Retailers absorbed nearly 76 million sq. ft. of vacant space last year, according to a recent JLL report—the highest total in five years.
If that figure is accurate, then one Syracuse, N.Y.-based mall operator accounted for 10% of that filled space. Spinoso Real Estate Group has reported that it executed more than 2,500 leases across its 41-property portfolio in 2022 that added up to 7.7 million sq. ft. of space.
That’s the equivalent of nine super-regional malls, anchors and all.
“It was a record-breaking leasing year for us, an 88% year-over-year increase and double the amount of square footage we leased in 2021,” said Spinoso’s executive VP of leasing Michael Nevins. “We expect this momentum to continue into 2023.”
Nevins’s expectations are grounded on solid footings. Last week, Spinoso announced the designation of two new third-party-management assignments from million-sq.-ft. regional malls: White Marsh Mall in Baltimore and North County Mall in Escondido, Calif. And CEO Carmen Spinoso reported that the company has deals in the works to acquire other malls. It currently owns about 10% of the malls it operates.
Today, retail real estate developers focus on properties in the “Big Smile” Sunbelt states like Florida, Texas, Arizona, and Southern California, where population density is swelling. But Spinoso operates on a philosophy that a mall in a good location anywhere in the country can succeed if it is tenanted and run properly. It operates malls in Fairfield, Calif.; Fort Wayne, Ind.; Greendale, Wis.; Sterling Heights, Mich., and Manchester, Conn.
“We got a call from a private equity investor that owned a mall in Gadsden, Alabama, about 50 miles north of Birmingham. It had Belk, JCPenney, and Sears, and two of the three department store anchors were closing,” Spinoso said. “We started scouting the market and found a department store chain called Martins Family Clothing that had eight locations in the state. None of them were in malls, so we asked them to do a mall experiment by opening a closeout store in the vacant JCPenney during the holidays. They did really well and they ultimately signed a long-term lease with us for a new department store to replace JCPenney.”
The Spinoso leasing team then found a trampoline park operating in a building that had once been a factory. The proprietor owned the building and didn’t want to move, but said that his daughter was interested in opening an entertainment concept.
“We put her in touch with Brunswick and they helped her create her own concept called The Alley,” Spinoso said. “We leased her 35,000 sq. ft. of space in a portion of the former of the Sears box, where we also put several restaurants and a Food City grocery store that will open soon in over 50,000 sq. ft.”
Spinoso said that owners and operators of well-located malls often fail to take advantage of the ingrained local market knowledge and enthusiasm of the management staffs inside their properties. His company runs portfolio-wide general manager meetings in Syracuse where they do team-building exercises, share information and experiences, set goals, and interact with the corporate team.
“These people are very passionate about their properties and possess great local knowledge, but are often not empowered,” Spinoso observed. “We put our belief in them. We even involve them in our leasing meetings, and it’s often amazing what that leads to.”
Earlier this year, Spinoso won new third-party management assignments at Towne Mall in Elizabethtown, Ky., and The Mall at Turtle Creek in Jonesboro, Ark.