned by companies that declared bankruptcy — including Sears Holdings, Charlotte Russe, Crazy 8, Payless ShoeSource, Charming Charlie, Destination Maternity and GNC Holdings.
But other retailers that have not filed bankruptcy have shuttered their Fashion Square locations, including Coach, which closed its store earlier this year.
Other shopping centers in the area have also seen the loss of national retailers during 2020. Stein Mart, which announced it was filing for bankruptcy and shutting down all locations, is closing its location in the 29th Place shopping center. According to Federal Realty Investment Trust, grocer Lidl, which has tried to open in two other locations in Albemarle, will fill that vacancy in 2021.
Pier 1 Imports closed its Shops at Stonefield location earlier this year after the company filed for bankruptcy.
More closures could be coming to the area, as other retailers with stores in the area, like Tuesday Morning, have said they will close stores as they filed for bankruptcy, and other companies plan to close locations as part of company restructuring, like L Brands with Victoria’s Secret. Neither company has yet announced their latest round of closures.