Ramco-Gershenson Signs Borders Replacement, More

FARMINGTON HILLS, MI-Ramco-Gershenson Properties Trust recently signed three new mid-box leases of about 126,253 square feet, including the quick replacement of a closed Borders bookstore. The leases were signed for empty boxes in Hunter’s Square shopping center here and in Lakeshore Marketplace in Norton Shores, MI.

At Hunter’s Square, the trust signed a lease for buybuyBaby to take over a vacant 29,000-square-foot Borders store that closed in January. Bed Bath & Beyond also expanded its store at the center by more than 10,000 square feet, replacing a dark Petco. The center is now almost 95% occupied.

Dunham’s Sports signed a lease to relocate and expand into a new 38,634-square-foot store within Lakeshore. The sporting goods retailer moved into space formerly occupied by Elder-Beerman, which had downsized and converted their store to Younker’s Furniture. The 20,000-square-foot former Dunham’s space is now available.

Michael Sullivan, SVP of asset management for the trust, said leasing in 2010 was a record year in terms of velocity. “We think Michigan is heating up for large format and mid-box retailers,” he tells GlobeSt.com.

The state’s unemployment figures are starting to improve, down to about 10% from about 13% a year ago, and the gap between the national unemployment average and Michigan’s average is narrowing.

However, the state also was dealt another economic blow recently with 2010 census figures that show Detroit has dropped to less than 750,000 residents, less than half of its peak of 1.8 million people in the early 1900s. Michigan was also the only state to drop in population.  

Regardless, Sullivan said you can’t judge Michigan retail by how Detroit fares. “We’re hopeful that we can demonstrate that we’re back on track to push rents and post gains,” he says.

For one thing, he says owners are learning what retailers want today in a center. “They’re turning more toward at least two mid-box anchored centers, than the traditional grocery-anchored center. Owners are realizing that unless you have the number one or two grocer in the area, you’re taking a risk that your anchor tenant may go out,” Sullivan says.

Also, owners are being more careful about potential losses, such as the Borders and Blockbuster stores. “At Ramco we’ve been marketing those stores for some time. We were marketing our three Borders already, and found a replacement for a closed store in record time, and we have interest in our other currently-open stores in Rochester, MI and Madison, WI. We are also confident we can re-tenant Blockbuster stores if we need to,” Sullivan says.

As for development, there’s not many in the Detroit area who believe there will be any building happening in the next few years. “I’m the eternal optimist, I hope things get back to a newer normal. We need to wait and see, the retailers need to give us the nod. It’s probably going to take three-to-five years,” he says.