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PREIT's (PEI) Dartmouth Mall to Undergo Remerchandising

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Pennsylvania Real Estate Investment Trust — better known as PREIT — is leaving no stone unturned to attract consumers to its shopping malls. In fact, the company recently announced the remerchandising of Dartmouth Mall with a few new retailers taking up space, which is situated in southeast Massachusetts.

This comes as part of PREIT’s proactive anchor redevelopment initiative, which aims at diversifying the tenant mix, meeting demand of the shoppers and boosting sales per square foot of the retail property. With its continuous efforts, the company was successful in increasing the comp sales year over year in Dartmouth Mall by 9% to $509 per square foot for past 12 months, calculated as of January 2018.

This latest efforts include the addition of the brand Newbury Comics, which focuses on music, movies and pop culture items. It is intended to open in spring and will take up 3,900 square feet of space.  Forever 21 will be occupying 11,500 square feet of retail space for its outlet. Another new tenant that is slated to open its doors this fall is Eblens, which is a fashion label in England. It will be leasing 6,000 square feet.

Recently, a few retailers have also opened stores in Dartmouth Mall. Specifically, H&M opened a brand new store, spanning 23,000 square feet of space in the property. Encore, a shoe brand and Torrid, a brand specialized in fashion, have also launched their stores recently. Moreover, earlier in 2015, AMC Entertainment Holdings (AMC - Free Report) renovated their theaters by adding reclining seats and a bar in the mall.

Joseph F. Coradino, CEO of PREIT informed, "With a well-balanced and high performing mix of retail, dining and entertainment options for local consumers, Dartmouth Mall has become the dominant shopping hub within a 30-mile radius – with growing market share and more new additions slated."

Notably, the shrinking mall traffic, store closures and retailer bankruptcies, amid aggressive growth in online sales, have kept retail REITs, including PREIT and others like Simon Property Group, Inc. (SPG - Free Report) and Kimco Realty (KIM - Free Report) , on tenterhooks. In addition, tenants are demanding substantial lease concessions, owing to a turbulent retail real estate market scenario.

Nonetheless, retail REITs are countering this dreary situation and putting in every effort to enhance the productivity of the malls by revamping their properties and trying to grab attention from new and productive tenants, and disposing off the non-productive ones. While portfolio-redevelopment efforts are a strategic fit for the long term, such measures tend to drag margins in the near term.

Amid the dull retail real estate environment, this Zacks Rank #5 (Strong Sell) company underperformed its industry in the past three months. Shares of PREIT have descended 18% as compared with the industry’s decline of 10.2%.


You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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