However, the company's strategy involves a redevelopment plan that takes at least three years. And in Year One, Feldman Mall Properties is talking with several restaurant chains that may play a part in reversing Stratford Square's fortunes.
A $20-million renovation will include sit-down restaurants near mall entrances, renovated restrooms, soft seating and play areas. "We're not trying to go for the Morton's," Feldman says during his company's recent earnings conference call. "We're trying to go for a price point above the middle, that will add to the cache of the mall, and the reach of the mall." The 10-mile trade area has a population of 860,000 and average household income of $87,000.
Great Neck, NY-based Feldman Mall Properties paid $93.1 million in January for the 500,000 sf of non-anchor retail space at the shopping center at Army Trail Road and Gary Avenue, its largest investment of the four it has closed this year. The "cornerstone" of the redevelopment will be a Regal Theater operation, says chairman and chief executive officer Larry Feldman.
Although the company has acquired four malls already this year, it is sticking to its redevelopment strategy, Feldman says, rather than be long-term owners and operators. After converting malls like Stratford Square to class-A assets, Feldman Mall Properties will likely sell it outright of contribute it to a joint venture, he adds. "Generally, all three phases combined take three to five years from start to finish," Feldman says.
Chief financial officer Thomas Wirth says the company has sufficient capital to finance redevelopments this year but will need to tap additional sources in 2006. Those could include taking on joint venture partners or opening lines of credit, he adds.
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