$125M Retail Redevelopment 65% Pre-Leased

SAN FRANCISCO-The 330,000 sf of new shop space being developed at the Shops at Tanforan mall here is 65% pre-leased, according to mall owner and developer Wattson Breevast. The property will hold its grand re-opening in the fall of 2005.Wattson Breevast is a 50-50 joint venture of Wattson Group and Breevast BV, a Dutch company. Including the cost to purchase the property in 1999, the total cost of redeveloping the Shops at Tanforan is $125 million. Wattson says the project is being financed by Frankfurt, Germany-based Eurohypo, which is providing $94.7 million of the total cost. Breevast is providing the equity component. In February, Wattson Breevast began demolishing the original 295,000 sf of shop space while leaving the existing anchors–Sears, JCPenney and Target–in place and operating. At that time, it had received pre-lease commitments equal to 50% of the new space, and Century Theaters would be the anchor entertainment tenant, having signed a 20-year ground lease for the air rights above the parking garage where the theater will be built.Now, Wattson Breevast says the shop space is now 65% pre-leased, with the newest major tenant being Old Navy, which is part of Gap Inc. Other newly signed tenants include New York & Co., Master Cuts, Regis Salon, Hawaiian Barbeque, Kiddy Candids, Verizon and Thai Soon.When combined with existing anchor Sears, the new Shops at Tanforan will have more than one million sf of shopping, dining and entertainment venues located five minutes from the San Francisco Airport on El Camino Real at I-380. General Growth Properties has the leasing assignment. Wattson Breevast SVP Greg Wattson was not available for comment. In February, he told GlobeSt.com that the competition for the Shops at Tanforan includes Hillsdale Shopping Center, a family-owned property 10 miles to the south, and Serramonte, a center located several miles north of the project that sold last year to London-based Capital and Counties USA. Wattson said he is confident they will pale in comparison to Shops at Tanforan.”What sets us apart is that we are more conveniently located to the I-380, I-280 and Highway 101 and will have a (Bay Area Rapid Transit) station built right into the parking lot, so our ability to attract commuters will be better,” he said. “As well, we will have a cinema, which the other two shopping centers don’t have, and we will have many more restaurants.”