Mall remodel
Cottonwood’s shuttered Macy’s space receiving $21M makeover
The owner of Cottonwood Mall on Albuquerque’s West Side is planning a $21 million face-lift of the property’s empty Macy’s space — a move that it hopes will attract new tenants.
Washington Prime Group, in its third-quarter earnings release on Wednesday, said it has earmarked about $21 million to redevelop the shuttered Macy’s department store space at the mall, which closed earlier this year.
“The high-visibility anchor space will be redeveloped for new uses that include off-price and home furnishings retailers,” according to the release. The company said the project is expected to be completed in 2018.
Macy’s sold its 164,800-square-foot box to Washington Prime in June for an undisclosed price.
Washington Prime, a Columbus, Ohio-based real-estate investment trust, said redevelopment spending at its shopping centers will total about $100 million in 2017, but a spokeswoman on Thursday was unwilling to provide specifics on its plans for Cottonwood.
Questions related to any lease negotiations or imminent signing of tenants, the general nature of the renovation, opportunities for local contractors or whether any local broker was involved went unanswered.
“Those details will be forthcoming,” said Kim Green, vice president of investor relations and corporate communications.
What is clear is that many mall stalwarts, from Macy’s, J.C. Penney and Sears to Victoria’s Secret and the Gap, are shuttering stores.
Online shopping is one reason. The Pew Research Center said 68 percent of Americans now own a smartphone — an increasingly popular tool for shopping.
While mainstream retailers are struggling, low- and middle-income shoppers are flocking to off-price retailers like T.J. Maxx, Marshalls, Ross Dress for Less and Burlington.
Moody’s Investors Service predicts the same four value-oriented chains will “continue to outperform the apparel retail segment over the next five years.”
Even more telling is how off-price retailers are adding stores while the footprint of traditional department stores keeps shrinking. Moody’s expects the off-price segment’s market share in sales to grow to about 10 percent of apparel sales by 2018, from 8.8 percent in 2015.
“The off-price incumbents are able to purchase high volumes of disparate goods from suppliers through their significant scale, flexible purchasing, strong vendor relations and adaptable real-estate strategies,” the Moody’s report said.
Developers and mall owners are also breathing new life into shopping centers to generate foot traffic, including Washington Prime. In July, the company said it was investing $15 million where a Dillard’s used to be to make way for a 50,000-square-foot entertainment center at one of its Ohio malls. The space will combine a bowling facility with billiards, darts and dining.
As of Dec. 31, Washington Prime had interests in 114 properties containing 65 million square feet of leasable area.