From an owner’s or manager’s perspective, the right remodel can go a long way toward trimming the cost of operating a shopping center.
And lowered operating expenses can drop much-needed dollars to both the center’s and its tenants’ bottom lines.
According to Matthew Harding, president and COO of Levin Management Corp., North Plainfield, N.J., strategically cutting costs through shopping center renovations is a growing trend.
“It’s more important now than ever before to lower operating costs,” Harding said. “We look at it from a maintenance and a renovation standpoint, as we work to address items before they become an issue, not after they do.”
For instance, Harding said, maintaining and repairing parking lots before they degrade is one way to ultimately reduce costs.
“Once parking lots degrade and major repairs have to be made, that is going to increase operating costs,” he explained.
Levin Management approaches each of its shopping center remodels with not just maintenance in mind, but by planning what overhauls will drive the most efficiencies down the pike.
“When we approach a remodel, we are addressing energy efficiency, such as looking at new and different parking lot lighting with longer-life bulbs that use less energy,” Harding said. “We are exploring solar options, particularly when roof remodels are part of the renovation program.”
When Levin Management remodels individual tenant spaces, it examines energy-efficient light options as well as more efficient HVAC equipment.
“Incorporating a strong energy management program as part of a remodel—whether that remodel be at the shopping center or the tenant space level, or both—is paramount to lower the ongoing cost of maintaining a facility,” Harding said.
For Bed Bath & Beyond’s Christmas Tree Shops division, which opened a new store in an existing Linens ‘N Things space at Levin’s Somerset Shopping Center in Bridgewater, N.J., Levin undertook a full remodel of the 28,750-sq.-ft. space.
“The renovation involved everything from HVAC to lighting to a renovated loading area to make the space more efficient and to give Christmas Tree Shops its exact prototype, which would allow it to operate as efficiently as possible,” Harding said.
The new Christmas Tree Shops store committed to the space in mid-2009, construction launched that fall, and the store opened on Jan. 29, 2010, joining existing tenants Barnes & Noble, Gap, Modell’s, Pier 1 Imports and Eastern Mountain Sports.
On an even larger scale, Levin is in the throes of a major remodel of Post Road Plaza in Pelham Manor, N.Y., in Westchester County. The company was faced with either razing or remodeling the center, and opted to remodel.
“We added lots of efficiencies,” Harding said, “from new insulation and HVAC to new parking lot lighting. The energy-efficient systems and programs help to keep our costs down and, subsequently, to lower the operating costs for tenants.”
Revamping parking lot lighting alone, Harding said, has shown to reduce energy costs by 15%.