New tenants in former Macy’s space generate 19x the rent for mall owner
Wishful thinking. That’s what many in the retail industry say when mall owners profess to be glad to lose department store anchors so that they could fill the space with higher-rent tenants.
One of those developer CEOs, Joe Coradino of PREIT, reported that wishes do come true.
In a release noting the signing of Planet Fitness to a 23,000-sq.-ft. space at Moorestown Mall in New Jersey, PREIT said that new tenants in the former Macy’s space there are paying rents adding up to 19 times what Macy’s paid. Those new renters include HomeSense, Sierra, Five Below, and Michaels.
Department store anchors such as Macy’s and JC Penney typically paid well below market rents—if they didn’t own their real estate outright—in return for their role as traffic-builders.
Meanwhile, fitness tenants once shunned by mall owners due to their need for added parking space are welcomed with open arms. PREIT reports that square footage of space leased to fitness centers has tripled portfolio-wide since 2008.
Other new tenants such as Harvest Seasonal Grill, YardHouse, and Regal Cinema contributed to a 5.7% rise in traffic at Moorestown in the first six months of 2019, compared to the previous year period.
“We want to provide local consumers with more reasons to choose the mall as their go-to destination for activities that suit their lifestyle,” Coradino said.
Congrats Joe and PREIT Team.