This mall is really mixing up its tenant base

The Movie Studio, an independent filmmaker that offers the public opportunities to audition for its productions, will move into 6,400 square feet in Galleria at Fort Lauderdale in late February, joining tenants more likely to appear at a mall like anchors Dillard’s, H&M, Macy’s and Powerhouse Gym. The Movie Studio’s space will house offices, content creation areas, editing/voiceover suites, other departments like wardrobe and a 15- by 20-foot stage.

“The Movie Studio will complement our existing, diverse tenant base,” said Galleria vice president and general manager Mark Trouba. “We continue to evolve, utilizing space for nontraditional mall businesses — such as professional office space, local not-for-profits, a gym and a creative art studio — that coexist with our popular stores and restaurants.”

This time last year

Revisit our stories from this week last year to see what’s changed. Hint: It’s plenty. We highlighted medical tenants this time last year, and they’re still hot, as we reported in last week’s Week in review. Stories on expectations of property trades and online brands growing their brick-and-mortar footprints? Those could come true, though perhaps not on the time line anticipated this time last year.

Three mall spaces going to medical tenants
Looks like more properties will trade in 2020
Nearly 30 online brands that are geared up for offline growth
Canadian malls’ retail sales per square foot climbed in 2019
The ICSC member bringing a new kind of development to Vegas
Five Below plans 180 new stores in 2020

The physical store changes retailers are planning

The pandemic is influencing how retailers are managing their portfolios, according to BDO’s 2021 retail CFO Outlook Survey. Thirty-one percent of retail CFOs said their companies are reducing their mall-based store footprints, and 39 percent plan to increase investments in their physical stores. In terms of changes to physical stores, 41 percent plan to offer buy-online-pick-up-in-store if they don’t already, 45 percent to implement contactless payments, 47 percent to revamp their layouts for social distancing, 56 percent to require face masks and 43 percent to limit in-person capacity.

Case in point: Curbside at Costco

Costco has launched curbside pickup, joining the majority of national chains. Costco has yet to release a statement on the service. According to its consumer-facing website, the service is powered by Instacart and enables online shoppers to pick a one-hour no-contact pickup window. Costco charges $10 for the service and requires a $100 minimum order.

Meanwhile, home delivery could get more expensive

New surcharges might increase customer shipping costs, which could deter consumers from making purchases online. For shippers that averaged over 300,000 packages a week in January, FedEx will introduce new surcharges for Ground and Express deliveries on Feb. 15. FedEx’s leaders, anticipating e-commerce growth, don’t believe the surcharges will go away.

RELATED: E-commerce will face a reality check, according to Gordon Brothers’ Thomas Pedulla

Good news from two value chains

Following strong 2020 holiday sales, Citi Trends plans to open 100 stores by the end of 2023. It also will remodel at least 150 of its 585 existing stores by that time. Same-store sales for the chain — which sells apparel, accessories and home merchandise aimed at minority shoppers —increased 10.3 percent year over year for the nine weeks ending Jan. 2, versus 3.6 percent year-over-year growth for the same period last year. The company expects double-digit growth for the entire  fourth quarter, as well.

Off-price home goods retailer Tuesday Morning exited Chapter 11 bankruptcy protection after shedding 197 underperforming stores. The company now operates 480 stores and has a $110 million financing facility.

Just because a center isn’t open yet doesn’t mean it can’t draw traffic?

California’s Republic Square at Livermore, slated to open this year, already is drawing foot traffic via its COVID-safe Art Walk and Expo. Works by more than 50 Bay Area artists are displayed inside the center’s empty-for-now storefronts, along with contact information to purchase. The program launched in December and has extended for a second month. The center — which comprises five restaurant buildings, two quick-service retail buildings and another retail building — is adjacent to two hotels also owned by Republic Urban Properties, as well as the San Francisco Premium Outlets.

Will rival office supply chains link up?

Office Depot and OfficeMax parent ODP Corp. dismissed Staples owner Sycamore Partners’ $2.1 billion acquisition offer, as ODP didn’t think the deal would pass antitrust scrutiny. ODP did indicate it might consider a joint venture between Office Depot and Staples or selling its retail and consumer-facing businesses, as leaving its B2B operations out of the transaction would invite less government oversight. Office Depot operates 1,200 stores, and Staples operates 1,068.

