Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/803877
64 S C T / A P R I L 2 0 1 7 S I T E S & C I T I E S there are three major malls located within a mile's radius of downtown. These are: City Creek Center, Salt Lake City's premier shopping destination, which features a facade from the original ZCMI (for Zion's Cooperative Mercantile Institution) department store; The Gateway, an open-air destination center recently purchased by Vestar and Oaktree Capital Management and which is poised for a $30 million redevelopment; and Trolley Square, which was purchased out of bankruptcy in 2013 and will soon see some major redevelopment nearby. Farther afield from downtown, no fewer than four major suburban malls are currently under redevelopment: the Fashion Place mall, in Salt Lake County, which is to include one of only two Macy's department stores set to open in the U.S. this year; Newgate Mall, in Ogden (which Time Equities purchased last year from GGP for nearly $70 million); Provo Towne Centre (purchased by Brixton Capital last year); and the 1.3 million-square-foot South Towne Center, in Sandy. The Salt Lake City retail market is not entirely immune from the challenges facing other parts of the country, including rising construction costs and the closure of many mid- box and big-box stores. Kmart, Sears, Shopko and The Sports Authority all closed stores in the locality last year, accounting for some 150,000 square feet of vacant space. More closures have been announced for this year, but most market watchers are in fact excited at the prospects for the repurposing of these spaces. "Of the four Sports Authority boxes, three of those already have two to four letters of intent to split the box in a couple different ways," said Clark. "The second they hit the market, offers were already in hand to the developers even leading up to their closures. I think, from a retail standpoint, 2017 will probably prove to be a better year than both 2015 and 2016." n B loomington, Minn., is well known as home to the Mall of America, and, oddly enough, as a virtual consumer island in the middle of two major Twin Cities trade areas: Southdale (Bloomington, Edina and Richfield) and Eagan–Apple Valley. In part this is because the mall borders the Minneapolis–Saint Paul International Airport and also because it is so big. Unlike a regional mall, which is usually surrounded by outparcels of open-air centers, there is almost no retail around Mall of America for a one-mile radius. The surrounding trade areas operate in their local economies with their own malls and shopping centers, all of which are doing extremely well. Today Mall of America casts a relatively tiny shadow over Bloomington, Richfield or even Apple Valley retail. The nearest shopping to Mall of America is at Southtown Shopping Center, about a mile to the west. The approximately 450,000-square-foot Southtown has been renovated multiple times and is 98 percent occupied. Roughly the same distance away, in Richfield, is the 200,000-square-foot Shops at Lyndale. Retail occupancy in the Southdale trade area stands at about 98 percent, while the Eagan–Apple Valley is 92 percent — both figures circling the greater Twin Cities numbers. "Retail vacancy for the Twin Cities metro area is generally under 5 percent," noted Terese Reiling-Holden, a Minneapolis- based vice president of retail brokerage for Colliers International. In Southdale and Eagan–Apple Valley, big-box rent rates run between $8 and $12 per square foot. For junior boxes, rents are about $15 to $20 per square foot, and for in-line space they are roughly $25 to $45 per square foot, according to Jim Leary, a CBRE senior vice president of capital markets. "In regard to rents, the Southdale trade area is at the higher end of the metro," Leary said. Rents have been escalating in 'A' trade areas, notes Reiling-Holden. "There has been heavy competition in the grocery-anchored — Hy-Vee and Fresh Thyme are active — and strip center space, much of the latter driven by the quick-serve restaurant category," she said. Over the past few years, Hobby Lobby, Sierra Trading Post and Total Wine & More have opened. Caribou Coffee, Dunkin' Donuts, Tim Hortons and Starbucks are expanding, as are Café Zupas, Naf Naf Grill, Piada Italian Street Food, R Taco, Smashburger and other eateries. "Rents for big boxes have been flat," said Leary. "But in-line space is hitting rent heights never experienced before. Some in-line rents touched $60 a square foot within the Southdale trade area." n Mall of America's neighbors are thriving By Steve Bergsman In the shade of a giant