Property owner Pennsylvania Real Estate Investment Trust Inc. didn't disclose the value of the lease. But area brokers familiar with the suburban Minneapolis retail submarket tell GlobeSt.com on condition of anonymity the lease has an estimated aggregate value of $7.3 million based on an average $15-per-sf rent over the life of the contract.
In addition to welcoming the first Best Buy store in the Florence region, PREIT also announced plans to add an additional 18,000 sf of specialty stores and a new food court to the single-level regional mall.
Retrofitting the former Rose's Department Store space for the Best Buy store is expected to commence in May and finish by December.
PREIT estimates its additional capital investment in the property at $10 million. That number includes the cost to reconfigure the Rose's space, construct Best Buy, create the food court and renovate the mall concourses and entrances.
PREIT projects a free and clear yield of 11% on its $10 million investment.
PREIT is also redeveloping the 22-year old Commons at Magnolia across the street from Magnolia Mall. The REIT previously signed Target to a 126,200-sf lease for an estimated 15 years at an estimated aggregate value of $28.4 million, area brokers familiar with the deal tell GlobeSt.com on condition of anonymity.
Target opens in July. Like Best Buy, Minneapolis-based Target is new to the region.
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