For store operators who are tenants at the Galleria Mall in Fort Lauderdale, there was no better time than late September, when business is slow and tourist traffic is thin, for news to arrive that fresh ownership had taken over the once-burgeoning retail destination on East Sunrise Boulevard.
Last week, the $73 million buyout by a group led by Miami Beach-based developer Russell Galbut’s GFO Investments, stirred flourishes of hope and anticipation throughout the multi-block mall.
The ownership consortium, which also includes InSite Group, Atlas Hill Real Estate and Prime Finance, wasted little time taking control of the operation after closing their deal Sept. 19. They hired Dallas-based Centennial, a retail real estate owner and operator, to manage the business.
At the Ceramic Art Cafe, Crazy Comics and Perfect Time, the small business proprietors all wanted to know what the new owners intend to do with their new property. And hopes sprang eternal.
“Who would spend that kind of money if they were not going to do something?” said Ryan Lipner, manager at Crazy Comics on the mall’s east end.
Leo Rangel, the sole proprietor of Perfect Time, a watch repair business that occupies a kiosk not far from the Apple store, said he hopes to occupy a regular store space soon.
“I look forward to seeing what the ownership brings,” he said. “People are excited. They look forward to bringing the glory to this place.”
And Karen Guzik, who established her Ceramic Art Cafe just last May, said she hopes the new owners will build momentum with a fresh cash infusion.
“We have some good anchor stores,” she said of the Galleria. “We just needed good ownership to invest in the mall.”
First things first: More tenants
In their acquisition announcement, Galbut and his partners expressed a desire to create a “community-based” enclave with residential, entertainment and retail components. They spoke of adding apartments and hotel rooms that would complement the retail operation. But they stopped short of describing in detail what shape any redevelopment program would take. They said it would take a few months.
Galbut, a developer, lawyer and CPA with deep business, philanthropic and political ties in Miami Beach and beyond, was unavailable to speak with the South Florida Sun Sentinel about the mall plans.
A past chairman of Norwegian Cruise Line Holdings, Galbut has focused on development for most of his career. GFO, the wealth management advisory firm he leads, focuses on real estate. Crescent Heights, a firm Galbut co-founded, concentrates on residential projects across the country. One of the firm’s most recent endeavors is the 51-story Gale Miami Hotels & Residences in the city’s downtown.
Jim Heilmann, the new Galleria general manager who took on his new job just a week ago, indicated he’s focused on signing up more tenants.
“There’s a lot of opportunity here,” he told the South Florida Sun Sentinel. ”We’re going to focus on leasing up the opportunity zones we have. We like the tenant mix we have right now, and we’d like to add to that.”
“i think we have an excellent foundation of existing tenants,” he added. “It’s a great place to start.”
Heilmann said the new owners “have assumed all of the leases that are now in place.”
“It’s going to take a little time to get our footing and hopefully we’ve got some interesting announcements,” he added.
Starting in the 1980s, the mall became a regional retail destination with Burdines anchoring the west end of the complex. Jordan Marsh, another big Florida name of the past, occupied space to the east. Through the years, national names including Saks, Lord & Taylor and Neiman Marcus graced the roster.
But as time wore on and the face of retailing changed through buyouts and the emergence of online commerce, most of the big traditional anchor names vanished and the Galleria’s tenant population shrank.
The present-day headliners in the mall’s lineup includes Macy’s, which displaced Burdines in the early 2000s. Dillard’s occupies a multi-level space to the east. An Apple store — among the most visited operations currently in the mall — is in between. An H&M store holds down the east end on the second level.
Other familiar names include Abercrombie & Fitch, Aldo, Banana Republic, Lenscrafters, Sephora, SunGlass Hut, T-Mobile, Victoria’s Secret and Zales.
The main restaurant lineup includes Blue Martini, The Capital Grille, P.F. Chang’s and Seasons 52.
Art galleries, clothing boutiques and other jewelry retailers are positioned along the main corridor. Chocolate aficionados can indulge at Laderach, the Swiss maker of handmade chocolates.
Vacancies to be filled
But overall, the occupancy rate is in the 60% range, a number that Heilmann hopes will rise over time.
A fair number of kiosk spaces are vacant in the middle of the main pedestrian corridor. A store space vacated by Apple, which now occupies a larger space, remains unoccupied.
