Average mall shop base rent per sf rose to $20.74 per sf, up 4.1% from third-quarter 2001. This is the 36th consecutive quarter Crown has experienced a rise in base rent per sf.
Base rent on new leases over the first nine months of this year averaged $23.23 per sf, an increase of 24%, compared with an average of $18.77 per sf for prior rents on the same space.
Comparable mall shop tenant sales per sf for the first nine months of 2002 at Crown's retail properties averaged $174.21, an increase of just 0.6%.
"Based on people counters in 22 of our malls, customer traffic through the first nine months continues to be much stronger than the National Retail Traffic Index," says chairman and chief executive officer Mark E. Pasquerilla in a statement.
Customer traffic at the Crown malls decreased just 0.2% compared with a 3.7% decline in the national index, he adds.
Pasquerilla predicts his company's mall shop occupancy will be between 87% and 88% by year-end. This is despite Phar-Mor and Ames bankruptcies and a Kmart store closing.
Crown is in final negotiations with Kohl's to replace a Kmart lease at the Phillipsburg Mall in Phillipsburg, NJ, that was rejected in September. Kohl's would open there in late 2003 or early 2004.
Phar-Mor drug units at South Mall in Allentown, PA and Schuylkill Mall in Frackville, PA began liquidation during third quarter. "We have temporary tenants lined up and prospects for permanent replacements with several big-box tenants," Pasquerilla says, "but have no permanent replacement leases executed at this time."
Crown's sole Ames store, which is in Washington Crown Center in Washington, PA, closed in October. Although its lease has not yet been formally rejected, Pasquerilla says, "we expect that to occur and have been working with two major potential replacement tenants."
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