DDR pumping $50M to redevelop 4 island malls
DDR Corp. announced plans Monday to redevelop four shopping centers in Puerto Rico – Plaza del Sol and Rexville Plaza in Bayamon, Plaza del Norte in Hatillo and Plaza Escorial in Carolina, at a cost of $50 million.
“These redevelopments are being driven by strong tenant demand for high-quality space, and with limited new construction on the island, our centers continue to offer a compelling choice for expanding retailers,” said Paul Freddo, senior executive vice president of leasing and development for DDR.
DDR is making a gross investment in these centers of more than $50 million and projects to generate a return that exceeds the company’s 10 percent return on investment threshold for redevelopment.
DDR officials will be in town Tuesday to talk about their local plans.
The redevelopment at Plaza del Sol, a 676,000 square-foot enclosed mall that features Walmart, Home Depot, Caribbean Cinemas and Bed Bath & Beyond, is expected to start in early 2012. The project includes relocating the existing food court and converting the former food court into approximately 25,000 square feet of in-line space in the highly-desired and highly-trafficked central corridor of the mall. The expected completion date is late 2012. It is anticipated the redevelopment and re-merchandising effort will further enhance the current sales per square foot of more than $500, company officials said.
Plaza del Norte, a 671,000 square-foot enclosed mall that also generates over $500 in sales per square foot and features Walmart, Sears, Toys “R” Us and T.J.Maxx, will be redeveloped to include a 30,000 square-foot expansion and renovation of the existing JCPenney. The project also includes the addition of a new Rooms To Go, the combination of three small shop units to accommodate a new PetSmart, new carts and kiosks and a significant interior and exterior renovation. The project is expected to be completed in early 2013.
The improvements at Rexville Plaza include the addition of new CVS and Marshalls stores in the space currently occupied by an underperforming Pueblo Supermarket that closed earlier this year. The project is expected to be completed in summer 2012.
The project at Plaza Escorial, which currently features a Walmart and Sam’s Club that together generate annual sales in excess of $250 million, will include the addition of a new PetSmart store which will open prior to year end in the space formerly occupied by Borders. This location will represent PetSmart’s fourth location in a DDR center in Puerto Rico.
“This investment in a number of our most productive assets will improve the experience for our shoppers and solidify the market-leading position for these prime centers,” Freddo said.
The projects will be funded with retained cash flow and capital recycled from the continued disposition of non-prime assets.