Redeveloping and resurrecting outdated malls presents a tremendous opportunity for ambitious retail developers.In fact, redevelopment opportunities and “developing the undevelopable” were among the key themes at the recent ICSC RECon conference in Las Vegas. But projects of this nature can be fraught with risks that can quickly derail – or at least delay – the plans of the project developer, as CoStar reports.
The original Twin Peaks Mall was developed during the mall boom times of the 1980s by CBL & Associates in the Denver, Colorado suburb of Longmont. The mall was a hit and thrived well into the 2000s, featuring anchor tenants such as Sears, Dillard’s and Walmart. CBL would sell the mall to Panattoni Development Co. in 2007 for $33.6 million. At the time of sale, Twin Peaks boasted an occupancy rate of 83%, but the bottom would soon fall out.
Shoppers in the area would gradually flock to newer options, and as the customers left – so did the anchors. Dillard’s would be the last anchor standing when NewMark Merrill snagged the mall for $8.5 million in 2011, a huge discount over Panattoni’s acquisition cost, but Twin Peaks was only 30% occupied at the time of sale.
CoStar caught up with NewMark Merrill’s Luke McFetridge at RECon, and Luke would share some of the firm’s thinking behind acquiring Twin Peaks, and where it was headed in the future.
"We always liked the real estate but we looked at this as a land purchase, and one that had a lot of risk," he said.
The firm would set the wheels in motion for a redevelopment project that has seen its share of setbacks. Plans called for the original Twin Peaks mall to be demolished in 2014, and in its place would rise The Village at the Peaks, a 480,000 square foot lifestyle center – after the firm was able to navigate the hurdles set in front of it. Difficulties included a protracted battle with Dillard’s, the final anchor tenant, which would eventually be settled in court.
Along the way, NewMark Merrill has dealt with delays caused by some of the project’s key tenants ranging from the pushback of anticipated opening dates to the closure of the site’s Sports Authority location when the retailing giant entered bankruptcy proceedings. Through it all, the firm stayed the course, and can clearly see a path ahead for The Village at the Peaks.
"First, we needed to create a sense of place, and started talking with Regal about rebuilding a new 12-screen multiplex theater. It filled a void in the Longmont market and we needed a regional draw. Whole Foods and Regal fit the bill, and slowly, we received a level of interest that reinforced our confidence that this was still a solid retail location," McFetridge told.
While Whole Foods has delayed the opening of its 40,000 square foot anchor store until later this year, the opening of the popular, destination-type grocer will surely spark an uptick in interest in The Village at the Peaks.