Mall Owners Opt for Staggered Openings
Brookfield and Triple Five Group are slowly rolling out the retail options at their long-planned mall projects.
Located about 50 miles apart in the metro New York region, American Dream, a mixed-use destination totaling about 3 million square feet, and SoNo Collection, a 700,000-square-foot enclosed mall geared to upscale shoppers, don’t seem to have much in common except for the fact that they are opening in stages.
American Dream, Ice Rink
The $5 billion American Dream in East Rutherford, N.J., which had been under development with previous developers for more than two decades before Mall of America’s owner Triple Five Group took it over. The mall opened Oct. 25 with an indoor Nickelodeon Universe Theme Park and an ice-skating rink. The mega-mall, which is split 55 percent experiential, including dining, and 45 percent retail, launched the Dreamworks Water Park Nov. 27, an indoor snow park Dec. 5 and plans to unveil its retail offerings in March.
As of early February, the retail portion was more than 90 percent leased to Hermes, Saint Laurent, Century 21, Saks Fifth Avenue, Tiffany & Co., Zara, Uniqlo, Primark and other tenants. There will be more than 100 dining options and additional experiential features like Merlin Entertainment’s SEA LIFE Aquarium, LEGOLAND Discovery Center and a 300-foot Observation Wheel.
Don Ghermezian, American Dream CEO, said the company decided to open the property “in chapters to give each piece the celebration it deserves. We knew that having ‘one’ opening for a destination of this size just wouldn’t make sense.”
SoNo Collection, located in South Norwalk, Conn., is anchored by the first Nordstrom in southern Connecticut and the only Bloomingdale’s in the state. The Brookfield mall was also in the planning stages for years—not decades. It was started by GGP and completed after Brookfield bought the controlling stake in GGP in 2018.
The mall opened Oct. 11 at 90 percent leased with only 16 stores, including Nordstrom opening its doors. Throughout the rest of 2019 another 39 opened. More are continuing to open throughout Q1—Apple and Amazon opened in February– and Q2 of 2020.
“Being 90 percent leased we are in a great spot to continue to talk about names that are opening as they start to come online,” said Matt Seebeck, senior general manager of SoNo Collection. “We are well on our way to even more openings. As we continue through 2020, every day it feels a little more full.”
Industry Reacts
Retail consultant Jeff Green, partner at Hoffman Strategy Group, said staggered openings can be confusing to customers. “You’ve got consumers expecting one thing and getting another on a first visit. It’s not a good thing.”
But Greg Maloney, CEO, Retail, JLL, said clear messaging is key. “How do we make sure when the consumer comes, they know exactly what is happening,” he said. “You can fudge it a little, but you can’t say March and then open in September.”
Often, Maloney said, landlords are pressured by retailers who are ready to go and don’t want to wait for the entire center to open, particularly if it’s in the fourth quarter.
He said owners may also be boxed in by leases and would be required to provide givebacks like free rent if there are delays. Or they might even lose tenants, particularly those that committed early, if the opening keeps getting pushed back, Green added.
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