Taubman’s $475M Mall of San Juan gets “knocked out” after reopening

The upscale mall was supposed to be a symbol of Puerto Rico’s economic growth. Today it's anything but.

New York Weekend Edition /
Aug.August 08, 2020 12:00 PM
Mall of San Juan (Taubman)

Mall of San Juan (Taubman)

The Mall of San Juan, in Puerto Rico’s capital, opened to great fanfare in 2015.

But the last five years haven’t been kind to the $475 million upscale shopping center, which has grappled with retail bankruptcies, natural disasters and the coronavirus pandemic.

Today more than a third of the 631,000-square-foot mall is empty and the property will soon lose its last remaining anchor store, Nordstrom, according to Bloomberg. The mall’s rising vacancy and mounting financial troubles are the result of bad luck, bad timing, and possibly overoptimism on the part of developer Taubman Centers.

While roughly half of Puerto Rico’s population lives below the poverty line, Taubman COO Bill Taubman said the company’s research pre-development “showed substantial wealth, growth in tourism, [and] growth in the quality of tourism.”

The Puerto Rican government had recently put $3 billion toward building and remodeling hotels and was offering an attractive suite of financial incentives for outside investors.

But things started to go awry shortly after the mall opened.

The same year that Puerto Rican officials celebrated the mall’s opening, Gov. Alejandro Padilla acknowledged the territory was insolvent. Two years later, Puerto Rico filed the largest municipal bankruptcy in U.S. history in May 2017, according to Bloomberg.

Hurricane Maria devastated the island that fall and forced some stores in the Mall of San Juan to close for more than a year. The pandemic then forced the mall to shut its doors for 76 days earlier this year.

“They were betting on tourists, they were betting on high-income individuals,” said University of Puerto Rico economist Jose Caraballo-Cueto. “[The pandemic] was the last punch that they needed to be knocked out.”

Taubman Centers, which didn’t elaborate on plans to turn the property around, said that other department stores or entertainment venues might be interested in renting space. [Bloomberg] — Dennis Lynch


Related Articles

arrow_forward_ios
Century 21 president Marc Benitez (LinkedIn; iStock)
Return of the retailer: Century 21 relaunches
Return of the retailer: Century 21 relaunches
Best Buy has closed about 20 of its big-box stores in each of the past two years (iStock)
Best Buy lays off 5,000 staffers, increases store closures
Best Buy lays off 5,000 staffers, increases store closures
421-427 East 14th Street (Google Maps, iStock)
Stuy Town to get new 17K sf grocery store
Stuy Town to get new 17K sf grocery store
Kohl's investors have a list of changes they want implemented. (Getty)
Activist investors urge Kohl’s to cut real estate, inventory
Activist investors urge Kohl’s to cut real estate, inventory
The American Dream mall in East Rutherford, New Jersey (Getty)
Bonds for troubled American Dream mall up 25% this year
Bonds for troubled American Dream mall up 25% this year
Brian Kingston of Brookfield Property Partners (left) and Bruce Flatt of Brookfield Asset Management
Brookfield’s internal affairs
Brookfield’s internal affairs
NYC Hospitality Alliance's Andrew Rigie (Getty, Twitter/Illustration by Kevin Rebong for The Real Deal)
92% of restaurants could not make December rent
92% of restaurants could not make December rent
Marcus Samuelsson and his Red Rooster restaurant in Miami’s Overtown (Getty, Google Maps)
New York restaurateurs decamp to South Florida
New York restaurateurs decamp to South Florida
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...