VOL. 131 | NO. 46 | Friday, March 4, 2016
Nordstrom Will Lure More Class A Retailers to Memphis
By Madeline Faber
Nordstrom Rack is just the tip of the Class A iceberg. At least three more best-in-class retailers are headed for the newly-built East Memphis shopping center, and the fate of the Wolfchase Galleria Sears is to be decided.
On March 2, Seattle-based Nordstrom Inc. announced that it will open a 33,000-square-foot store in fall 2017 on the site of the soon-to-close Sears store at 4570 Poplar Ave., adjacent to Laurelwood shopping center.
And Nordstrom Rack is just one piece of a much-larger plan for the property: an entirely new shopping center dubbed Poplar Commons.
Seritage Growth Properties is developing the center, which will total 135,000 square feet and include “national retailers, specialty retailers and several well-known restaurants.”
New York-based Seritage is intimately familiar with Sears’ operations. The publicly traded real estate investment trust was formed last June to buy the real estate assets of Sears Holdings Corp. A month later, Sears Holdings sold 254 of its Sears, Kmart and other subsidiary properties to Seritage.
A handful of those properties are in Memphis and include the Sears at Wolfchase Galleria and its auto center outparcel, the Poplar Sears and its auto center outparcel and the On The Border restaurant near the Poplar Sears.
Sears will lease back some of the properties in the Seritage portfolio. Some will be replaced with new tenants or box splits and others, like the Poplar Sears, will be razed completely to make way for new developments.
Real estate experts close to Seritage said that the upcoming Poplar Commons center likely will include three to four big-box tenants across a single story. The restaurants would be outparcels, with the auto center torn down. Everything would be in place for the planned 2017 opening with construction starting this year.
In a corporate profile report released in December, Seritage highlighted three redevelopment projects undertaken in 2015 that could be similar to what brands make the cut at Poplar Commons.
A Sears in Virginia Beach, Va., is under construction to house a Sears, Nordstrom Rack, DSW and The Fresh Market. Bank BB&T and restaurant Smokey Bones are the outparcel tenants.
Seritage recently completed reconfiguring a freestanding Sears in Thousand Oaks, Calif., into a Sears, Nordstrom Rack, DSW and Sports Authority.
Another Sears in King of Prussia, Pa., is nearly complete in its redevelopment into a Primark clothing store, Dick’s Sporting Goods and an Outback Steakhouse.
In each case, the redevelopments were Seritage-only projects and not one of the 31 joint ventures Seritage has with Simon, GGP or Macerich. Neither of the Memphis Sears are listed as a joint-venture project in the report.
In an earlier conversation, Danny Buring with The Shopping Center Group said that whatever replaces the Poplar Sears would be a best-in-class, first-to-market tenant that would draw from different areas of town.
“I think what you're going to have is some of these tenants, they're going to come in and do one store in a market and they're going to pull from a 20-mile radius,” he said. “They're looking for the bull’s-eye location where they can attract as much of the MSA that's their customer to a central location as possible.”
On its leasing website, Seritage lists 74,240 square feet of the Sears at Wolfchase Galleria as available for lease. The total building is 151,630 square feet. The 10,030-square-foot auto center is also listed for lease with the ability to subdivide.
Buring is handling leasing for the Wolfchase Sears, which won’t close unless a tenant is found. Seritage will be doing its own leasing for Poplar Commons.
Nordstrom Rack is the off-price retail division of upscale Nordstrom, offering 30 to 70 percent off top brands. Nordstrom Inc. also operates a Nordstrom Rack in Brentwood, Tenn., and a Nordstrom store in Nashville.