Fashion District ‘phenomenal,’ gaining Primark, Sephora, and Kate Spade; Plymouth Meeting to get apartments
"Since our last call, we have changed the face and future of PREIT,” said Joe Coradino, the company’s CEO.
Fast-fashion retailer Primark, luxury cosmetics dealer Sephora, and upscale designer goods maker Kate Spade New York are moving into Philadelphia’s Fashion District.
And soon, apartments will be added to the Plymouth Meeting Mall.
PREIT, the publicly traded real estate investment trust that owns both sprawling shopping centers, made those announcements in a Thursday earnings call with investors.
“Since our last call, we have changed the face and future of PREIT,” said Joe Coradino, the company’s CEO.
The Fashion District opened Sept. 19 after a $425 million redevelopment project inside the former Gallery mall in Center City.
Coradino said retailers at the Fashion District are doing “phenomenal business” although just slightly more than 60% of the stores are open as the Christmas shopping season begins to heat up.
Coradino said 87 percent of current retailers operating in the Fashion District reported “sales ahead of expectations.”
At Plymouth Meeting Mall, Coradino said, the number of visitors has risen 20 percent since new purveyors of goods and services moved into a former Macy’s. Burlington, Dick’s Sporting Goods, Miller’s Ale House, Roll by Goodyear, and Edge Fitness have opened. Scheduled to arrive at the mall in spring 2020 are Michaels, Restored Cryotherapy, and Solar Salon.
“We expect this will be the next property to add an apartment community, further strengthening this award-winning project,” Coradino said of the Plymouth Meeting property.
PREIT suffered through “a challenging year" in 2019. It lost $10 million as it was buffeted by tenant bankruptcies and an “accelerated pace of store closings.”
Coradino mentioned that he was “obviously surprised” by the bankruptcy of Forever 21.
“These tenants can and will be replaced with better merchants,” he said. “But this can’t be accomplished in just a quarter or two. We acknowledge we didn’t predict the pace or level of tenant fallout.”
He said a total of $12 million in signed leases was coming online. Many of those are landing at the Fashion District, which he described as “oversubscribed with prospects.”
Mario Ventresca, PREIT’s incoming chief financial officer, said the company’s Philadelphia properties were “being recognized by multifamily developers” and expected “to document transactions with successful bidders by year-end” for residential development. Coradino said that gains from residential transactions could be worth “north of $100 million.”
PREIT stock has been volatile during the last year, reaching a high of $9.34 in November 2018 and hitting a low of $4.34 in August. It closed Friday at $5.73, up $0.21 or 3.80%.