DDR’s Puerto Rico Retail Properties Get $90M Upgrade
- Jan 17, 2013
Bayamon, Puerto Rico—Leading shopping center owner and manager DDR Corp. has announced it will continue the successful redevelopment and expansion activity at four selected properties across Puerto Rico due to strong tenant demand and lucrative previous projects. As a result, the initially $50 million redevelopment program has received a budget increase of $40 million.
Targeted retail assets in the redevelopment program are Plaza Fajardo, located in the town of Fajardo, Puerto Rico’s recreational boating hub, Plaza del Norte, found in Hatillo, on Puerto Rico’s north coast, as well as Plaza del Sol and Rexville Plaza, both located in Bayamon, the island’s second largest city.
“Increased demand for quality retail space in this supply-constrained market has created unique value-add opportunities in many of our most productive assets,” Paul Freddo, senior executive vice president of leasing and development for DDR, says, adding the following: “By executing our strategic redevelopment plan, we are creating attractive opportunities for our key domestic tenants to establish or expand their presence on the island.”
DDR’s redevelopment program includes a two-phase project at the 690,000-square-foot Plaza del Sol, the Walmart- and Home Depot-anchored enclosed mall. The projects first phase saw the relocation of the 10,500-square-foot food court from the mall’s lower level to the upper level, thus improving the merchandising offering and credit quality of food court tenants. Furthermore the now vacated and highly trafficked space on Plaza del Sol’s lower level will allow the creation of 25,000 square feet of new in-line retail space. Future tenants Victoria’s Secret, Sketchers and Claire’s will joining existing tenants such as Bed Bath & Beyond, Old Navy and Caribbean Cinemas. Phase two of del Sol’s redevelopment will add 137,000 square feet of gross leasable area. Expected to complete in fall 2014, the expansion will accommodate an anchor tenant’s expansion, as well as additional junior anchor space. Plaza del Sol has a trade area population of 1,061,100 and 368,100 households. The 1998-built property was purchased by DDR in 2005. It is located in Bayamon.
Also located in Bayamon is Rexville Plaza, a 131,058-square-foot community center, which increased its net operating income (NOI) by 10 percent with the addition of two new tenants (CVS and Marshalls) that replaced an underperforming tenant. Not only did the move increase Rexville’s NOI, it also improved the credit quality of cash flow. Rexville Plaza has trade area population of 616,900 in 202,400 households. It opened in 1980. DDR purchased Rexville Plaza in 2005.
Located on the island’s north coast, in the town of Hatillo is Plaza del Norte, a 680,000-square-foot enclosed mall anchored by Walmart. The redevelopment process consolidated three vacant shops to accommodate new tenant PetSmart and a new Caribbean Cinemas Theater. The creation of a new outparcel brought in a Krispy Kreme lease set to open fall 2013. After various renovations and upgrades new retailers, such as Van Heusen, Shoe Carnival and Carter’s joined existing tenants Sears, JCPenney and T.J.Maxx. Opened in 1992 and acquired by DDR in 2005, Plaza del Norte sits in a trade area of 159,200 households populated by 480,800.
The final asset included in DDR’s redevelopment plan is Plaza Fajardo. The 251,268-square-foot enclosed mall is located in Fajardo, Puerto Rico’s recreational boating hub, in a trade area of 80,600 household and a population of 250,700. Work at the Walmart- and Econo Supermarket-anchored mall includes the addition of two new box spaces for retailers PetSmart and Shoe Carnival, expected to open fall 2013. DDR acquired the 1992-built property in 2005.
Headquartered in Beachwood, Ohio DDR, a self-administered and self-managed REIT operating as a fully integrated real estate company, owns and manages 459 value-oriented shopping centers in 39 states, Brazil and Puerto Rico. Its 116 million square feet of assets are located high barrier-to-entry markets with stable populations and high growth potential. In Puerto Rico, DDR owns and manages 15 assets.