Developer expresses eagerness to profit from Sears closings
Because they once drew scads of traffic to shopping centers, big department stores have historically paid minuscule rents. As a result, not all center-owners are mourning Sears’s Chapter 11 filing.
One such is Kimco, which looks forward to replacing 14 Sears and Kmart locations with tenants paying closer-to-market-price rents.
Kimco CEO Conor Flynn said that the Sears’s filing provides his company with a “long-awaited opportunity” to recapture boxes with significant rental potential in core markets.
“Given the highly favorable demographics of these locations, along with the continued demand for well-located, high-quality real estate, we expect to build on our past success in creating value by re-tenanting and redeveloping these below-market anchor spaces and activating underutilized parking fields,” Flynn said in a statement.
Kimco’s 14 leases for Sears and Kmart stores carry an average base rent of $5.25 per sq. ft., compared with a portfolio average of $15.95. The company intends to command much higher rents from these locations considering that they serve, on average, three-mile-radius populations of 129,000 with average household incomes of $88,000.
Bridgehampton Commons in Bridgehampton, New York, is one such center. It serves the affluent Hamptons community with an average household incomes of more than $193,000.
In recapturing eight Sears and Kmart stores since 2015, Kimco achieved and average rent spreads of 211% to the plus side.
At The Boulevard in Staten Island, a redevelopment set to open in 2020, Kimco replaced a Kmart with tenants including Alamo Drafthouse, Ulta, LA Fitness, and ShopRite to achieve a rent spread of 748%.
Connect with me on LinkedIn | Follow me on Twitter
One such is Kimco, which looks forward to replacing 14 Sears and Kmart locations with tenants paying closer-to-market-price rents.
Kimco CEO Conor Flynn said that the Sears’s filing provides his company with a “long-awaited opportunity” to recapture boxes with significant rental potential in core markets.
“Given the highly favorable demographics of these locations, along with the continued demand for well-located, high-quality real estate, we expect to build on our past success in creating value by re-tenanting and redeveloping these below-market anchor spaces and activating underutilized parking fields,” Flynn said in a statement.
Kimco’s 14 leases for Sears and Kmart stores carry an average base rent of $5.25 per sq. ft., compared with a portfolio average of $15.95. The company intends to command much higher rents from these locations considering that they serve, on average, three-mile-radius populations of 129,000 with average household incomes of $88,000.
Bridgehampton Commons in Bridgehampton, New York, is one such center. It serves the affluent Hamptons community with an average household incomes of more than $193,000.
In recapturing eight Sears and Kmart stores since 2015, Kimco achieved and average rent spreads of 211% to the plus side.
At The Boulevard in Staten Island, a redevelopment set to open in 2020, Kimco replaced a Kmart with tenants including Alamo Drafthouse, Ulta, LA Fitness, and ShopRite to achieve a rent spread of 748%.
Connect with me on LinkedIn | Follow me on Twitter