Bed Bath & Beyond Inc.’s buybuy Baby retail concept may open its initially Minnesota shop at Woodbury Lakes, filling a key vacancy for the rebounding buying center.
Buybuy Baby previous week finalized a rent for the 28,487-square-foot room that formerly was occupied by Linen ‘N Elements. The shop is slated with open this fall in time for the christmas buying season.
It’s the newest and most important step toward repositioning the buying center since Kansas City, Mo.-based mall programmer RED Development teamed with Hot York-based investment administration fast Fortress Investment Group with purchase it for $35 million previous summertime.
“This brings anything brand-new and distinctive, not merely for the center, but for the broader area,” mentioned Bobby Johnson, RED’s vice president of leasing. “That is the way we’d like with take Woodbury Lakes. It has a desirable lineup of tenants now, and we’d really like with take that with the upcoming level by adding a few of the greater tenants available who aren’t represented within the center.”
RED Development has a extended history with all the 467,330-square-foot home, placed near Interstate 94 and Hudson Road in Woodbury. The organization partnered with Minnetonka-based Opus Northwest with develop Woodbury Lakes for approximately $70 million in 2005, consequently sold it with Hartford, Conn.-based Cornerstone Property Advisers for $99 million in early 2006. (RED and Opus additionally developed The Shoppes at Arbor Lakes in Maple Grove in 2003.)
The recession and increasing vacancies, still, hit Woodbury Lakes hard. In September 2009, the home went back with Cornerstone’s creditors, a group led by Miami Seashore, Fla.-based LNR Partners Inc., through a deed in lieu of foreclosure.
One of several largest blows that led with the center’s financial challenges came when Linen ‘N Aspects, among the mall’s anchor tenants, shut in fall 2008 after submitting for bankruptcy. That, together with the closing of Z Gallerie, dropped the center’s occupancy rate with below 80 percent, causing co-tenancy clauses that enabled many different stores with pay reduced rents.
According with advertising contents offered by Minnetonka-based Welsh Cos. when it was listing the home on behalf of LNR previous year, filling the Linen ‘N Details area might generate an estimated $853,000 in more yearly base lease and running expenditures for the center.
“It became a glaring hole that required with be corrected because swiftly because potential,” Johnson mentioned, decreasing with comment on financial information.
A Babies ‘R’ Us rival
Buybuy Baby sells a variety of baby supplies and accessories, including nursery furniture, auto seats, strollers, toys, clothing and diapers. Nationwide, it competes with Kids ‘R’ Us.
The chain, which founded in 1996 and was acquired by Bed Bath & Beyond in 2007, is growing rapidly. It has 52 stores in 22 states, including 7 that have opened thus far in 2011. Many more are slated with open later within the year.
Woodbury is a suitable demographic fit for buybuy Baby\cf3 rquote s initial Twin Cities shop, mentioned Cock Grones, principal at Cambridge Commercial Realty in Edina. “It’s a young, reasonably affluent community, and clearly buybuy Baby isn’t going with go into an neighborhood with many retired persons. All day care centers available are on a waiting list.”
And from a company perspective, RED possibly was capable to provide buybuy Baby a competitive rental rate because it purchased Woodbury Lakes for this discounted cost. “Those big, nationwide tenants are notorious for paying low rents and wanting immense tenant improvements,” Grones mentioned. “It’s a lean contract that many men may t execute.”
Bed Bath & Beyond spokeswoman Bari Fagin mentioned the store is usually trying to find hot buybuy Baby places, though she declined with comment particularly on whether the Farmington, N.Y.-based firm plans to incorporate more stores in Minnesota.
St. Louis Park-based Mid-America Real Estate-Minnesota represents Bed Bath & Beyond and buybuy Baby in this marketplace.
Adding with the menu
The buybuy Baby contract brings Woodbury Lakes about 88 % occupancy. The center nevertheless has many vacancies, but the biggest is merely 8,365 square feet.
In addition with buybuy Baby, females s fashion accessories store Charming Charlie as well as an upscale-casual restaurant called Lakes Tavern & Grill both opened previous fall, following RED’s purchase. Edina-based Hot Mama may open a 2,100-square-foot store there upcoming month.
RED also offers been performing with lock up key tenants lengthy expression and newly finalized Michaels up to a 10-year rent renewal. Additional key tenants at the buying center include Trader Joe’s, H&M, DSW, Difference, Ethan Allen and Thomasville Furniture.
“It’s truly the only lifestyle center or specialty center represented by a great deal of nationwide tenants found on the east side associated with the Minneapolis-St. Paul market,” Johnson mentioned. “Thus, we catch those markets further with the east. It has a big territorial appeal.”
Next, RED plans with focus on attracting more eating choices, both full-service and fast-casual, with the buying center. Its only dining are Lakes Tavern & Grill, a Kinichi sushi restaurant and MaggieMoo’s Ice Cream & Treatery.
“Eating brings families or partners with the center regularly and presents a relaxation stopping point that assists extend their see,” Johnson mentioned. “Because we don’t have quote-unquote section stores as anchors, we see diners as another anchor, in the event you can, with drive folks with the center.”