The new owners of a Westbury, N.Y., mall are getting creative with their tenant mix, looking beyond traditional retail stores to a novel occupant: manufacturers’ showrooms for the home furnishings industry.
China Lesso Group Holdings Ltd., a Chinese building materials company, is betting more than $100 million on its unconventional plan to bring foot traffic back into a languishing Long Island shopping center. Like many mall owners around the country, it hopes to circumvent an increasingly outdated retail model that relied heavily on department store anchor tenants in order to stay afloat.
Lesso purchased the property — formerly home to the Mall at the Source, as well as Fortunoff jewelry and furniture stores — for $92 million last year, a fraction of the $178 million the mall was appraised at in 1998 when it was built by Simon Property Group. The discount reflected the shopping center’s financial precarity: in 2009, it lost all three of its anchor tenants in one fell swoop with the closures of Fortunoff, Circuit City and Steve & Barry’s, and smaller tenants like Forever 21, Saks Off 5th and Nordstrom Rack followed suit not long after, leaving the property mostly vacant. (This month, research firm Reis Inc. reported that U.S. mall vacancies rose to 8.6 percent in the second quarter, the highest level since 2012.)
The Hong Kong-based company plans to revitalize the mall with a $25 million renovation, however, adding green space, food trucks, an updated façade and, most crucially, a marketplace for Chinese and international manufacturers to showcase wares like faucets, light fixtures and flooring to professionals in the homebuilding industry.
Watch on FN
The property will also house a co-working space to serve interior designers and will continue to lease to consumer-facing retailers and existing tenants like Cheesecake Factory and P.F. Chang’s in hopes of drawing in a mix of visiting trade and local shoppers.
The newly renamed Lesso Home New York Market is expected to be complete in early 2019, followed by similar projects throughout the U.S. and eventually internationally.
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