A year after purchasing the distressed Chapel Hills Mall, owners are refinancing the property and selling off outparcels like the Jimmy John’s and Olive Garden properties.

Garrison Investment Group bought the 1.2 million-square-foot shopping center, built on the north end of town in 1982, for $71.4 million. The owner refinanced for $43.3 million earlier this month.

“The reason we refinanced the mall is to take advantage of the lower interest rates in today’s market,” said Jeanne Jordan, senior vice president and director of marketing for Urban Retail Properties, which manages the mall for the owner. “This frees up capital to be reinvested in this asset, providing additional funds for future plans.”

She said it’s too early to make any announcements about plans, but that Urban hopes to be able to make an announcement later this year “regarding various plans that are currently being analyzed.”

California-based Realty Investments purchased the adjacent Olive Garden restaurant property, 7815 N. Academy Blvd., for a little more than $1 million in March.

Other outparcels are listed for sale, including 1540 Briargate Blvd., where Jiffy Lube is located; 1465 Jamboree Drive, where Sonic is located; and 1590 Briargate Blvd., site of Jimmy Johns.

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“Ownership is concentrating their efforts on the mall itself,” Jordan said. “The sale of these outparcels strategically provides funds for future enhancements for the property.”

The mall’s vacant and underperforming outparcels, including an empty Pizza Hut building, an operating car wash and self-storage facility, are not listed for sale.

Garrison does not own the empty Taco Bell structure or the operating U.S. Bank branch on the mall property.

Garrison is a New York-based investment firm that buys loans and distressed properties. It has other mall holdings.

Garrison purchased the former K-Mart store, a vacant space on the southeast side of the mall on Feb. 6.

“The purchase was a strategic decision where ownership wanted to control a vacant large space that was providing no benefit to the mall,” Jordan said. “We are actively pursuing larger users to occupy this building that will ultimately revitalize that end of the mall.”

She added the redevelopment efforts will likely be concentrated on the east end of the mall and would include reconfiguring existing space.

If the ownership is planning to take on a major remodeling effort, it would be in keeping with mall trends across the country, said Jesse Tron, spokesman for the International Council of Shopping Centers.

“There’s not a lot of new development in the industry,” he said. “So, when there is additional capital, most owners are reinvesting it in current assets.”

He said remodeling projects run the gamut from simple aesthetic upgrades to major overhauls. If a property is in a market with competition, it’s more likely to get a bigger upgrade.

Developers have announced several new retail centers in the area, including Nor’wood Development Group’s Interquest Marketplace near Interquest Parkway and Interstate 25. Gary Erickson’s Northgate Properties has proposed a major retail development to begin with Bass Pro Shops southeast of Northgate Boulevard and I-25.

“If there are new properties, they’re going to want to remodel to stay competitive,” Tron said.

Chapel Hills Mall outparcels

For sale
1465 Jamboree Drive Sonic restaurant $900,000
1540 Briargate Blvd. Jiffy Lube $1.05 million
1590 Briargate Blvd. Jimmy Johns $650,000
7815 N. Academy Blvd. Olive Garden $1.02 million
1560 Briargate Blvd. Former Pizza Hut Vacant
1820 Briargate Blvd.Briargate Car Wash Operating
1825 Jamboree Drive Self Storage at Chapel Hills Operating