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2017-05-24 / Featured / Real Estate

Regency's retrofit: A model for Chesterfield?

BY RICH GRISET STAFF WRITER


RENDERING COURTESY OF BASKERVILL RENDERING COURTESY OF BASKERVILL At a meeting last week at Henrico’s Regency Square Mall, Rob Hargett, a principal with real estate company Rebkee, announced that Regal Cinemas, Starbucks, Chipotle Mexican Grill, Sprint and other companies were among the new tenants coming to the site.

Rebkee and Thalhimer Realty Partners Inc. purchased Regency Square in February for $13.1 million. It is slated to undergo a $30 million renovation that will demolish a parking deck and create store entrances that face the street and outparcel rows of shops. The addition of multifamily housing is also under consideration. “It’s a great retail location, it’s a great office location, and it’s a great multifamily location,” Hargett told the meeting of the Greater Richmond Association for Commercial Real Estate and the Urban Land Institute at the mall’s food court.

Regency Square is undergoing what’s called a suburban retrofit, a term used for taking aging malls, office parks and other suburban properties and transforming them into more sustainable, urban and mixed-use developments.

Both Regency Square and Chesterfield Towne Center opened in 1975 (back then the latter was the Chesterfield Mall), and the rejuvenation of Regency Square may offer a blueprint for Chesterfield Towne Center in the years to come.

Robert Gibbs, president of Gibbs Planning Group and author of the book “Principles of Urban Retail Planning and Development,” says Regency Square’s strategy may prove successful.

“I have seen those kinds of conversions work,” Gibbs says. “It’s when they turn the mall inside out and put the internal stores on the street.”

As department stores like Macy’s and Sears continue to struggle, Gibbs says the future is grim for the majority of America’s suburban malls.

“There’s about 2,000 of them, and we estimate that about 1,500 of them will close in the next five years, and that’s because they’re depending on department stores to stay open,” Gibbs says. “Without the department stores, it’s really hard to get people to go inside the mall.”

That said, Gibbs says malls in good locations can “right-size,” reducing their retail square footage and bringing in housing, entertainment and office space to create a walkable development where people can live, work and enjoy themselves.

Brian Glass, senior vice president for retail brokerage at Colliers International, says Rebkee and Thalhimer are moving in the right direction with Regency Square, and that the mall’s local ownership is a boon because Rebkee and Thalhimer understand the Richmondarea market.

“All of these stages that they’re taking are good steps,” Glass says. “The tenants that they’ve signed up are good quality tenants – Starbucks, Chipotle, Jumpology, Regal Cinema – they’re all good tenants.”

Traditionally, Glass says the life of a mall is usually about 30 to 35 years.

“Having said that, Chesterfield Towne Center has held its own, and a lot of that has to do with its geographic presence, where it is,” Glass says. “The surrounding area is a very high economic profile, so it supports the mall.”

If done well, Gibbs says a refit of a mall can prove a thriving and profitable investment.

“These old mall sites are really great redevelopment opportunities,” Gibbs says. “I think there’s a lot of promise for them.” ¦

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