Renovation Nation
Ground-up developments are few and far between, but that doesn’t mean shopping center developers are sitting idle. Today’s focus is on maximizing asset performance—developers are analyzing existing centers and implementing tune-ups to turn underachievers into profit engines.
Renovations run the gamut from a freshening facelift to a full-scale demalling, but at the end of the day whatever it takes to return a shopping center to a desirable destination is what top developers are making their organizations’ priority.
Widen the net: Current customers are important, but to launch a successful shopping-center redevelopment project, it is every bit as important to understand the customer you are not getting, said Joseph Coradino, president of PREIT Services, Philadelphia.
“The goal for a redevelopment is to broaden the appeal and draw of a shopping center, so you can begin to attract a customer base that is not coming to the center,” said Coradino. You start by enhancing the shopping experience, he said, and not just with the merchandising, but also “by bringing an aesthetic appeal to the property that is more aligned with what the customer wants today.”
A center’s architecture, amenities, community components such as gathering areas, the restaurant lineup, as well as a tenant merchandising plan designed for customer convenience are “all part of the formula to enhance the customer shopping experience,” said Coradino.
Cherry Hill Mall, a PREIT property in Cherry Hill, N.J., is a 1 million-plus-sq.-ft. mall in southern New Jersey that boasts the highest gross volume in the region. Opened in 1961, the mall has been in the throes of a $220-million redevelopment that has added Nordstrom to an already noteworthy department store lineup that features the No. 1 Macy’s in the region.
“There really are three pieces to this redevelopment that were crucial,” Coradino said. “First was introducing the first-class dining experience with Maggiano’s Little Italy, Capital Grille, Seasons 52, California Pizza Kitchen—all with outdoor seating.” In addition, PREIT created a compelling physical environment at the mall and, just as important, “We brought in first-to-market retailers, of which the best example is Nordstrom, which set the tone for the shopping center and allowed us to attract any number of retailers,” Coradino said.
To date, 20 first-to-market retailers have joined the Cherry Hill Mall tenant list, including Crate & Barrel and Urban Outfitters.
Breaking the ceiling: In its multi-million-dollar remodel of South Hill Mall in Puyallup, Wash., owner The Cafaro Co. defied convention by hosting a ceiling-breaking event to kick off the project last March, rather than celebrating with a traditional ground-breaking ceremony.
There was some logistical rationale behind the move, in that new ceiling treatments will be incorporated into the renovation of the 1,041,428-sq.-ft. enclosed regional mall. But the symbolic nature of the unorthodox demolition start can’t be ignored.
“At a time when many real estate developers are delaying—or abandoning altogether—projects for lack of financing, we are able to forge ahead,” said Don DeSalvo, Cafaro northwest partner. The 60-year-old, Youngstown, Ohio-based company is using its own capital to fund the massive project, which will include—besides new ceilings—flooring treatments, skylighting and an improved interior lighting plan, a natural stone-finished exterior and new entrance features, contemporary signage with a new mall logo, soft-seating areas with televisions and Internet access that Cafaro is calling “relaxation stations” and a new food court design that centers around an oversized stone fireplace.
On the other side of the mall, an eclectic mix of dining and entertainment destinations include P.F. Chang’s China Bistro, California Pizza Kitchen, Redstone American Grill and Dave & Busters. The restaurants are connected by a new landscaped plaza, which mimics the feel of the retail plaza area. One special feature of the new restaurants is the addition of outside seating venues set within lush landscaping, which provide a relaxed atmosphere to enjoy time with family, friends and co-workers. The restaurant plaza is located within a few feet of the mall’s entrance.
To accommodate the traffic demands of the new restaurants and Dave & Busters, valet parking has been added during peak weekend hours. Security personnel cover the area in energy-efficient electric T-3 carts, providing added visibility.
Anchored by Macy’s, Target, J.C. Penney, Sears and Regal Cinemas, the mall complex has been a fixture in the Puyallup/Tacoma area for 20 years, and while it was still popular, it had become outdated. Its newly modernized look will be achieved at night so that current tenants can conduct business as usual during the construction. Slated for a November 2009 unveiling, South Hill Mall is expected to do a brisk holiday business.
“A renovation of this type does so much for not only the tenants and the mall’s customers, but for the municipality itself,” said DeSalvo.