Manager Claims Nittany Mall Rebounding as Corporate Owner Reaches Deal to Sell Property
UPDATED at Noon, July 1
While the general manager of the Nittany Mall claims circumstances are improving after several stores recently relocated, the mall's corporate owner has reached an agreement to sell the property.
StateCollege.com reported in January that several stores moved out of the mall, many opting for locations in plazas on North Atherton Street. Currently, there are roughly 16 empty storefronts in the mall. However, Nittany Mall General Manager Lou Kanzleiter says the situation has been rapidly changing and rumors the mall is closing are false.
At the same time, Pennsylvania Real Estate Investment Trust, the company that owns the mall property, has executed an agreement of sale with an unidentified company to dispose of two non-core malls -- the Nittany Mall and North Hanover Mall. PREIT also recently sold the South Mall in Allentown for $23.6 million.
Nittany Mall is a 534,000 square foot property anchored by JCPenney, Sears, Bon Ton and Macy's. Sales at Nittany Mall were $230 per suqare foot, according to PREIT.
PREIT says sales at Nittany Mall and the other targeted properties "generally lag" the company's average sales of $377 per square foot and have less than average store occupancy.
Despite the recent news from corporate, Kanzleiter is still touting what he says is progress at the mall.
"Our leasing department continues to actively work to fill the vacancies," he said in an interview last week.
That includes the opening of Francesca's, a women's fashion boutique, near the Bon-Ton anchor store. The 1,000 square foot shop features clothing, shoes, purses, scarves, hats and jewelry. Frencesca's is a privately held company with more than 350 boutiques in 45 states.
Additionally, Planet Fitness is expected to open in the fall, filling the space of five storefronts near Sears for a total of 18,000 square-feet. Planet Fitness is a growing gym franchise that markets affordable membership rates with locations across the country, including in Altoona, Harrisburg and Williamsport.
As part of that project, the Verizon store will be relocated to another space in the mall and Payless shoe store, which temporarily closed, will reopen at a different location within the mall, says Kanzleiter.
Additionally, Kanzleiter says a new store will fill the former CVS Pharmacy location. However, he cannot yet release details on the company that is expected to move in.
Over the course of the past year or so, several stores have left the mall. The list of departing businesses includes Gardners Candies, Kranich's Jewelers, Gap and Gap Kids, Aeropostale, Kitchen Collection and CVS Pharmacy.
The changes were so noticeable some folks in the community speculated the mall would close its doors altogether. Kanzleiter says the rumor is false and the store closures are part of the "natural cycle" of shopping malls.
Larger, anchor department stores do not pay rent for the space they occupy as they are expected to draw in shoppers. The smaller stores lease their space at the mall and subsequently enjoy the benefits of foot traffic the anchor stores create.
Hari Sridhar, an assistant professor of marketing at Penn State, says stores leave a mall for different reasons, such as:
- Spill over traffic does not meet expectations if shoppers go to the anchor stores and then leave the mall and in turn paying rent becomes unproductive.
- Business owners feel their store is now established and can draw its own crowd at its own location.