In the wake of Saks Fifth Avenue’s exit from The Mall of San Juan, the shopping center’s owner, Taubman Centers, is “actively looking” for either one or several tenants to move into the 100,000 square-foot space, executives said during a conference call with analysts.
Robert Taubman, CEO of Taubman Centers Inc., said, “It could be one tenant, it could be a retailer, it could be an entertainment tenant, it could be two to three tenants. We’re talking to a whole range of people trying to figure out what we think would be most additive into the merchandising of the center.”
The executive made the comments during the discussion of Taubman’s third quarter results, in which it disclosed it had reached a resolution with Saks Fifth Avenue’s parent Hudson’s Bay Company, which agreed to pay Taubman $26 million to end the leasing contract at The Mall of San Juan.
“In August, we settled the lawsuit with Hudson Bay Company regarding the Saks location at The Mall of San Juan. As you recall, in September, 2017 the Saks store sustained significant damage as a result of Hurricane María and did not reopen,” said Taubman.
“We felt strongly. Our agreements were clear and that Saks was required to make the necessary repairs and reopen as expeditiously as possible. With Saks closed, total sales grew nearly 20% compared to pre-hurricane levels and leasing along with merchandising continued to improve,” he added.
That resolution put an end to a two-year court battle that began in October 2017, when Plaza International — Taubman Centers’ local operation — sued Saks for keeping it in the dark about recovery and reconstruction plans after Hurricane María ripped through Puerto Rico, and the store, on Sept. 20, 2017.
“We do think the Saks resolution allows us to move forward. We realized a gain on the transaction. And you ask, is there going to be capital to re-tenant it, and it is possible. But we now have the ability to track a more productive tenant for that building,” he said.
Taubman now has full control of the two-story location which Taubman said, “We’re actively showing the space to a number of potential tenants and we feel good about our opportunity to rebuild that location.”
“We expect to have strong tourism this year given what has happened in the Bahamas. We expect the center to continue to grow. It has been a long process, but we’re optimistic about the center and we’re very pleased to have the Saks resolution behind us,” Taubman said.
The Mall of San Juan is currently 90% leased, but Leopold said there is still work to be done.