The Mall of San Juan has continued its strong post hurricane recovery, with an 86 percent occupancy rate, and new tenants to reopen in the fall, Robert Taubman, CEO of Taubman Centers Inc. said during a quarterly earnings call with analysts.
Taubman Centers Inc. does business in Puerto Rico as Plaza Internacional and owns the shopping center. During the call, Taubman said “traffic in the center is strong, with total sales solidly above last year’s pre-hurricane levels and sales per square foot 33 percent higher year-to-date.”
“The center appears to be benefiting from an overall reduction in retail real estate restaurants on the island due to the hurricane, much of which is likely not to return,” he said.
The Mall of San Juan remained closed for a month after Hurricane María struck on Sept. 20, 2017, and in the time since going back to business, the shopping center has seen a high tenant turnover rate, with many of the original stores shutting down and new ones — many of which are locally owned — taking their place.
During the call, Taubman said the quarterly results were achieved largely without the benefit of the tourism industry, as many hotels and resorts have either been occupied by aid workers or have remained closed after last year’s hurricanes.
“In fact, tourism was down more than 40 percent between January and April this year. Anecdotally, pre-bookings suggest tourism will return this holiday season and will again benefit the center and the island,” the executive said.
As for store openings, last week, Nordstrom announced it will be reopening Nov. 9th, while the other anchor tenant, Saks Fifth Avenue remains closed without an opening date in sight.
“Well, it is in litigation. We believe strongly they’re required to rebuild and reopen as expeditiously as possible,” Taubman said. “They did begin remediation efforts. They haven’t begun reconstruction. But we’re not in a position to comment, given the litigation that’s in front of us.”
As this media outlet reported, the mall operator filed a lawsuit against the luxury retailer late last year at the San Juan Superior Court. Hearings on the matter are ongoing.
Meanwhile, Simon Leopold, chief financial officer of Taubman Centers, said while the company is seeing “seeing encouraging sales and Net Operating Income turned positive,” the operator’s guidance assumes that some of the sales, coupled with business interruption insurance proceeds will total $10 million for the year.
“We continue to believe that will be the case, but we’ve not received business interruption insurance proceeds to date and the timing and amount we will receive have not been determined,” Leopold said.