Pier Shops at Caesars in Atlantic City for sale

If Atlantic City hasn’t taken enough hits, the Pier Shops at Caesars is up for sale, but reportedly at a steep discount.

The 290,210-square-foot retail strip that boasts high-end retailers such as Gucci, Louis Vuitton, Burberry, Michael Kors as tenants and famous restaurants such as Buddakan and Continental as dining spots has seen sales slip as patronage to Atlantic City casinos has been on the decline.

The mini mall at 1 Atlantic Ocean Ave. is attached via skybridge to Caesars Atlantic City Hotel and has direct access off the boardwalk. It was constructed in 2004 but then redeveloped in 2006 by Taubman Centers Inc. on a 900-foot long pier and, at the time, built under the theory that high-end casinos have a captured audience of high-end shoppers who will use the same impulse of gambling to splurge on a Louis Vuitton bag. It was then appraised at $187.5 million but has seen that dwindle, according to some reports.

By 2010, Taubman relinquished the property and remains in the hands of a special servicer overseeing a $135 million mortgage on the property. In August 2012, the investors who ended up buying the commercial mortgaged back securities loan on the property decided to put the property up for auction. It got a $25.1 million bid that the special servicer declined to accept, according to published reports.

An $80.5 million loan remains outstanding on the property, according to Trepp, a research firm that tracks CMBS loans. The property had been appraised at $11 million but then cut by about half that amount, according to most Trepp data. The center is roughly 52 percent leased.

Torchlight Loan Services is now the special servicer. In notes Torchlight made on the loan, it indicated the property is suffering from a decline in gaming brought on by competition that has resulted in lower pedestrian traffic as well as the lingering effect of Hurricane Sandy. Any effort to stabilize the property would cost “in the tens of million dollars,” the report said.

Aside from the shops, there is 15,900 square feet of event space located on the fourth floor that is used for special occasions.

The property is being marketed for sale on a national basis by Peter Stevens of CBRE Inc. While it has some issues, the center is in a high-profile location and the “construction of the pier is off the charts,” Stevens said. “The views...I would match them up against any view in the country.”

The highest and best use for the property remains retail, he said.

“This needs an infusion of energy,” Stevens said. “It needs a retailer with a plan and one who can execute on that.”

The is no listing price for the property.

Source: Philadelphia Business Journal