“We’re more selective,” said Bob Brvenik, president of Prime Retail, a subsidiary company of the New Jersey-based Lightstone Group, which is buying the mall.
Some retail property managers tend to cut rental rates to attract any and all possible tenants, he observed. “That’s usually not our M.O. here.”
Prime Retail will manage Mount Berry Square once its sale to Lightstone is complete — likely by September — and Brvenik predicts that the group’s strategic management will improve the mall’s performance.
“Before we go through and lease it up, we’ll look at our market and look at the retailers that are there,” he said. “We look for obvious holes within the tenant mix, and those are the people we go after. We take a disciplined approach.
“We’ll probably bring a cadre of new tenants to the market you haven’t seen there before,” Brvenik added.
Shoppers may recognize the Prime Retail name from its Prime Outlets off Interstate 75 in Calhoun. The company manages 36 outlet centers around the country, but Brvenik said he does not plan to switch Mount Berry Square or the other malls that Lightstone is buying to an outlet-store approach.
“Under the Prime Retail umbrella, these are the first full-priced (traditional mall) assets we’ve purchased. But it’s certainly not a new concept to the staff here,” he said, adding that he and many of his colleagues worked with full-priced retail properties before joining Prime Retail.
The Lightstone Group bought Prime Retail in December. Lightstone then announced earlier this month that it is buying five malls including Mount Berry from the Pennsylvania Real Estate Investment Trust for about $111 million, plus certain fees and closing costs.
PREIT had acquired the malls in November when it merged with Crown American Realty Trust. It announced immediate plans to sell off six of the lower-performing Crown malls, including the five that Lightstone has agreed to buy.
For the 12 months ending March 31, the average sales of the five malls were $237 per square foot, which was $75 less than the average sales for PREIT’s other malls.
The other four malls being sold to Lightstone are Bradley Square Mall in Cleveland, Tenn.; Martinsburg Mall in Martinsburg, W.Va.; Shenango Valley Mall in Hermitage, Pa.; and West Manchester Mall in York, Pa. The five malls total about 2.6 million square feet.
Prime Retail’s specialty, Brvenik says, is turning around underperforming properties through strategic management and investment.
“We’ll work hard and put some money into them, and I think you’ll see a noticeable difference in them over the next couple of years,” he said.
He also offered praise for the successful rebuilding of what will be one of his key competitors in Rome, the Riverbend Center.
“Competition’s what made this country great,” Brvenik said. “I like Mount Berry. Clearly, there seems to be growth in that part of the market. It just needs more tenants.