Pennsylvania Real Estate Investment Trust (PEI - Free Report) — better known as PREIT — announced the opening of three new retailers — DICK’S Sporting Goods (DKS - Free Report) , Field & Stream and HomeGoods — at Viewmont Mall in Scranton, PA, within the space which was previously occupied by Sears Holdings Corp. .
This marks the conclusion of the anchor-improvement program at this mall which is aimed at diversifying the tenant mix, meet shoppers’ demand and boost sales per square feet of this retail property.
HomeGoods occupies 23,000 square feet of space in the property, while DICK’S Sporting Goods and Field & Stream occupy 90,000 square feet in one dual store concept store.
Notably, PREIT had recaptured the spaces previously occupied by Sears and secured these high-performing replacement anchors for filling up the spaces again. This was achieved within 14 months of Sears’ closing.
In fact, PREIT has been strategically focusing on enhancing the value of the Viewmont Mall through its portfolio-wide remerchandising efforts. The company added national tenants — Ulta Beauty (ULTA - Free Report) , Wild Wings and others — together with new prototype stores for a number of major tenants. With these diligent efforts, the company has been able to organically increase 16% in sales per square feet since Dec 31, 2013.
No doubt, the shrinking mall traffic and store closures amid aggressive growth in online sales have kept retail REITs on tenterhooks. In addition, tenants are demanding substantial lease concessions owing to a choppy retail market scenario. Nonetheless, retail REITs are countering this dreary situation and putting in every effort to boost the productivity of the malls, by trying to grab attention from new and productive tenants and disposing the non-productive ones on the other hand.
PREIT, too, along with its remerchandising efforts, has resorted to a portfolio rejig, selling 17 lower productivity malls, as well as other non-core properties since January 2013. This helped the company reap more than $750 million in gross proceeds. (Read more: PREIT Closes Sale of 17th Low-Productivity Mall for $33.2M)
The company’s above discussed efforts are likely to help it efficiently tide over the lackluster retail environment and ride on the growth curve as well.
PREIT currently has a Zacks Rank #3 (Hold). The company’s shares have descended 9.6% over the past three months, underperforming the industry’s rally of 3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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