The owners of a major shopping center in Bloomfield have defaulted on their loan, victims of both the long struggle to attract retailers to downtown Bloomfield and the high vacancy rates for retail and office space in parts of Greater Hartford.
The owner’s of the 110,231-square-foot Wintonbury Mall have failed to make payments on the shopping center for about a year, according to Trepp LLC, a New York-based research firm that tracks commercial mortgage-backed securities. And the holders of the property’s securitized mortgage intend to pursue foreclosure proceedings, Trepp said.
The property, whose anchor tenants include a movie theater and Bank of America, is owned by Wintonbury Mall Associates. Privately held real estate firm The Lightstone Group out of New York and New Jersey controls the property located in the center of town at 836 Park Ave.
Officials from The Lightstone Group did not return repeated requests for comment.
Thom Hooper, the economic development director in Bloomfield, said Wintonbury Mall has struggled for years to attract retail tenants. Although the shopping center is located in the middle of town, it’s not on the main thoroughfare off Cottage Grove Road, where about 35,000 people travel each day.
The Wintonbury Mall location sees much less traffic, about 15,000 to 20,000 commuters. That has made the space less attractive, particularly to large, national retailers, Hooper said. The economic downturn hasn’t helped either.
According to Trepp, the property hasn’t been performing well since 2007 due to the slow market, and the $3.7 million owed on the property is due to mature in August.
“The traffic patterns don’t favor as much activity,” Hooper said. “It’s been a difficult property. They are just not able to get retail in there.”
The struggles of Wintonbury Mall reflect a slow recovery of the broader retail sector in Greater Hartford, which saw its retail vacancy rate jump to 13.1 percent in 2010, according to KeyPoint Partners.
And while brokers and developers say they are seeing increased activity compared to a year ago, vacancies remain at elevated levels. New York real estate analytics firm Reis Inc., listed the region’s retail vacancy rate at 10.5 percent at the end of the first quarter of this year, but that figure includes both Middlesex and Hartford counties. At the end of 2010, however, Reis listed the retail vacancy rate of just the central Hartford area at around 15 percent.
A healthy vacancy rate for Greater Hartford is typically between 6 percent and 8 percent, brokers said.
“Retailers are still feeling the effects of the downturn,” said Michael Gallon, the director of brokerage services at Reno Properties Group in Newington. “Consumers still have a conservative attitude.”
Gallon said one of the problems he’s seen is nationally branded retailers that have gone through a repositioning over the past few years, closing poorer performing outlets and reorganizing successful ones.
At the same time, sales still aren’t increasing for many retailers, while operating expenses continue to rise, hitting the bottom lines of retailers both large and small. The extra snowfall this winter didn’t help either, adding even greater unexpected costs for landlords, who passed those expenses onto tenants, Gallon said.
With the larger retailers still sitting on the sidelines in Connecticut, many landlords are focusing on smaller, locally based shops and restaurants, Gallon said. That strategy recently helped fill the 15,000-square-foot Cromwell Avenue Shops shopping center, which sat mostly vacant since it was constructed in 2007.
At the Wintonbury Mall, national retailers are largely nonexistent. Besides a Bank of America office on a pad site and a movie theater, the shopping center is filled with mom-and-pop shops including a bakery and tailor shop, as well as medical offices and small financial services outlets like a State Farm, H&R Block and a small credit union office.
Wintonbury Mall was built in 1972 and sold to its current ownership group about 10 years ago. At the end of 2009, it had an occupancy rate of 74 percent. It is not clear what the current occupancy rate is, but there are several empty spaces on the property.
Nicholas Morizio, the president of Colliers International in Hartford, said he sees things getting better “little by little.” He said he’s seen increased activity among lower priced retailers like Family Dollar, which has opened a few new outlets in the state recently.
Morizio also helped broker a recent sale of the 58,634-square-foot Filley Pond Plaza in Bloomfield, which is located less than a mile away from the Wintonbury Mall. The plaza was purchased by New York real estate firm DeLaurentis Management Corp. for $4 million.
Morizio said that center underwent significant renovations in recent years, and is now fully leased, except for a pad site. That’s an improvement. Three or four years ago, he said, the center was three-quarters empty.
Nationally, the retail scene for malls and shopping centers hasn’t been pretty either. In the top 80 U.S. markets, mall vacancies hit their highest level in at least 11 years in the first quarter at 9.1 percent, according to Reis Inc. Meanwhile, the vacancy rate for U.S. strip malls and neighborhood shopping centers is expected to hit 11.1 percent later this year.
Blue Back Square in West Hartford has about six empty storefronts right now, said Barbara Lerner, the property’s project marketing manager. The National Jean Co. recently closed its 4,100 square foot space because of declining sales and the occupancy rate for the retail portion of the center is 92 percent.
Lerner said she is seeing increased activity, and Blue Black could actually be 100 percent full if they can sign leases with interested restaurants. But Lerner said Blue Back is trying to attract more retailers to preserve a good mix of businesses. And her team is in negotiations with three different companies. “I think the market is beginning to open up,” Lerner said.
Westfarms mall in Farmington is bucking the national trend with an occupancy rate in the high 90s, said the mall’s general manager Kevin Keenan. The mall, which has about 160 retailers, announced four new store openings this year including Urban Outfitters, Anthropologie, True Religion Brand Jeans and Free People.
Keenan said occupancy at the mall has stayed relatively high throughout the recession, a sign Westfarms has remained an attractive site for large, national retailers that have largely been cutting back on stores over the last few years. He said the mall will likely announce three or more new tenants in the coming weeks.
