Shopping Center Business

MAY 2015

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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278 • SHOPPING CENTER BUSINESS • MAY 2015 tunity for us to create value. It is a com- pelling opportunity to have that internal growth." ProPerty By ProPerty With its existing portfolio, Brixmor is also at a unique advantage: it is the sole owner of 519 of its 520 centers. (One center, a grocery-anchored property near Las Vegas, is held in a joint venture.) That freedom means that decisions can be made quickly, and that decisions are not driven by capital or institutional partners. "Decisions are based on operations at the properties," says Carroll. "We want the properties to drive revenue." With 520 centers, it is an undertaking to evaluate every property in Brixmor's portfolio. In January 2014, the company realized — as it saw no new development on the horizon for the next five years — that great infill retail space would be at a premium in the coming years. With its corporate and regional operating teams, Brixmor spent about eight months analyz- ing every property in the portfolio to see what opportunities the company could capitalize on in the next five years. "Out of that came a focus of approxi- mately 170 properties we identified where we can perfect our merchandising mix, create new or expanded anchor spaces and create more space," says Carroll. Raising the Bar is allowing Brixmor to create new opportunities for retailers. At Naples Plaza in Naples, Florida, for example, the company razed a 50-year- old Publix store and replaced it with a new prototype store. That property saw an estimated $24 million in incremental sales. For Brixmor, that drove interest in leasing at Naples Plaza. A 40,000-square- foot PGA Superstore was added to the center, while an Office Depot was downsized from 28,000 square feet to 20,000 square feet. Marshalls renewed its lease for 37,000 square feet and a new 14,000-square-foot West Marine was added, as was a 6,000-square-foot spa and a new Chipotle. "Events like that create a heightened sense of opportunity among other retail- ers in the market," says Carroll. "Retail- ers see a nice, new environment that they have the opportunity to enter with a cur- rent prototype." At University Commons in Greenville, North Carolina, the company took a cen- ter that had been anchored by Circuit City and Kroger and, in effect, created a new center anchored by Harris Teeter, with junior anchors Five Below, Sleepy's, Kirk- land's and Petco. "This is a complete remerchandising of material pieces of the center," says Car- roll. "Changing the anchor is a catalyst for the rest of the center to rise. It has been a good example of helping our investors understand how we are creating value." With retail stores looking for stronger locations while operating smaller formats, Brixmor has targeted a number of large format stores in its portfolio that it feels are underperforming. In Virginia Beach, Virginia, a market with no new space and lots of pent up retail demand, the com- pany transformed an underperforming 60,000-square-foot furniture store into several spaces. Brixmor leased spaces to Trader Joe's, PetSmart and Five Below. Today, Trader Joe's is performing at an estimated $1,500 per square foot in 20 percent of the former furniture store space. Raising the Bar is intended to achieve a lot of growth through leasing, but Brix- mor realizes some additional build-out and redevelopment may be required as it transforms older spaces into new ones. In Baltimore, the company razed about 75 percent of a center to build a new Walmart Supercenter at its Liberty Plaza. While that case was extreme, Carroll says Brixmor is not afraid to remove old space to create new. "You are more likely to see us rebuild 20 percent of the middle of a center, or add 20 percent to the end of a center," he says. "We like reconfiguring centers and adding retail density to our proper- ties. That helps us take advantage of the lack of supply of retail space and a new Brixmor's 223,000-square-foot Sunshine Square shopping center in Medford, New York, is anchored by Super Stop & Shop. Cross Keys Commons in Turnersville, New Jersey, is 216,400 square feet and anchored by Walmart Supercenter, Ross Dress For Less, Marshalls and Party City.

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