6.5.17: Redevelopment Strategies for Former Department Stores

With reports of department store closings now routine, particularly in mall locations, mall owners are actively redeveloping these spaces for alternative uses in strong markets.

CBL & Associates recently redeveloped a vacant Sears store at Fayette Mall in Lexington, Kentucky, into a total of 20 new inline retail tenants totaling 115,000 square feet (sf) of former Sears space, including a two-level 23,000 sf H&M as well as a Michael Kors and Brighton Collectibles. In addition to redeveloped retail space, two new mall entrances — one flanked by restaurants with outdoor dining — were added, featuring restaurants including The Cheesecake Factory. In a similar fashion, CBL subdivided a former 182,000-square-foot Sears store at the CoolSprings Galleria in Franklin, Tennessee, into smaller spaces that are now leased to American Girl, H&M and The Cheesecake Factory.

Simon Property tore down a Nordstrom and Saks Fifth Avenue at the Florida Mall in Orlando and replaced the building with a newly constructed Dick’s Sporting Goods and a crayon-based family attraction called the Crayola Experience. The area formerly occupied by Saks Fifth Avenue was carved into space for American Girl, H&M, Forever 21 and Zara.

Retail real estate trust PREIT had three Sears stores close in malls that it owns. PREIT has leased all of the nearly 400,000 sf of vacated space. CEO Joe Coradino said the tenants that are moving in, such as the Dick’s Sporting Goods and Field & Stream in Capital City Mall in Pennsylvania, will pay more in rent and drive more interest than Sears.

 

 

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This entry was posted in CMBS, CMBS Conduit Loans, Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit, Valuexpress and tagged , , , , , . Bookmark the permalink.

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