Inland Western Leases 316,050 SF of Big-Box Space

March 3, 2010
By Allison Landa, News Editor

Courtesy Flickr Creative Commons user bdjsb7

Oak Brook, Ill.-based Inland Western Retail Real Estate Trust has signed 10 new leases totaling 316,050 square feet of big-box space since November 2009.

Formerly occupied by Linens ‘n Things and Circuit City, the space is now taken by Ashley Furniture, HH Gregg, Marshalls, Best Buy, TJX Home Goods, Bed Bath & Beyond, and Ultimate Electronics. The space itself is located at the Greenwich Center in New Jersey, Tollgate Marketplace in Maryland, Century IIII Plaza in Pennsylvania, Market at Clifty Crossing in Indiana, HQ Shopping Center in Texas, Southpark Meadows in Texas, Gardiner Manor Mall in New York, Shoppes at Stroud in Pennsylvania, Gateway Pavilions in Arizona, and King Philip’s Crossing in Massachusetts. All leases were for 10 years and all centers are more than 86 percent occupied.

Financial details were not disclosed.

“To lease and maintain value, we have gone back to core asset management tactics,” Inland Western chief investment officer Shane Garrison told CPE. “This ‘back to basics’ approach connects with local and regional tenants, as well as new concepts that we feel are a good fit for centers within the region. Put simply, to lease space today, you have to know your business and understand your strengths and weaknesses at each property to be successful.”

Garrison admits that the leasing negotiation process is tougher and considerably longer in today’s environment, noting that tenants in today’s marketplace have “really ramped up their modeling and sophistication.”

However, he also sees the shopping-center space moving toward what he calls a “haves and have-not dynamic.”

“The Tier 1 retailers are moving to take quality space in the class A centers,” he said. “They want to be a co-tenant with other Tier 1 players, and many have been very vocal about taking this downturn in the cycle as an opportunity to upgrade into quality centers. Couple that with the fact that many Tier II tenants have gone away via bankruptcy, and you start to realize that we are seeing a complete different retail landscape – class A, institutional quality centers, and then the rest.”

Inland Western is a self-managed REIT that acquires, manages, and develops a portfolio of primarily multi-tenant shopping centers nationwide. As of Sept. 30, 2009, that portfolio was in excess of 49 million square feet, consisting of 299 wholly owned properties and two consolidated joint venture properties.