From his dual perch in Las Vegas and New York, all the trouble signs got the attention of Steven Maksin, 46, a mall turnaround specialist who loves a challenge as much as making money. Like picking stocks, he spots underperforming malls, buys them cheaply with cash, pumps money into reviving them, and waits for a return on his investment.
He has had success with malls and shopping centers in Texas and Colorado.
"I was intrigued," Maksin said of the beaten-down mall that sits off Exit 47A on I-295 in Burlington Township. He then ticked off every developer's dream: access points (it's near I-295, the New Jersey Turnpike (Exit 5), and Route 541; great demographics (population and household income); and traffic, lots of it.
"He buys these things dirt cheap, because if it was just the land, it wouldn't be that cheap," said Charles Swain, president and principal of Colliers International Real Estate Management Services in Atlanta, who met Maksin last month when the landlord and investor was on an economic development panel.
Maksin bought a Georgia mall last year. "He buys a property that's still generating cash flow, and waits to see what the community needs before he makes his move," Swain said. "I wish I was a risk-taker like him."
Maybe it's because Maksin's company - Moonbeam Capital Investments L.L.C. - is based in Las Vegas, where the term all in is commonplace. But Maksin is definitely all in, to the tune of $230 million, on top of the $4.4 million he paid to acquire the mall in late 2012.
Starting next spring, here's what Maksin says to expect: a complete face-lift of the mall's facade; 1.2 million square feet of retail added to the existing 300,000 square feet; the development of a "hybrid mall" that combines a traditional, indoor mall with an outdoor, lifestyle center for shopping, dining and entertainment, including a Dave and Buster's-type family center, and a hotel. Throw in some water fountains and benches to rest on in between purchases or while waiting for your reservation at the dozen new restaurants.
When you have 150 acres, and an additional 50 acres of "green space" to work with (some of which belong to the Hovnanian family of Philadelphia), the sky's the limit, said Maksin, Moonbeam's chief executive officer. Full build-out is expected to take two to five years and to be done in stages. The mall will stay open the entire time of construction.
"This will be one of the largest and most exciting projects on the East Coast," Maksin said last week from Las Vegas. "And most successful."
"He's got a different vision for these malls," Swain said of Maksin. "They can't continue to be what they are now."
Maksin cited Spectrum Plaza in Houston and Greeley Mall in Greeley, Colo., as two of his big successes. Maksin bought Spectrum Plaza in August 2011 when it was about 30 percent occupied. By February 2012, occupancy shot to more than 80 percent. That same year, in April, Maksin acquired Greeley Mall when it was less than 60 percent occupied. He said he is negotiating deals from national tenants to boost occupancy to more than 90 percent. Sales per square foot at the mall went from $300 to $400 within two years.
Maksin said the Burlington mall project stood out and represented a reawakening of the commercial retail industry.
"I call it a recession and depression that started in 2008, and by 2010, the industry totally went to sleep," he said. "This is the first year in the revival - not just locally but nationally as well."
The mall at 2501 Mount Holly Road was also a retail riddle: perfectly situated, yet a drastic failure.
"In the last few years, we went after malls," Maksin said. "But Burlington Mall is a star in our portfolio. It's so bad and so great at the same time. . . . That's what attracted us - and the price was right."
The low purchase price was largely due to the mall's fallen value. The mall, which opened on Aug. 5, 1982, had an assessed value of $29.3 million in 1991. By 2006, it was $20.5 million. It is currently assessed at $13.5 million.
Kristi Howell, president and CEO of the Burlington County Regional Chamber of Commerce, listened as Maksin and his partners - developer Patrick G. Heller of Diamond Real Estate Investments L.L.C., of Limerick, Montgomery County, and Peter Hovnanian of J.S. Hovnanian & Sons - gave a presentation on March 13 outside the mall's JC Penney.
Heller had worked on redeveloping land adjacent to the mall with the Hovnanian family for years. Maksin said Heller and Peter Hovnanian approached him in 2012 as he was securing financing to buy the mall to form a partnership to resurrect it.
"He's a visionary," Howell said of Maksin. "He's done his homework. He knows what the numbers are."
Here are a few: The Burlington mall has a 55 percent vacancy rate. The average vacancy rate at malls in the top 80 U.S. markets is between 10.3 percent and 14.6 percent.
On the upside, last year 75,000 cars traveled I-295 per day, 81,000 traveled the New Jersey Turnpike, and 33,000 cars traveled Route 541. The average household income in 2013 was $82,833 within a three-mile radius of the mall.
"This game is all about numbers," said Maksin, who is also a CPA and tax lawyer and splits his time between Las Vegas and New York, where his law firm is based. "All the ingredients are there."