Developer Spending $275M Renovating TX Plaza to Attract Luxury Retailers
New York, NY, July 2, 2024-"A Texas developer is spending $275 million on one of America’s oldest shopping centers, betting that he can tap in to booming demand for luxury goods by overhauling the more than century-old Kansas City, Mo., property,” reports the Wall Street Journal.
“Country Club Plaza, which spans 15 blocks and a million square feet of retail and office space, was one of the country’s first suburban shopping centers. Most every customer arrived by car, which was still a nascent form of transportation when the shopping center opened in 1923.
“HP Village Associates purchased the shopping center last week for $175 million, according to a person familiar with the matter. The Dallas-based property developer plans to spend a further $100 million on renovations and bringing in new high-end tenants.
“That price represents a deep discount from the $660 million that mall operators Macerich and Taubman Centers jointly paid for the shopping center in 2016. They defaulted on a $295 million loan on the property last year. Nearly a quarter of its retail space now sits vacant after a period of underinvestment and new competition.
“‘I’ve never seen this many empty stores,’ said Michael Naumov, whose family has run Larissa’s Plaza Tailor Shop in the shopping center since 2001. ‘We’re all hoping that they will bring some of the nicer stores in here.’
“Ray Washburne, president of HP Village Associates, said that even the country’s oldest retail properties have the potential to be reborn if they are well-located and can attract big spenders. Country Club Plaza sits near several affluent Kansas City neighborhoods and draws shoppers from cities as far away as Omaha, Neb.; Tulsa, Okla.; and St. Louis.
“Washburne plans to revive the shopping center with a mix of luxury stores as well as higher-end restaurants operated by renowned local chefs.
“European fashion brands such as Dior and Hermès are tenants at some of his other properties, and he said he expects to lure names like this to Country Club Plaza.
“The shopping center currently has a handful of luxury tenants, such as Tiffany and Swarovski. But there are far more midprice retailers, such as H & M, Old Navy and Pandora.
“‘We’ve had conversations with a vast array of luxury brands and they’re all highly interested in coming in if we do the improvement plan that we say we’re going to do,’ Washburne said.
“U.S. luxury retail sales have been growing since the onset of the pandemic and are believed to have reached a record $75 billion in 2023, according to real-estate firm JLL. The sector is less vulnerable than other types of retail to online shopping, because many customers prefer to shop in person for expensive watches and clothing.”