At New Jersey Mall, Sears Closing, New Multiplex Crystallize Retail’s Changes

At New Jersey Mall, Sears Closing, New Multiplex Crystallize Retail’s Changes

Presented as a public service by Joe Peters of Coldwell Banker

Iconic Department Store Was an Original Anchor at Willowbrook, a 50-Year-Old Shopping Destination in Wayne

The transformation of the American mall away from retailing is now playing out in one of the most concentrated areas for these shopping centers, northern New Jersey. One of that area’s oldest regional malls is seeing change stemming from the woes of Sears Holdings.

The Sears department store at the shopping destination is closing, and a multiplex theater is set to open this summer, occupying the former site of the iconic retail chain’s auto center. It’s the latest evidence in the Garden State of brick-and-mortar retailers struggling to adapt to changing consumer habits and drive foot traffic to offset the rise of online shopping.

The landmark Sears, one of the original anchors at the 50-year-old Willowbrook Mall in Wayne, New Jersey, will be shut in mid-September, according to a company spokesman. The store this past weekend began a liquidation sale. Signs inside tell shoppers, “Nothing held back” and “Everything must go.”

Cinemark Holdings is scheduled to open a free-standing 12-screen, 44,000-square-foot movie theater at Willowbrook. The project’s contractor, Graycor Construction of Oakbrook Terrace, Illinois, said this week it is “currently ahead of schedule on the auditoriums and looks forward to finishing theater construction in time for a grand opening later this summer.”

Long-beleaguered Sears has closed many stores across the nation. The Willowbrook Sears isn’t the first department store to vacate a New Jersey mall and it likely won’t be the last.

A large J.C. Penney store closed at the Westfield Garden State Plaza mall in Paramus, New Jersey, about a year ago. The space will be divided to accommodate a number of smaller shops. And the Sears that was once an anchor of the Paramus Park mall is being replaced by the regional grocery chain Stew Leonard’s.

The Willowbrook Sears apparently isn’t the only longtime regional mall anchor Sears that will close in mid-September. The retailer’s location at the Staten Island Mall in New York, a tenant for 46 years, will also be shut, according to the Staten Island Advance.

“What is happening to the Sears space is indicative of what we are seeing all across the country,” Chuck Lanyard, president of retail brokerage The Goldstein Group, said in an email about Willowbrook.

“Major malls continue to have stores going dark at an alarming rate and their existence is threatened. As these big boxes such as Sears, J.C. Penney and Kmart, etc., all continue to be phased out, replacing these large spaces will continue to be a challenge. As for the Sears Wayne space, we will see efforts to find replacement tenants that are more in tune to today’s consumers.”

Lanyard said he expects not only movie theaters, but other entertainment and experiential retailers offering activities such as bowling, trampolines and indoor snow skiing to enter malls for the first time nationwide. He mentioned children’s learning centers focused on STEM (science, technology, engineering and mathematics) as an option.

“There are also prime international retail tenants such as Primark, Tesco, Muji and MCM, which could be possible tenants for the space,” said Lanyard, whose firm is based in Paramus, New Jersey.

Hoffman Estates, Illinois-based Sears Holdings filed for Chapter 11 bankruptcy protection last October. Edward Lampert, the company’s billionaire former chairman, subsequently formed Transform Holdco as a vehicle to take some 400 Sears and Kmart stores out of bankruptcy earlier this year.

“Transform Holdco was not able to reach a satisfactory agreement with the landlord of our Sears store in Wayne, New Jersey, and thus decided not to acquire the current lease for the store,” a Sears Holdings spokesman said in an email.

The number of employees who will lose their jobs at the Willowbrook Sears isn’t available, he said.

Sears’ place and role over time has dramatically diminished at Passaic County’s shopping mecca and its footprint has been significantly downsized. In 2018, Dave & Buster’s, a Dallas-based chain of restaurant/arcades, took over about 48,000 square feet of Sears’ former space. In addition, that Sears at one time not only had a separate auto center, but also an outdoor garden center. Both closed several years ago.

Brookfield Properties, Willowbrook’s owner, didn’t respond to a request for comment.

The mall during its half-century life has undergone a series of renovations and upgrades, with the most recent one from 2015 to 2016. Improvements included a revamped food court. The mall has 1.5 million square feet and about 150 retailers, including Bloomingdale’s, Lord & Taylor and Macy’s.

Retail brokers say mall landlords sometimes welcome the exit of large department stores that have been tenants for a long period of time, since such stores are often paying low rents. Their departures allow landlords to carve up their space and lease it at higher prices.

Cinemark, headquartered in Plano, Texas, is a domestic and international movie exhibitor that operates 547 theaters with 6,051 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries.

In addition to working on the Willowbrook movie theater, Graycor just completed a multiplex in Watchung, New Jersey, for Cinemark, constructing the shell and interior fit-out of the 37,630-square-foot, 10-screen building with 892 heated recliner seats.


Presented as a public service by:

 

Seniors Are on the Move in the Real Estate Market

Seniors Are on the Move in the Real Estate Market

Presented as a public service by Joe Peters of Coldwell Banker

Did you know August 21st is National Senior Citizens Day? According to the United States Census, we honor senior citizens today because,

 “Throughout our history, older people have achieved much for our families, our communities, and our country. That remains true today and gives us ample reason…to reserve a special day in honor of the senior citizens who mean so much to our land.

To give proper recognition, we’re going to look at some senior-related data in the housing industry.

