The transaction, if it were to close as hoped for by the end of the year, would give Preit virtually full control over a three-block-long stretch of Market Street, one of Philadelphia's major downtown corridors, though officials remained circumspect about what they plan to do to the indoor mall that dates back to the 1970s.
Last week, Preit executives told investors during a corporate earnings call that they were in discussions with public officials "seeking concessions" to help underwrite as-yet undisclosed plans to reinvent the underperforming mall, which has long struggled to attract high-end retailers, rents and customers despite its splashy debut four decades ago.
The 9th and Market property being sold by Vornado houses a Kmart that anchors the Gallery. The discount retailer's lease, however, is due to expire in 2014, Preit chief executive officer Joseph F. Coradino said in an interview Monday.
The Preit CEO would not say what plans were being drawn up for the Kmart property, nor would he disclose how soon his company would reveal plans being hatched for the assemblage of contiguous properties it has worked fastidiously to bring into its portfolio over the past few years.
Coradino, however, noted that the company's thinking has been methodical, acquiring one portion of the Gallery in 2003, another in 2004, a building housing the former Strawbridge & Clothier department store in 2006, and now the behemoth that once housed a Clover store.
In essence," Coradino said, "you've got to look upon this as we've been putting together pieces of the puzzle."
Most of Preit's holdings consist of indoor shopping malls along the East Coast, with a concentration in Mid-Atlantic states, including Cherry Hill Mall, Willow Grove Park, Plymouth Meeting Mall and Exton Square Mall among nine in the region. But Coradino suggested that one view the company's latest acquisition through a broader lens.
"Forget about what we do," he said. "Think about controlling three blocks of real estate in the fifth largest city in the United States on the Number One street address - Market Street - between the [Pennsylvania] Convention Center, the [National] Constitution Center, Independence Hall."
Further, he added, the property sits atop the Market-Frankford El, one of the city's two only subway lines, which he said draws 19 million commuters each year.
In that context, Coradino said, the planned acquisition of 9th and Market is "an important piece of the future of the Gallery."
The Inquirer, Daily News and Philly.com are tenants of Preit's Strawbridge's building in the Gallery.
Contact Maria Panaritis at 215-854-2431 or mpanaritis@phillynews.com or @panmaritism on Twitter.
