Federal Realty plans to redevelop shopping center.
By: Steve Feitl
Mercer Mall, the 410,000-square-foot open air shopping center in Lawrence, was acquired Wednesday by a Maryland real estate group that says it will redevelop the site.
Federal Realty Investment Trust entered into a 25-year master lease with Harry Siegel, managing general partner of Mercer Mall Property Group.
Under the master lease agreement, Federal will pay a fee to Mr. Siegel and in exchange, retain all ownership rights. After 20 years, Federal will have the right to purchase the property for a fixed price of $55 million. According to township records, the 39-acre property has an assessed value of $29.5 million.
Located outside of Washington, the 40-year old real estate company has a business strategy of buying older shopping centers with tremendous upside and enhancing values through redevelopment and other means, according to Kris Warner, director of corporate communications at Federal.
Redevelopment will be a key with the Mercer Mall property, she said. A new supermarket was already under lease prior to the acquisition and Federal hopes to add another big-box retailer to the mall.
"The shopping center is located in one of our primary markets," Ms. Warner said. "We own property in major metropolitan markets with above-average demographics. We already have a major presence in Philadelphia and northern New Jersey, so this fits very nicely into our portfolio."
Mercer Mall, home to such tenants as Bed Bath & Beyond, Kids "R" Us and Ross, is currently 80 percent occupied. The most significant vacancy is the 85,000-square-foot space most recently occupied by Kmart, which closed its doors in March 2002. A ShopRite supermarket is planned for a portion of the area.
Federal anticipates attracting another big-box retailer for the space adjacent to the new supermarket.
Snyder’s Drug Store Inc. announced last month that it would close its Drug Emporium store in Mercer Mall by the end of November. The Mercer Mall location is one of 77 Drug Emporium stores in the chain that are set to close or be sold.