Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/739734
S T O R E F R O N T S a climbing gym would be a formidable undertaking t h a t r e q u i r e d s o m e c r e - ative juggling. For starters, there was the roof height: The building was 23 feet h i g h , o n l y a b o u t h a l f o f what was necessary. "We needed it to be 45 feet, at least to accommodate the 4 0 - f o o t c l i m b i n g w a l l , " Pedersen said. On another front, such an unorthodox concept typically requires equally unorthodox leas- ing agreements. Pedersen took on the $2.7 million build-out costs, $1.7 mil- lion of which went toward raising the height of the roof, with the rest going to equipment and various tenant improvements. The Shops at South Town own- ers for their part offered rent abatements over the f i r s t t h r e e y e a r s . P e d e r - sen signed a 15-year lease. "We couldn't make sense of that sort of investment unless we controlled the space for a long time," he said. T h e c l i m b i n g g y m opened in late 2006 to no little excitement, though business was a bit challeng- ing at the beginning. "Sales kind of went flat during the recession," Pedersen said. Things picked up again at the end of 2008 under a tighter budget, however, and by late 2009 the com- pany was showing double- digit revenue growth — a trend that has continued every year since. Pedersen ended up lik- ing the South Town loca- tion so much that he chose to open his next gym, too, in a shopping center, this time in a 24,000-square- foot former grocery store a n c h o r a t t h e M i l l c r e e k Place shopping center, in Salt Lake City. "After the challenge of going through a r o o f r a i s e , I t h o u g h t , ' W e ' r e n e v e r d o i n g t h a t again,' " he said. But Mill- creek offered a base rent attractive enough to make it all worthwhile, and Ped- ersen signed a 20-year lease. A pioneer in recogniz- ing the value of shopping center locations for indoor- c l i m b i n g - w a l l c o n c e p t s , Pedersen finds himself com- peting with other gym and fitness concept owners for mall space. "When Sports Authority went bankrupt, we were all out looking at Sports Authority spaces," he sa id . "I t's re a lly n ice to have co-tenancy, where people can just wander in and take a look around," he said. "That's what makes them so appealing." The company also oper- ates two nonmall climbing- wall sites, one of them in Lehi, Utah, and the other in Katy, Texas. S C T Wal-Mart Stores is slowing its physical expansion over the next three years, with 230 openings set for this year, 130 for next year and only 55 for 2018. The retailer has cut the percentage of its 2018 capital ex- penditure budget earmarked for new stores to less than one-third what it was in 2014. Instead, the retail behemoth will rely more on comp sales and omni- channel growth to drive more traffic to its stores and boost the top line, with plans to increase investments in e-commerce, technology, store remodels and other customer initiatives, President and CEO Doug McMil- lon told investors at the company's analyst meeting in September. WALMART SLOWS STORE GROWTH TO A 28 S C T / N O V E M B E R 2 0 1 6 Walmart strategic capital allocation