Outside Dillard’s ground level, the mall’s food court poses another challenge. It’s occupied by just three eateries. Shortly past the lunch hour last Wednesday, slightly more than a dozen people sat at tables in an expansive dining area.
Hope from the insiders
Ryan Lipner, the manager of Crazy Comics, said the bulk of his business comes from tourists, followed by local residents who generate repeat business.
“I get a lot of locals that do come back because they know we’re here,” he said. “I’m in the slow end of the mall. But I don’t see that as a bad thing; as long as people know we’re here, they’re going to come.”
But more people would visit the mall, he suggested, if the food court is bulked up.
“The food court’s in bad shape,” he said. “A lot of people complain about that. I have to send people outside to P.F. Chang’s for lunch.”
Karen Guzik, who runs the Ceramic Art Cafe, is looking to build a clientele of both experienced and would-be artists interested in testing or developing their art skills on canvas or by painting ceramics. She’s advertising birthday parties for art-inclined kids.
A Brazilian native who traded in Southern California for South Florida during the COVID pandemic, Guzik prefers Florida’s business environment to California’s heavily regulated, heavily taxed climate.
“California became too liberal for me,” she said.
A dramatic overhaul? Maybe
David Druey, president of Florida for Centennial Bank, not affiliated with the Galleria’s new management group, predicted a dramatic makeover for the mall.
He said the bank, which also is not involved with the Galleria, has supported sweeping rebuilds of distressed retail properties in the past, and the Galleria likely has a full-blown makeover in its future.
“They’re going to have to change the entire project,” Druey said. “You’re going to need a retail space, but the highest and best use for the property is going vertical with apartments or condos.”
“The best use is to completely revamp that entire space,” he added.
Druey pointed to the Pompano Citi Centre as an example. It is now an open-air mall. During its redevelopment, a building that once housed a Macy’s was demolished in favor of apartments that overlook a golf course. In addition, the present-day retail outlets face outward.
“There’s value there in what they did,” he said. “You have a better experience than you do inside a Galleria Mall. I don’t see where keeping the entire mall open would make any sense.”
Whatever major overhaul lies ahead is bound to take considerable time.
The prior owner, Keystone Florida Property Holding Corp., a title holding firm operating on behalf of the Pennsylvania Public School Employees’ Retirement System, never gained traction with proposals it circulated among local government and neighborhood associations.
A decade ago, the owners offered an overhaul anchored by a 45-story condo tower. The idea was overwhelmed by neighborhood opposition.
In 2022, a fresh plan called for the mall’s demolition in favor of housing, restaurants, new shops, offices, biking and walking paths, a boutique hotel, better lighting and landscaping and a village green.
That plan, too, never got past the drawing board in the face of local opposition.
In late 2023. Keystone, which bought the mall in 1993 for $126 million, put the property up for sale.
Hope for the neighborhood
Now, area residents and business interests believe redevelopment by the new owners can instill new life into the stretch of East Sunrise Boulevard between the Middle River and the Intracoastal Waterway.
Sandi Rogacki, sales associate for Woolbright Development at the 25,000 square-foot Galleria Plaza on the north side of East Sunrise Boulevard, which is home to a Publix and Starbucks, among other businesses, said reinvestment at the Galleria Mall could “certainly help strengthen the area as a whole.”
“From our perspective at Galleria Plaza, we’re optimistic that new energy across the street would complement the existing retail mix and contribute to a broader economic lift in the surrounding community,” said Rogacki, who coordinates government relations in Florida for ICSC, the global association of shopping centers.
Local demographic data gathered by Woolbright suggests there is strong upside potential. Within a mile of the East Sunrise Boulevard strip between the waterway and the river, there are 15,292 residents. At three miles, the number rises to 136,208 and within five miles, the population figure is 270,473.
The median annual household income for the immediate vicinity is $213,000.
But as Fort Lauderdale City Commissioner Steven Glassman pointed out, the area is underserved when it comes to upper-level retail, which locally is in demand. The District 2 he represents covers the beach, downtown and Las Olas Boulevard
“We need some high-end retail,” Glassman told the Sun Sentinel. ”I hear this all the time from my constituents. They’re tired of driving to Aventura or Boca Raton to shop.”
“I know a lot of people are anxious to see the plans,” he added. ”There was a lot of worry about what might have happened there. We’re waiting with bated breath.”
