Struggling Wyoming Valley Mall has new owner

WILKES-BARRE TWP. — The owner of more than 40 malls and shopping centers across the county has added the Wyoming Valley Mall to its portfolio.

Mike Kohan, founder and CEO of Kohan Retail Investment Group of Great Neck, New York, said he purchased the property for $17 million approximately three weeks ago.

The nearly 50-year-old mall has struggled financially with the loss of tenants, such as Sears and the Bon-Ton, and had changed hands when its former owner, unable to sell the property, turned it over to the mortgage holder, GS Mortgage Securities Trust, in 2019 in order to avoid foreclosure. At the time Pennsylvania Real Estate Trust owed $72.8 million on the loan.

“This is what I’ve done for the last 20 years,” Kohan said Friday on why he purchased the nearly 910,000-square-foot mall.

The nearest Kohan property is the Lycoming Mall in Pennsdale.

Kohan said he plans to bring in new tenants and create new events to boost customer traffic as he’s done at his other properties. When asked what type of events, Kohan replied he could not immediately say. “I have to get my hands around it,” he said.

The Wyoming Valley Mall has JCPenney and Macy’s stores as well as a number of chains such as American Eagle, Victoria’s Secret, Finish Line and Hot Topic.

With an approximate two-thirds occupancy rate, the property owned by GS Mortgage Securities Trust, did not receive a positive outlook from Fitch Ratings in May. The ratings agency said expected losses on the pool of loans that contained the Wyoming Valley Mall and a Michigan mall were contributing factors for labeling them as Fitch Loans of Concerns.

“The mall was closed due to the pandemic and re-opened in June 2020 with limited capacity and hours. According to servicer updates, the property manager and leasing agent are in discussions with several tenants regarding rent relief,” Fitch Ratings said.

Jones Lang LaSalle had been managing the mall since October 2019 and its efforts had a positive effect on the mall’s bottom line, according to an April 26 article in Urban Land Magazine.

“By the end of 2020, the team had restructured 20 national tenant leases, many of which were exercising their right to terminate. This critical deal restructuring saved 97,000+ square feet (9,000 square meters) of retail, removed co-tenancy rights, and reduced accounts receivable by $1 million,” the article said.