An open-air shopping center in northern New Jersey is currently operating at 100% occupancy level.Capstone Realty Group purchased the Edgewater Marketplace back in 2013. The shopping center is located along the Hudson River, just across from New York City. The price tag came in at $21 million, and the center was only 73% leased at the time of sale. Earlier this year, the more than 88,000 square foot shopping center became 100% leased.
“The Internet’s not going to hurt this center at all," according to Rob Friedberg, managing partner of Capstone. So why is Rob so confident? They’ve filled the shopping center with tenants that are not affected by the world of online sales, and are not constantly in a rush to operate at dangerously low margins just to keep pace.
Edgewater Marketplace features multiple service-related businesses, restaurants, a pet boarding and day-care facility, and a walk-in medical clinic to name a few. Capstone enlisted nearby Ripco Real Estate to fill the center with tenants that will draw a steady stream of people to the center. As opposed to an electronics or clothing retailer that may be undercut by one of the retail behemoths and face financial peril, it’s pretty hard for the Amazon’s and Wal-Mart’s of the world to compete in the areas of sit-down dining, medical services, fitness classes or beauty treatments, for example.
Capstone is not the only shopping center owner in the state of New Jersey that subscribes to this theory either. George Jacobs is the managing partner of the Styvertowne Shopping Center in Clifton, and is the developer and owner of several other centers throughout the Garden State. He shares a very similar philosophy to Capstone’s in terms of filling space.
“I want tenants that sell something not easily delivered to your door. Anything that’s a commodity, where it’s the same whether it’s online or in the store, and it’s not consumable, merchants are having a hard time competing. I’m not interested in something that’s going to be eaten alive by the Internet," he said.
Jacobs is particularly fond of medical tenants, and notes that the medical community is beginning to recognize the value of a presence in a retail center. Grocery and restaurants remain as the primary drivers for traffic to shopping centers, but the concept of focusing on medical, services and destination-type merchants and providers to fill the remainder of the space should be squarely on the radar of center owners and developers.