Not even a hurricane named Sandy could erode the economic upsurge experienced by the northeastern United States over the last year. What this region rebuilt after the Great Recession has managed to stay strong even in the face of Sandy’s 80-mph winds, record flooding and the damage inflicted by its nor’easter sister that arrived just days after the fall 2012 hurricane.
Most developers in the region agree that the urban areas carry the most attraction for retailers, with the New York City metro — as expected — leading the way.
“Brooklyn is incredibly hot; there’s just no other way to say it,” said Kathryn Welch, senior VP retail for New York City-based Forest City Ratner Cos., a subsidiary of Cleveland-based Forest City Enterprises. “In the last few years, the borough has emerged into the national and even global spotlight as a destination for sophisticated, trend-setting urban life.”
Forest City Ratner is capitalizing on the hip and diverse borough of Brooklyn with its Atlantic Terminal property, a 370,000-sq.-ft. vertical mall built atop the bustling transportation hub at the center of Brooklyn. Forest City Ratner opened Atlantic Terminal in 2004 with Target as its anchor, and many of the center’s tenants have seen best-of-chain sales volumes ever since.
This fall, Forest City Ratner opened the Barclays Center sports arena, home to the NBA’s Brooklyn Nets and also the first building at Atlantic Yards, a $4.9 billion mixed-use destination that will include 6,400 residential units and 250,000 sq. ft. of retail.
“Atlantic Terminal is at the heart of Brooklyn,” Welch said. “This is the borough’s single best retail location, and national retailers who want to establish or cement their presence in the market are looking to plant their flags at the intersection of Atlantic and Flatbush Avenues.”
Atlantic Terminal and Barclays Center, though weighty, are not the sum total of Forest City’s presence in the Northeast. The company operates about 8.6 million sq. ft. of retail divided among Pennsylvania, New York and New Jersey. It made headlines in 2011 with its opening of Westchester’s Ridge Hill in Yonkers, N.Y. — the 1.3 million-sq.-ft. outdoor regional center features new anchor Legoland Discovery Center joining Lord & Taylor, Apple, Whole Foods and L.L. Bean.
Another northeastern mega-market to continue to flex its retail muscle is Philadelphia, whose regional malls and entertainment/dining-heavy offerings draw consumers by the droves. Behind many of the area’s most successful developments is PREIT (Pennsylvania Real Estate Investment Trust), based in Philly but owning more than 23 million sq. ft. of properties in Pennsylvania, Massachusetts, New Jersey and New York.
“PREIT is focused on a dining and entertainment strategy to enhance the shopping experience at a number of our properties. A strong, vibrant restaurant drives foot traffic, draws new customers, extends the length of shopping trips and increases consumer spending,” said Joseph F. Coradino, CEO. “Dining establishments are a great complement to our shopping centers, and we look > forward to more additions throughout our portfolio in the future.”
Grand Lux Café opened at PREIT’s Cherry Hill (N.J.) Mall, enhancing an already impressive list of dining offerings, including The Capital Grille, Bobby’s Burger Palace by Chef Bobby Flay, Seasons 52, Maggiano’s Little Italy, California Pizza Kitchen and Bahama Breeze.
At Moorestown (N.J.) Mall, a transformation from a traditional mall to a fine-dining, entertainment and retail destination is under way. Regal Premium Experience will open a 56,000-sq.-ft., 12-screen theater in 2013, and the redevelopment of the exterior façade of the mall includes a lineup for several restaurants, which can be viewed from the street. The first restaurant, Osteria by Marc Vetri, is set to open in 2013.
And PREIT’s vision for its Voorhees (N.J.) Town Center is to bring together a blend of national retailers with the best of regional and local restaurateurs, merchants and businesses so that it is truly a community where people can shop, dine, play and live. On the Boulevard, Catelli Duo Restaurant opened this fall and Rodizio Grill Restaurant is scheduled to open in December 2012. Iron Hill Brewery & Restaurant, Elena Wu and Burger 21 are scheduled to open in 2013. The addition of restaurants is another step in PREIT’s innovative mixed-use redevelopment of a former enclosed regional mall — and proof that malls are indeed alive and well.
“The mall sector continues to experience moderate improvement, as higher-end portfolios outpace the market in terms of rental rate growth and occupancy,” Coradino said. “Retailers will compete for better centers in terms of concessions and payment.”
And with this year drawing to a close, a look back — at least from PREIT’s vantage point — is a positive one.
“Overall, we would categorize year-to-date 2012 as a further recovery with an optimistic view toward year-end and a healthier retail sector in 2013,” Coradino said.