PHILADELPHIA, PA—PREIT says the impending closing of three Macy's stores in its mall portfolio (Moorestown, NJ; Plymouth Meeting, PA; and Valley View Mall, LaCrosse, WI) have given the real estate investment trust an opportunity to reposition the store real estate quickly, taking advantage of marketplace changes affecting the mall properties.
Macy's announced earlier this week that it would close 68 stores over the next several months including four in Pennsylvania and New Jersey. Two of the closing stores in New Jersey and Pennsylvania are at PREIT-owned malls, one is at the Namdar Realty Group's Voorhees Town Center, formerly the Echelon Mall, in Voorhees Township, NJ, and one is at the Neshaminy Mall, in Bensalem, PA, owned by Chicago-based General Growth Properties.
Kevin Berry, senior vice president of investor and public relations at General Growth Properties, tells GlobeSt.com that GGP “doesn't have an official comment on the news from Macy's.”
Namdar Realty did not respond immediately to a request for comment from GlobeSt.com.
Department stores like Macy's are being challenged by the growth of e-commerce options. Morningstar equity analyst Bridget Weishaar wrote in an August research piece that “strategic store closures are necessary to align the historic store base with modern day e-commerce trends.” Macy's, she wrote, “is in a sector experiencing secular decline. In our opinion, department stores will continue to be forced to compete on price with newer e-commerce entrants and an oversaturated competitive environment.”
“Demand for the Macy's spaces is robust with new opportunities situated in desirable locations in quality, high barrier-to-entry markets,” says PREIT CEO Joseph F. Coradino. “We are in the process of finalizing transactions to control the real estate in two of the three locations and are negotiating terms on the third. At Valley View Mall, we are in advanced discussions with a traditional department store and for Moorestown and Plymouth Meeting Malls, we are negotiating LOIs for replacement stores and anticipate making detailed announcements in the near future.”
Moorestown Mall has undergone a dramatic transformation over the past few years generating strong results, including an increase in traffic of over 10% during the 2016 holiday shopping season, says PREIT. The mall has recently welcomed new H&M and Rue 21 stores, regionally renowned Catelli Duo restaurant and new prototype Victoria's Secret and Bath & Body Works stores.
Plymouth Meeting Mall, northwest of Philadelphia market, features a Whole Foods and has become a dining, entertainment and lifestyle destination. PREIT describes the Macy's closing here as “an opportunity to replace an underperforming department store with more exciting destination tenants.” The mall's trade area is expected to expand with the addition of the country's ninth LEGOLAND Discovery Center this Spring.
Valley View Mall in LaCrosse, WI, is a market-dominant property that draws from a 50 mile trade area, boasts a strong lineup of national tenants, has historically strong occupancy levels and sales of approximately $400 per square foot as of September 30, 2016, PREIT says.
“We are particularly pleased that the announced Macy's closings at competitive malls in Massachusetts, Virginia and Greater Philadelphia will serve to further strengthen our premier assets with existing Macy's stores located in these markets including: Cherry Hill Mall, Willow Grove Park, Springfield Town Center and Dartmouth Mall,” says Coradino. “To summarize, replacing these Macy's stores is an opportunity to dramatically improve sales, traffic, NOI and earnings.”
PHILADELPHIA, PA—PREIT says the impending closing of three Macy's stores in its mall portfolio (Moorestown, NJ; Plymouth Meeting, PA; and Valley View Mall, LaCrosse, WI) have given the real estate investment trust an opportunity to reposition the store real estate quickly, taking advantage of marketplace changes affecting the mall properties.
Macy's announced earlier this week that it would close 68 stores over the next several months including four in Pennsylvania and New Jersey. Two of the closing stores in New Jersey and Pennsylvania are at PREIT-owned malls, one is at the Namdar Realty Group's Voorhees Town Center, formerly the Echelon Mall, in Voorhees Township, NJ, and one is at the Neshaminy Mall, in Bensalem, PA, owned by Chicago-based
Kevin Berry, senior vice president of investor and public relations at
Namdar Realty did not respond immediately to a request for comment from GlobeSt.com.
Department stores like Macy's are being challenged by the growth of e-commerce options. Morningstar equity analyst Bridget Weishaar wrote in an August research piece that “strategic store closures are necessary to align the historic store base with modern day e-commerce trends.” Macy's, she wrote, “is in a sector experiencing secular decline. In our opinion, department stores will continue to be forced to compete on price with newer e-commerce entrants and an oversaturated competitive environment.”
“Demand for the Macy's spaces is robust with new opportunities situated in desirable locations in quality, high barrier-to-entry markets,” says PREIT CEO Joseph F. Coradino. “We are in the process of finalizing transactions to control the real estate in two of the three locations and are negotiating terms on the third. At Valley View Mall, we are in advanced discussions with a traditional department store and for Moorestown and Plymouth Meeting Malls, we are negotiating LOIs for replacement stores and anticipate making detailed announcements in the near future.”
Moorestown Mall has undergone a dramatic transformation over the past few years generating strong results, including an increase in traffic of over 10% during the 2016 holiday shopping season, says PREIT. The mall has recently welcomed new H&M and Rue 21 stores, regionally renowned Catelli Duo restaurant and new prototype Victoria's Secret and Bath & Body Works stores.
Plymouth Meeting Mall, northwest of Philadelphia market, features a Whole Foods and has become a dining, entertainment and lifestyle destination. PREIT describes the Macy's closing here as “an opportunity to replace an underperforming department store with more exciting destination tenants.” The mall's trade area is expected to expand with the addition of the country's ninth LEGOLAND Discovery Center this Spring.
Valley View Mall in LaCrosse, WI, is a market-dominant property that draws from a 50 mile trade area, boasts a strong lineup of national tenants, has historically strong occupancy levels and sales of approximately $400 per square foot as of September 30, 2016, PREIT says.
“We are particularly pleased that the announced Macy's closings at competitive malls in
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