Monday, August 20, 2007

Fox Valley's Battle of the Lifestyle Centers

Just when you thought there was too much retail in the Rt. 59 corridor, guess again. Here's a story on plans for two more lifestyle centers near Fox Valley Mall, one by Summit Development and the other by the Pennsylvania Real Estate Trust. These will compete against Poag & MacEwen's previously announced center going up at 59 and 111th Street.

Here's my analysis of the three centers.

Poag: has the advantage of time and landing anchor tenants such as Von Maur. The disadvantage is that it is farther south at 111th, although that may be a blessing in disguise as more people are turned off by traffic on 59. (I was at the opening of Fox Valley Mall back in the 1970s, and I don't think I have been the area in at least ten years because of traffic. No thanks.)

Summit: not my favorite location at the intersection of Ogden and 75th, but at least it is the southwest corner. This is probably personal bias from way back. I think its biggest advantage is a smaller size. At 282,000 sf it may try to position itself as the elite, boutique lifestyle center. At least that would be my initial marketing angle. Regardless of the positioning strategy, it also has less space to lease up and therefore less risk.

PREIT: theoretically this is the best location although you can argue that the area is so congested that it is too busy. I also think a new high school is going in that area to boot. The downside is competition and being the last to the game, not to mention the fact that PREIT paid more than $13/sf for the raw dirt.

Stay tuned....