Shopping Center Business

MAY 2018

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

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less than downtown. MOONBEAM 230 • SHOPPING CENTER BUSINESS • May 2018 Cushman & Wakefield estimates that up to 1,000 department stores will close this year. "You have to be flexible in to- day's environment," says Maksin. "And you've got to be able to change the REAs," adding that the Moonbeam companies do not carry debt, which gives them flexibility as landlords to reuse mall space. "This gives us a competitive edge over traditional mall owners who are stuck with the quintessential REA that is only retail-related," Maksin says. "If you are lev- eraged, bankers may not understand what you are doing, and they may not allow you to change the uses." PREPARING FOR FUTURE USES MCI's work to bring in alternative users and non-traditional retailers to the malls in its portfolio is laying the groundwork for a new strategy for the company. "The days of the old cookie-cutter ways of putting in apparel-based retailers are gone," Maksin says. "You need to come in and, for example, look at the ceiling height. Maybe you can do a trampoline center." MCI is adapting to the new nor- mal in retail by exploring such diverse tenants. "We recognize that American malls are struggling these days," says Shawl Pryor, MCI's senior vice president. "Converting retail centers to office space is gaining mo- mentum, particularly for specialized uses. Landlords have been left with 50,000 to 200,000-square-foot vacant boxes on their properties. We have begun to think out- side of the proverbial box by expanding relationships with office and industrial brokers and doing conversions from re- tail space to alternative uses. We have the amenities at our properties for quick, convenient shopping, dining and enter- tainment. Also, you can look at the infra- structure already in place not only within the building but entire property — water, sewer and fiber optics. So there are a lot of benefits for the traditional office user that would otherwise lease downtown to consider converting vacant anchor space at the mall for office use." Pryor adds that most of the malls in MCI's portfolio are located near major highways. Not only are the locations con- veniently accessible, the rents also cost "A 40-story building would cost ap- proximately $7 to $10 per square foot to operate, whereas most malls would be half the price, $3 or $4 per square foot at most," says Pryor. "Not only is such a lease economically viable to the landlord and tenant, the proximity to restaurants and the ability to have ample parking space are what really attracts the office tenants to the mall sites." Existing retailers and restaurants are unanimously enjoying the new big-box oc- cupiers, Maksin says. "They welcome the conversion of a separate structure, which may have formerly been a Belk or Sears building that sat vacant for years," Maksin Visit us at ICSC RECon 2018 • Booth S4610 P Street To schedule a meeting at RECon, email Expanding in all 50 states and Canada Requirements: • Typical Store is 1,000-1,400 sf with 15-20 ft. average frontage. • Minimum population 30,000 in a 3 mile radius. • Targeting medium to higher income households. • In-line with major anchors, out-parcels or strong retail strip centers – all work for us. • National co-tenants preferred. • Good visibility with access and ample parking. NOW WITH OVER 1,750 LOCATIONS! Moonbeam recenlty purchased a marina in Brooklyn, New York, from the National Park Service. The company plans to redevelop the property.

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