Shopping Center Business

MAY 2015

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

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314 • SHOPPING CENTER BUSINESS • MAY 2015 Randall Shearin With a number of redevelopment projects underway, Moonbeam Capital Investments has carved a space as a buyer of 'broken' assets. Moonbeam Shines Bright M oonbeam Capital Investments has quickly created a niche for itself in the shopping center business. The company has spent more than $200 million on properties in the last five years. Based in Las Vegas, Moon- beam has quickly become a major player, ranking eighth among the top 10 retail real estate buyers in the last five years, accord- ing to Real Capital Analytics. Most of those acquisitions have been re- gional malls where Moonbeam has plans to do major redevelopments. It was one of the first companies to acquire 'broken' regional malls in good locations and plan them for the future. Moonbeam uses pri- vate money that is patient; since most of the centers Moonbeam acquired are non- performing, it has taken its time in study- ing each center to determine the future use. For some properties, the company realizes, it may take several years to come up with an adequate solution for each cen- ter since the retail industry — and other sectors of the U.S. economy — are rapidly changing. The company's current plans mostly involve redevelopment of some or all of the mall spaces. The changing face of retail has caused Moonbeam to alter its plans from time to time, as it wants to respond to the ever changing needs of retailers and consumers. "We are learning as we do these re- developments," says Steven Maksin, the company's CEO. "The optimal utiliza- tion of these underperforming malls is to bring some additional uses to them, such as residential, hospitality, office and entertainment." One of its first acquisitions was Burl- ington Center Mall in Burlington, New Jersey. The company acquired the center in 2012, and has plans to convert it into a 1.3 million-square-foot mixed-use center. "We have put a lot of time and research into what Burlington Center Mall would become," says Shawl Pryor, senior vice president of Moonbeam. "We are not going to develop mixed-use in the sense that you will have a live-work-play environ- ment, but more of an environment where you have a work environment coupled with the property's primary use, retail." To accomplish that, Moonbeam wants to add a low-rise office product in the property, accumulating between 300,000 square feet to 600,000 square feet of of- fice space. One company has already ex- pressed interest in building a build-to-suit office property at the site, which would bring more than 1,000 employees to the center on weekdays, providing an addi- tional shopping base. The demographics around Burlington Center Mall are extremely established and strong. While the area itself predominant- ly consists of middle-income households, there are a number of neighborhoods nearby where the home prices average greater than $1 million. "There are demographics in the area on both sides of the spectrum," says Maksin. Moonbeam has already leased more than 300,000 square feet to national re- tailers to anchor the retail component of Burlington Center Mall. "There is extremely high demand for restaurant users, and that has caused us to redefine some plans at the center," says Pryor. "We are now bringing in additional restaurants with our strong line up of hard and soft goods tenants." The company expects to complete the first phase of the redevelopment process at Burlington Center Mall in late 2016 or early 2017. In late 2012, Moonbeam purchased West Oaks Mall near Orlando, Florida. The center is anchored by Dillard's, JC Penney and AMC Theatres. Moonbeam originally planned to backfill two vacant anchors and a number of inline spaces. Over time, it realized that the commu- nity did not need another traditional mall. Instead, Moonbeam is now planning to reduce the size of the retail center and add a convention center, with a hospital- ity concept, office, and a few residential components. In suburban Atlanta, Moonbeam pur- chased Gwinnett Place Mall. Originally developed in the 1980s, Gwinnett Place became a victim of its success. The cen- ter was 1 million square feet of retail sur- rounded by more than 3 million square feet of ancillary retail. When a competing Rendering of Moonbeam's Burlington Center in Burlington, New Jersey.

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