Case Study Tour Focuses on Redeveloping Aging Retail Center
Alan Roth, managing director for the Eastern U.S. for shopping center REIT Regency Centers, faced some difficult real estate investment decisions a few years ago. Kings Park Shopping Center, an aging 92,900 sq. ft. retail strip center built in 1966 in Burke, Virginia, was anchored by an undersized 28,000 sq. ft. Giant grocery store with an expiring lease. The modern store format for Giant required a much larger 50,000 sq. ft. footprint, and if this could not be accommodated, Giant would likely leave for a nearby competing retail property and reduce the value of the property. This challenging project was the subject of the second summer case study tour hosted by the Center for Real Estate Entrepreneurship for Mason students and real estate professionals last August 10 at the Kings Park Shopping Center.
Expanding the property’s footprint required a lease/option with an adjacent building, obtaining access easements from a second property, and purchasing a third property – a small land parcel whose original owners had long been deceased; all while negotiating the complications of new lease terms with a national anchor tenant and anticipating the needs of smaller tenants during disruptive demolition and reconstruction. Roth presented these interlocking challenges before a packed community center room, and showed how Regency effectively analyzed and solved each problem.
The result was a successful redevelopment and reinvention of the property, with a new long-term Giant lease with an expanded store, and an updated retail façade and common areas that attract strong consumer foot traffic. Roth and his team added substantial cash flow and value to the property – a great example of what can be achieved with real estate creativity and expertise.
The case study presentation was followed with a walking tour and a networking reception. The 2016 summer case study series focused on redeveloping obsolete retail properties and locations, which is an on-going challenge in Washington D.C.’s mature suburbs as retail property owners respond to ever changing consumer tastes and preferences.
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