According to the Population Reference Bureau,

The number of Americans ages 65 and older is projected to nearly double from 52 million in 2018 to 95 million by 2060, and the 65-and-older age group’s share of the total population will rise from 16 percent to 23 percent.”

Seniors Believe in Homeownership

In a recent report, Freddie Mac compared the homeownership rates of two groups of seniors: the Good Times Cohort (born from 1931-1941) and the Previous Generations (born in the 1930s). The data shows an increase in the homeownership rate for the Good Times Cohort because seniors are now aging in place, living longer, and maintaining a high quality of life into their later years.Seniors Are on the Move in the Real Estate Market | MyKCMThis, however, does not mean all seniors are staying in place. Some are actively buying and selling homes. In the 2019 Home Buyers and Sellers Generational Trends Report, the National Association of Realtors® (NAR) showed the percentage of seniors buying and selling:Seniors Are on the Move in the Real Estate Market | MyKCM

Here are some highlights from NAR’s report:

  • Buyers ages 54 to 63 had higher median household incomes and were more likely to be married couples.
  • 12% of buyers ages 54 to 63 are first-time homebuyers, 5% (64 to 72), and 4% (73 to 93).
  • Buyers ages 54 to 63 purchased because of an interest in being closer to friends and families, job relocation, and the desire to own a home of their own.
  • Sellers 54 years and older often downsized and purchased a smaller, less expensive home than the one they sold.
  • Sellers ages 64 to 72 lived in their homes for 21 years or more.

Bottom Line

According to NAR’s report, 58% of buyers ages 64 to 72 said they need help from an agent to find the right home. The transition from a current home to a new one is significant to undertake, especially for anyone who has lived in the same house for many years. If you’re a senior thinking about the process, let’s get together to help you make the move as smoothly as possible.


Presented as a public service by:

 

 

Housing Supply Not Keeping Up with Population Increase

Housing Supply Not Keeping Up with Population Increase

Presented as a public service by Joe Peters of Coldwell Banker

Many buyers are wondering where to find houses for sale in today’s market. It’s a true dilemma. We see an increase in buyer demand, but the supply available for purchase isn’t keeping up.

The number of new housing permits issued prior to the great recession increased for 15 years until 2005 (from 1.12 million in 1990 to a pre-recession peak of 2.16 million in 2005). According to Apartment List,

From 1990 to 2005, the number of single-family permits issued more than doubled, while the number of multi-family permits grew by 49 percent.

When the housing market crashed, the number of new homes permitted decreased to its lowest level in 2009 (see below):Housing Supply Not Keeping Up with Population Increase | MyKCMSince then, supply and demand have been out of balance when it comes to new construction. According to the same report,

Construction of single-family homes has recovered much more slowly — the number of single-family housing units permitted in 2018 was barely half the number permitted in 2005.”

Why is new construction so important?

As the U.S. population increases, there is also an increase in the need for new homes. Today, new construction is not keeping up with the increase in the nation’s population. The report continues:

“The total number of residential housing units permitted in 2018 was roughly the same as the number permitted in 1994, when the country’s population was 20 percent less than it is today.”

Essentially, the dip in home building coupled with the steadily increasing U.S. population means there is now a selling opportunity for homeowners willing to list their current houses.

Bottom Line

If you’re considering selling your home to move up, now is a great time to get a positive return on your investment in a market with high demand. Let’s get together to determine the specific options available for you and your family.


Presented as a public service by:

 

 

Sellers: Now Is the Time to Buy!

Sellers: Now Is the Time to Buy!

Presented as a public service by Joe Peters of Coldwell Banker

Falling interest rates coupled with increasing inventory create the ideal market to find the home of your dreams. There’s no time like the present to move up! Let’s get together to discuss your options.


Presented as a public service by:

 

Fed Rate Cut Good for Housing

Fed Rate Cut Good for Housing

Presented as a public service by Joe Peters of Coldwell Banker

Reposted from nahbnow.com

In a policy change widely expected and good for housing and home building, the Federal Reserve today reduced its key, short-term federal funds rate by 25 basis points to a top rate of 2.25%. The housing sector continues to face affordability headwinds, and today’s action by the Fed will help by reducing borrowing costs.

The evolution of the central bank’s policy over the last three quarters is an important reason why mortgage interest rates have declined from late-2018 cycle highs. Given that the housing market faced a 10-year low for housing affordability last fall, the Fed’s approach is a net positive for future housing demand and home construction, while offering an offset (but only a partial one) for rising construction costs.

These costs are limiting housing inventory, particularly at the entry-level market. Moreover, higher production costs have caused housing affordability to decline in recent years and are the primary driver for NAHB’s estimate for generally flat conditions for new home sales and starts in 2019.

With respect to the overall economy, the Fed characterized the labor market as “strong,” with economic activity rising at a “moderate” rate. This mirrors the home building economic perspective of a slowing overall economy, ongoing labor shortages, and late cycle concerns over housing affordability. The Fed noted that “business fixed investment has been soft,” and the housing market has mirrored that trend in recent quarters.

Inflation was described by the Fed as running below its target rate of 2%, suggesting the central bank has policy room to maneuver to reduce rates if the economy continues to slow. That said, additional rate cuts in the near-term are not guaranteed. Indeed, NAHB believes some investors are being too aggressive with an expectation of 75 basis points of rate reduction over the next few quarters.

The NAHB forecast includes an additional 25 basis point cut in the Fed funds rate late in 2019 given muted inflation and slowing growth. The late cycle housing market soft patch that began during the second half of 2018 provides clear evidence of ongoing macro risks, with residential fixed investment down for the last six quarters.

 

 

Presented as a public service by: