Circle Centre gets boost to bottom line for first time since before pandemic

Circle Centre Mall opened in 1995 and covers two full city blocks.

The ownership group behind Circle Centre Mall in 2022 saw its profit rise for the first time in four years, ahead of what’s expected to be an expansive revamp of the property in coming years.

The 28-year-old mall realized a profit of $4.29 million last year—nearly doubling its 2021 income figure of about $2.22 million, according to a report on the property’s operations filed with the city of Indianapolis.

The increase is the first since 2018, when Circle Centre had a profit of $13 million. The mall’s revenue largely comes from its tenants.

The struggling mall in the core of downtown Indianapolis has been managed by Chicago-based JLL since April 2021. The firm reduced operating expenses by nearly 9% year-over-year, the report from mall owner Circle Centre Development Co. said.

CCDC is a conglomeration of companies—originally 20—that contributed $75 million toward the mall’s $320 million original development cost in the early 1990s. It owns much of the 1 million-square-foot mall complex, while the city owns the property on which it is built.

In a letter to the city accompanying its results, CCDC said it is “proud to be a catalyst of the downtown Indianapolis economy and continues to be an active partner with several initiatives and projects focused on the customer experience and meeting consumer demand.”

Last year, CCDC committed to a “transformative” redevelopment of the mall, with design efforts now underway. A timeline for the redevelopment has not yet been made public.

The mall’s occupancy has waned significantly in recent years, dropping from 89.9% in 2019 to 60.7% at the end of 2022. In 2020 and 2021, its occupancy was 70.4% and 64.3%, respectively.

Not including the 144,000-square-foot former space for anchor tenant Carson Pirie Scott—which has been vacant since 2018—occupancy at the mall was 76.3% at the end of last year. That anchor tenant space was used multiple times throughout 2022, including for a private event tied to the College Football Playoff National Championship.

Of the mall’s nearly 457,000 square feet of non-anchor leasable space, 323,144 square feet was occupied in 2022, a drop of 6.6% from the year prior.

The number of stores at the mall—which in addition to retail refers to restaurants, in-house operators and other tenants—was 69 at in 2022, a drop of 34% from the 105 stores open in 2021. Circle Centre had 97 stores in 2019.

Seven tenants opened their doors at the mall in 2022, including co-working company CoHatch, retailer Daily Thread and restaurant Sugar Factory.

Total revenue for the mall was about $16.8 million, an uptick of about 15% from $14.6 million in 2021. However, the mall’s revenue is still well short of pre-pandemic levels. It reported $22 million in revenue at the end of 2019.

“While not without challenges in the current environment, the property’s 2022 operating results demonstrate its resiliency in driving value for all stakeholders,” CCDC said in its report to the city.

Circle Centre paid nearly $9.17 million to government entities through taxes and garage revenue in 2022, including $1.45 million in property tax, $4.73 million in sales tax and $1.04 million in food and beverage tax. It also paid $1.9 million in revenue to the city from operations of the garage at 121 W. Maryland St.

The mall is expected to bring in $39.5 million in revenue from non-cancelable lease payments through 2028, with another $9 million expected in the years thereafter.

Representatives for Circle Centre Development Co. declined through a spokesperson to answer specific questions about the report.

Adam Collins, an attorney for Indianapolis-based Wallack Somers & Haas who represents CCDC, commented via text: “This is a testament that Circle Centre’s location is incredibly desirable, because it sits at the intersection of downtown commerce.”