The sale of a fully leased shopping center opposite Westfarms Shopping Center is another sign that outdoor commercial space is at the forefront of the commercial real estate recovery in the aftermath of the pandemic.
Newington Westfarms Center, which straddles the West Hartford-Farmington city line, is anchored by Dick’s Sporting Goods, Ulta Beauty and DSW. Agree Realty, of Farmington Hills, Mich., bought the nearly 97,000 square foot “outdoor” center for $26.4 million. The seller was Tartaglia Commercial Properties of Monroe.
David Gavin, senior vice president of commercial property services firm CBRE in Stamford, which was involved in the sale, said strip malls have more options for dividing up space for tenants, sometimes giving them length ahead of a closed shopping center that loses a major tenant.
“A lot of the malls where you see a level of distress are often the ones where you had an old Sears box, an old K-Mart box — or whatever — and you had 150,000 feet in line and obviously there are issues with the backfill that space,” Gavin said.
While Westfarms has held up well during the pandemic, some other large malls in Connecticut, notably in Meriden, have been forced to look outside of retail to fill empty spaces. At Meriden Mall, a former Macy’s space will be used by Yale New Haven Health to provide services.
Gavin said tenant diversity also played an important role in the sale of Newington Westfarms, with the recent addition of Dick’s Sporting Goods.
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A recent report from CBRE said internet sales, which have soared during the pandemic, are now “flattening” as more shoppers return to stores. The pandemic-induced shift to remote working should also benefit smaller shopping malls in the suburbs, according to the report.
“We’ve all seen a lot of negative retail headlines, especially in 2020 during the pandemic,” Gavin said. “But retail is back. People are shopping. »
Stores are also looking to better integrate their online sales with their storefronts, including offering in-store online pickup and returns.
CBRE’s report was based on statistics up to the end of last year.
U.S. retail sales, as reported by the Commerce Department, increased in each of the first four months of 2022. But there was a slight decline in May compared to the previous month, mainly due the decline in car sales. Excluding motor vehicle sales, retail sales rose in May, but at the slowest monthly pace so far this year.
Economists say slowing retail sales gains suggest consumers are feeling the pinch of inflation – the highest in more than 40 years – particularly at the pumps.
Kenneth R. Gosselin can be reached at [email protected]