Moonbeam: Working the Alternatives
By Randall Shearin and Lynn Peisner
Shopping Center Business
Moonbeam Leasing & Management, which is part of the group of companies and handles property management and leasing for its affiliates, is known for its expertise in making underperforming properties come alive again. These days, that result requires more creativity than ever before.
“We take a methodical approach to repurposing a property,” states Steven Maksin, Moonbeam’s chief executive officer. “First, we stabilize the asset. Second, we engage in detailed and thorough market and property analysis. Third, we do a void analysis, to evaluate which uses are missing from the market. Fourth, we collaborate extensively with local government on our strategy. Getting local government on board and cooperating with our efforts to turn a property around for the benefit of the community is essential.”
Moonbeam’s forte is creating and executing successful strategies to revitalize or repurpose underperforming properties. “We have an enviable track record of being able to stabilize an asset, analyze the market, and develop a winning game plan for that asset,” says Shawl Pryor, Moonbeam’s senior vice president.
This is evident across Moonbeam’s diverse portfolio of managed properties, which in addition to malls and shopping centers, includes office buildings, apartments and hotels. Some of the firm’s most recent and visible efforts have included leasing big box and other former retail space to categories of tenants that might have seemed like a stretch 10 years ago, but today are rejuvenating traditional indoor malls.
At West Oaks Mall in Ocoee, Florida, Moonbeam worked with Xerox to remodel a state-of-the-art 70,000-square foot former Sears anchor space into a customer center for the Florida Department of Transportation managed by the Xerox affiliate. SunPass Centralized Customer Service Center will consolidate operations that process more than one billion transactions related to the state’s prepaid toll program each year and manage more than five million accounts. This mixeduse concept with Xerox’s affiliate has set the stage for Moonbeam to look at possibilities for similar repurposing strategies elsewhere.
“A lot of retailers are now involved in online shopping, but even if they may need less brick and mortar space for in-person shopping, they still need space for back-end support,” Pryor says. “By managing so much commercial property, especially shopping malls, we can make those non-retail deals work for them. Malls already have the infrastructure that retailers need for back-end operations, such as high volume parking, which makes the conversion or repurposing of a big box more cost-effective than a build to suit option.”
In addition to online shopping customer support centers and governmental-partnered service providers, Moonbeam also courts community-based tenants, such as gyms, karate studios, tax services and medical users for shorter-term leases to keep shopping malls and centers active and connected to their communities. Moonbeam is currently working on deals to repurpose malls for a $250 million medical office and an 800,000-squarefoot distribution facility. In North Carolina, Moonbeam just signed a national college to occupy 30,000 square feet of space.
While Moonbeam is expanding its reach with non-traditional tenants such as these, it continues to grow the dining, entertainment and retail options at the malls and centers it manages. During the past year and a half at Greeley Mall in Greeley, Colorado, Moonbeam added approximately 14,000 square feet of entertainment users and restaurants, such as Tres Margaritas, as well as national retailer At Home. Maksin says that these successes reinvigorated the mall, which is now 90 percent occupied and seeing increases in rents and tenant sales.
“We have a lot of inventory on our hands,” he says. “We feel the retailers’ pain when a store closes, but if they can’t make it work, we’ll reconfigure the space, find a way to use it for other purposes, and we’ll most likely increase rents and bring vitality and cheerfulness to a center that would otherwise look bleak.”
Managing under-performing malls when the nature of retail is changing requires special qualities and know-how, as well as an experienced and dynamic team. “When it comes to repurposing a mall, you have to have creativity and patience,” Pryor says. “While we’re waiting for markets to evolve, our team is always trying to figure out in the interim how to utilize short-term or special leasing programs so that we’re able to keep bringing in tenants to the shopping malls.”
Moonbeam’s team is vertically integrated, not top-heavy and has the skill sets required to deal successfully with each asset class. Maksin says leasing teams continuously share information on new deals they are working on across the country.
“We’re also bringing in people who are not encumbered by the notion that only retail is retail and office is office,” Maksin says. “We assign and reassign our team members to work on national deals and national tenants so that one person gets an all-round experience nationwide. That enables us to develop a team that is very flexible in its thinking. Instead of trying to fit in a retail tenant that may not want to be in a particular location, our team members immediately think about all of the possibilities, from medical to education to retail and office.”
Moonbeam has a wide range of experts in various fields, employing a financial team, legal counsel, marketing specialists, management and leasing teams. “We’re able to brainstorm and develop alternative uses,” Maksin says. “Mixed use is complicated. You need to understand your leases; you need to understand what restrictions you have in the land itself; you need to understand what you can do to change the use. And once you have the expertise and teams to do it, it’s a great business to be in.” With the experience and strong working knowledge in repurposing properties,
Moonbeam is now setting its sights on advising other companies.
This article originally appeared in the December 2016 issue of Shopping Center Business.
© 2016 France Media, Inc.