"We're at the tipping point in the transition of our portfolio," said Joseph Coradino, EVP, during a conference call. Of the eight properties at which redevelopment was completed in 2006, he said NOI was already up 3.2%, sales per sf averaged $373 per sf, which is above the portfolio's overall average of $354 per sf, and in-line occupancy at those centers is at 92%.
On the day of the release of fourth-quarter and full-year financials, Ron Rubin, chairman and CEO, announced that redevelopment construction was underway at three additional properties: Cherry Hill (NJ) Mall, Voorhees (NJ) Town Center, and Plymouth Meeting (PA) Mall. "This represents an important milestone in the execution of our plans to raise the quality of our portfolio," he said.
Cherry Hill currently generates $477 sales per sf, according to Coradino. The redevelopment will add a two-story, 140,000-sf Nordstrom, freestanding buildings for Crate & Barrel and The Container Store, and add a 120,000-sf expansion of specialty stores and a Bistro Row.
Plymouth Meeting will gain a 200,000-sf, open-air addition, anchored by a 70,000-sf Whole Foods Market and several new restaurants.
Demolition of a vacant former Sears is underway at Voorhees Town Center. This property is being transformed into a mixed-use center that will include 425 residential units along with a new specialty foods market and 130,000 sf of street retail stores. The retail component is expected to reach completion in time for holiday 2007, and the residential portion will open in 2008.
This year, the locally based REIT will invest up to $250 million on mall redevelopment and approximately $100 million on ground-up development.
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