Résumé update

Taubman will promote Benjamin Meeker to senior vice president, CFO and treasurer. Meeker joined the firm in 2012 as director of capital markets and now will report to chairman, president and CEO Robert Taubman. He replaces Simon Leopold, who will leave the company at month’s end.

The latest retail property deals

Phillips Edison & Co. sold the 191,345-square-foot Sunrise Marketplace in Las Vegas, pictured at top, in a 1031 exchange. Tenants include Smith’s food and drugstore, Chase, Dotty’s, Applebee’s, Wingstop, Verizon and medical tenants. “The 1031 exchange capital remains active, and CBRE expects private capital investors will dominate retail acquisitions in the next 12 to 24 months, taking advantage of historically wide cap rates to U.S. 10-year Treasury yields and exceptional leveraged cash-on-cash returns not available in alternative investments,” said CBRE senior vice president Preston Fetrow, who represented the seller.

A private equity firm sold a 6,000-square-foot convenience store in Dallas that is double-net leased to Spec’s — a wine, spirits and finer foods store — for $4.3 million to an institutional investor. “Smaller, privately held tenants with healthy balance sheets, especially those deemed essential retailers like Spec’s, are now being acquired by institutional players at aggressive cap rates,” said Stan Johnson Co. associate director Mark Lovering, who represented the seller. “The winds are at the back of the net lease sector, and strong operators are highly valued.”

Broder & Sachse Real Estate purchased Enterprise, Alabama’s Park Place at Enterprise. Publix anchors the 61,000-square-foot center near Fort Rucker. Other tenants include Red Brick Pizza, Palm Beach Tan, Cuts by Us and Nail Boutique & Spa.

In a 1031 exchange, the 34,642-square-foot Cardenas in Whittier, California, traded for $14.8 million. Hanley Investment Group represented the seller, and CBRE represented the buyer. “Single-tenant grocery investments have remained one of the most sought after as an essential business and daily needs tenant, which is recession proof and internet resistant,” said Hanley executive vice president Carlos Lopez. “This continued demand represents a flight to safety and security.”

RK Centers will change the name of Best Buy Plaza in Plantation, Florida, to RK Best Buy Plaza — Plantation. RK Centers recently purchased the 58,400-square-foot property for $11.5 million from an LLC represented by Axiom Capital Advisors.

Walton Street Capital, represented by JLL, sold Schererville, Indiana’s 138,571-square-foot Town Square and Sparks, Nevada’s 155,471-square-foot Silver State Plaza. AlbaneseCormier bought both regional shopping centers. Town Square tenants include Bed Bath & Beyond, Old Navy and T.J.Maxx. Silver State Plaza tenants include CVS, Dollar Tree, Planet Fitness, Ross Dress for Less and Wendy’s.

Johnstown Plaza in Johnstown, Colorado, traded for $6.2 million. Tenants at the 15,140-square-foot property include Bad Daddy’s Burger Bar, Honolulu Poke Bar, Sprint and Visionworks. Marcus & Millichap represented the seller, a private developer.

Gazit Globe Group acquired the four-level, 50,000-square-foot 1430 Massachusetts Ave in Cambridge, Massachusetts, for $45 million from University Common Real Estate in an off-market transaction. The historic building, which fronts Harvard Yard, is occupied by retail on the ground floor and offices on the upper floors. Gazit Globe plans to bring in upscale retailers when CVS and Santander Bank move out in 2021. Cushman & Wakefield represented the seller.

Pebb Enterprises and Sagamore Hill purchased the 188,109-square-foot Soundview Marketplace in Port Washington, New York, on Long Island. The center comprises four buildings on 11 acres. Tenants include Walgreens, West Marine and Ace Hardware. Target and TJ Maxx recently signed long-term lease renewals at the center. Transwestern represented the seller.

Lamar Cos. sold Tricity Pavilions — a 94,268-square-foot, Safeway-anchored center in Mesa, Arizona — to HK Real Estate Investment for $15 million. Tenants include H&R Block, My Doctor Now, The Stone, TruWest Credit Union and Mesa Barber School.