Developer Wants to Lure Top-Tier Retailers to Ft. Collins Mall
The real estate development company that bought the aging Foothills Mall in Fort Collins has said it wants to attract high-end retailers and plans to charge top rents.
KUNC’s Erin O’Toole talks with Northern Colorado Business Report Publisher Jeff Nuttall about their odds of achieving both goals.
Erin O’Toole: So, Jeff, what exactly are these developers looking to accomplish once they renovate the mall?
Jeff Nuttall: Alberta Development Partners is looking to fill the mall with higher-end retailers, after it spends about $100 million redeveloping the mall, in time to open for the holiday season in 2014. It already said that some of the current tenants and nearby stores don’t meet the criteria for the retailers it wants.
In October, Alberta founder Don Provost told a gathering of real estate agents in Fort Collins that retailers looking to locate within Foothills will be expected to pay rents on-par with those paid in larger markets like Denver.
O’Toole: Do we know specifics about what rents they might be looking to charge?
Nuttall: Not yet. Since the eventual opening of the mall is still two years away, it’s hard to say. But we do know what the average rent is in some of the other markets in which Alberta has developed malls. For example, in central Denver, rents were about $15.20 per square foot this year. At the same time, Northern Colorado average retail rents sat at about $12.30 per square foot.
O’Toole: So we’re talking about a difference of about $3 per square foot. Are those rents considered high by industry standards?
Nuttall: Yes, but the important thing to remember is that the average rent includes all kinds of retail space, the good, bad and ugly. But if you look at a retail center like the Marketplace at Centerra in Loveland, you’ll see much higher rents. There, they can go as high as $33 to $36 a square foot.
O’Toole: Wow. What kind of amenities would make a retailer want to pay higher rent?
Nuttall: The first thing a retailer notices is how visually appealing a shopping center is. Aesthetics are critical, especially to higher-end retailers, as is the location of a shopping center. Alberta’s plans include many upgrades to the visual appeal of the mall.
Among other things, the company wants to revamp the mall from the inside out, redesigning the interior by adding windows and bumping up the height of the ceilings, as well as adding things like fountains to the outside. That’s all going to cost a lot of money.
O’Toole: I'm sure! What about the location of the mall? Is that a factor?
Nuttall: Yes, it sure is. But Foothills has always been in a strong location. It sits right in the middle of the largest city in Northern Colorado. And Fort Collins is focused on cleaning up the area known as midtown - which, of course, the mall sits in the middle of -- by 2014, the same time the renewed mall should be opening.
O’Toole: Jeff, cleaning up and renewing and renovating is all well and good – but has the economy recovered enough that retailers are willing to expand?
Nuttall: Well, for certain retailers, yes. And if a shopping center has high enough sales, it can attract some pretty nice retailers. If you look again at the Marketplace at Centerra, it’s a good example. Right now, it is at 99 percent occupancy and its management is considering building more space to keep up with demand. The bottom line on this - is it all depends on putting together what the real estate folks call “a quality asset.”