VOL. 127 | NO. 48 | Friday, March 09, 2012
The traditional enclosed shopping mall is supposedly a retail relic, a throwback to the days when most consumer buying activity occurred behind bricks and mortar.
Shoppers visit Wolfchase Galleria on Wednesday afternoon. Still the largest single property taxpayer in Shelby County, Wolfchase just signed three new tenants: Tempur-Pedic, Pandora and Clarks.
(Photo: Lance Murphey)
Fifteen years after it opened, though, Wolfchase Galleria is still holding on, maintaining a high occupancy rate, bringing on innovative concepts that fit into the mall’s existing mix and having recently announced a group of new tenants.
All of this, while Amazon.com has essentially become America’s modern shopping mall and customers have more options than ever when it comes to ways to get separated from their dollars.
Earlier this week, Wolfchase announced three new stores that are opening this spring: jewelry shop Pandora, the shoe store Clarks and Tempur-Pedic by Mattress Firm.
The mall – which general manager Brian Hanson said has an occupancy rate in the high 90 percent range – also has other relatively new additions. They include a newsstand tenant, where customers can now buy newspapers, snacks and the like, and Best Buy Mobile, an offshoot of the giant electronics chain.
Best Buy Mobile opened inside Wolfchase in the fall and offers a subset of the chain’s larger product mix, focusing on phones, tablets, PDAs and similar items.
One of the big clues pointing toward Wolfchase’s status as a cash cow for the region is its tax bill. The mall’s owner, Indianapolis-based Simon Property Group, got a roughly $4.3 million combined city-county 2011 tax bill for the mall, which includes more than 1 million square feet of space and sits at the corner of U.S. 64 and Germantown Parkway.
“The other part is the sales tax revenue our retailers generate,” Hanson said. “There’s millions there in economic impact that we generate, as well as everything around us that was built because of the mall.”
Along those lines, Danny Buring, partner with The Shopping Center Group LLC, said Wolfchase has to be thought of in a broader context than just the mall. It is 1 million square feet of mall retail space surrounded by another 5 million square feet of retail in the general vicinity, the creation of which was driven largely by Wolfchase.
“The traditional mall, there’s always going to be a place for it,” Buring said. “But you won’t see any new malls being built unless there’s some geographic reason for it.”
The Urban Land Institute’s 2011 Emerging Trends in Real Estate report made that same point, noting that for the first time since the early 1950s, no new malls are under construction in the U.S.
From Memphis’ perspective, the city is also slightly over-retailed. The national average is 23 square feet of retail per person, while Memphis’ average tops 30 square feet.
Meanwhile, Hanson said that even during the recession Wolfchase has held up well, finding a way to fill as much space as possible with both national and local tenants. More impressive – the mall has never had an anchor vacancy.
Among the new stores opening there soon, Pandora offers jewelry like charm bracelets, rings, necklaces and earrings in gold, sterling silver and some with semi-precious or precious gems.
Clarks offers shoes for men and women. The Tempur-Pedic store will carry items like mattresses, pillows, bed linens, and cushions.
“Last year, we opened six or seven new tenants, several that were unique to the market,” Hanson said. “Our chairman and CEO David Simon has said this a number of times – at the end of the day, good real estate is good real estate. I think the retailer knows that. And they want to be in the best asset whether it’s a mall or lifestyle center. Our assets, quite frankly, are very durable. They’re very strong in the marketplace.
“The different formats will always be there, and at Simon, we have exposure in all those areas. Regional malls that are located well, leased well and managed well, they’ll survive.”