- change ups
Lakeview Square Mall sale energizes Battle Creek retail 'node'
New ownership of the city’s largest shopping center has brought attention to the retail makeup of Battle Creek and has raised hopes that more retailers will locate there in the coming years.
GK Development of Barrington, Ill., a Chicago suburb, bought Lakeview Square Mall from a Maryland firm for $8.8 million last month.
Bill Bussey, who owns Retail and Restaurant Site Advisors and has worked in the retail real estate field for decades, said he wasn’t surprised by the sale.
Lakeview Square Mall has 559,000 square feet of retail space on 31 acres just off I-94 near M-66. Sears, Macy’s and JC Penney are the anchors.
Barnes & Noble, Dunham’s Sports, Victoria’s Secret and Payless Shoes are also there, along with Carmike Cinemas, Applebee’s and Buffalo Wild Wings.
“Well, somebody was going to buy it. At the price they paid, they’ll probably make money and they’ll probably work out lower leases,” Bussey said. “But it just wasn’t designed right. It’s got a lot of different floor levels and the hallways are not straight; they’re angled off. When you’re at Woodland Mall, you can look all the way down the hallways to see where the other shops are. In this one, you can’t. And it’s had vacancy problems for years.”
Bussey added that GK Development might not own the spaces the anchor stores occupy. In most malls, the major retailers own their sites and pay the mall owners for the maintenance of those spaces. Typically, mall owners give anchors their spaces so they can charge other retailers from $35 to $55 a square foot to be in the shopping center.
“I’m assuming that’s the case here,” he said.
Lakeview's next chapter
Bussey said the anchors at Lakeview were busy, but he didn’t know if other tenants were. He also said the mall has needed upgrades for a long time and the previous owner wasn’t willing to go to that expense.
“So I think that GK is going to have to do some things that are interesting,” he said. “They have to do something to create some excitement in there. To me, the inside is about as exciting as going to Rogers Plaza.”
Lakeview Square Mall is 31 years old. It was once owned by General Growth Properties and has emerged from foreclosure. GK Development has been around since 1995 and owns regional malls in Illinois, Texas, Montana and North Dakota and three in Iowa.
“My expectation is GK bought it at a very attractive price and at that price they can afford to make some physical changes to the mall. They can afford to probably give some special deals there for the right tenants — the tenants that would draw in other tenants,” said Bussey.
“They wouldn’t surprise me at all if they’ve created outside interests and added more excitement to the mall.”
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Finite Battle Creek retail
Bussey thinks the sale has the potential to create retail excitement in the city, but at the same time he knows national retailers seem to be locked in on one location, and that mindset could make growing the sector a long and strenuous task.
“Battle Creek is very interesting because I’ve looked for sites for people and have not been able to find them because there just wasn’t anything there,” Bussey said.
“The retail inventory is not expanding. There are people who want to be here, but it’s hard to find the right spot,” he added.
Key retail nodes
Bussey said there are a few retail “nodes,” as he called them, and one is the area around the intersection of Capital and Columbia. “I can’t tell you how many people have told me that they want to be at Capital and Columbia,” he said.
Bussey said that sector has a lot of residential with good demographics surrounding two of the city’s major commercial streets. Locating a store there, though, can be a chore. Bussey said Spartan recently built one in the area but had to buy a lot of individual properties to do so and also had to move a restaurant to another location.
“If you go east on Columbia and you come up to the intersection of Capital, there is a lot of retail right there. But if you go further, it drops off to negligible stuff. There is a strip center that has Office Max and I think a Rite Aid. But it’s had vacancies for years and I don’t know who I would put there if I were going to list it,” he said.
A large strip center at Columbia and 20th has discount tenants, such as Harbor Freight and Dollar Tree; it was half-full when Bussey was trying to convince Sav-A-Lot, a discount grocer, to locate there. “I don’t know of a better place in the city for Sav-A-Lot because their customer is already coming there. Well, unfortunately Sav-A-Lot turned it down,” he said.
Bussey said he also tried to find a spot for a Tim Hortons coffee shop and café in Battle Creek, but was limited in his search because the retailer only wanted to be at Capital and Columbia.
“I found something just a block away that was west of the intersection, which is the only way to go because then you’re going back toward Meijer’s, and they wouldn’t even do that,” he said.
Bussey said another strip center just past Meijer has consistently had vacancies. “It’s like everybody wants to be at the intersection — just like everybody wants to be at the corner of 28th and the Beltline.”
Major retailers have made it clear they want to be at Capital and Columbia, or on Beckley Road — the location of Lakeview Square Mall, or in a small sector just past the mall near Lowe’s, Walmart and Best Buy.