The recent sale of three important Upper Valley shopping centers to a Boston-based commercial real estate development and investment outfit is significant for a number of reasons, not least of which is the sale price: a cool $ 27 million.
The properties — the Kmart Plaza and North Country Plaza off Route 12A in West Lebanon and the Miracle Mile Plaza in Lebanon — were owned by the real estate arm of Dead River Co., a Portland, Maine-based company perhaps better known in these parts for its fuel-distribution business. The buyer, The Davis Cos., manages dozens of properties in four states; has residential and commercial real estate-related investments valued at $ 3.7 billion; and has developed more than 3.6 million square feet of commercial space, with a significant emphasis on environmentally sustainable buildings.
The transaction is the latest in a flurry of recent commercial property sales in the Upper Valley’s retail center. In the last year alone, on the Miracle Mile, Flanders and Patch Ford was sold to St. Johnsbury auto dealer John Loschiavo, the Bridgman’s Fine Home Furnishings property was bought by Listen Community Services, Gerrish Honda was sold to Connecticut-based Gengras Motor Cars, and Granite State Harley-Davidson was bought by the Harley dealership in North Hampton, N.H.
It’s easy to be suspicious of such a commercial property feeding frenzy, especially when — as is the case in several of these transactions — it’s folks “from away” who are swooping in and scooping up parts of the Upper Valley.
A more optimistic view, however, is that these purchases may be a sign of renewed strength in the region’s retail sector, which has taken a real beating in recent years — along with retailers around the country — thanks, in part, to wage stagnation and the growth of online shopping. (Another sign: The renovation of the long-vacant Shaw’s supermarket building in the Upper Valley Plaza, soon to be home to four new stores, including PetSmart and HomeGoods.)
The acquisitions also represent a $ 27 million vote of economic confidence in the Upper Valley by The Davis Cos., a 40-year-old company that has some experience in hot real estate markets: As the Boston Globe reported, earlier this year it received approval to build an 800,000-square-foot, 1,000-room hotel complex on the South Boston Waterfront, a $ 550 million project that will boast two 20-story towers, a huge ballroom and, possibly, a skating rink.
There’s nothing quite that grand planned for the three Lebanon shopping plazas. Still, as business writer John Lippman recently reported, the purchase may present an opportunity to remake the plazas for the 21st century — a trend that has been gaining traction around the country as mall operators look for ways to draw shoppers back to their properties.
Diane James, director of marketing and communications for The Davis Cos., told Lippman that, while the current tenants of the plazas — including Kmart, T.J. Maxx, Payless ShoeSource and Hubert’s Family Outfitters — have proven resilient in the face of the digital revolution, the company wants to create a “vibrant up-to-date retail experience” at its new properties and is examining the tenant mix with an eye to “appealing to customers both day and evening as well.”
That’s consistent with the national trend. “The mix of uses at our malls is changing,” Stephen Lebovitz, CEO of Tennessee-based mall owner CBL Properties, told The Associated Press. “It’s becoming less apparel and more dining, more entertainment, more service, more fitness, wellness — the types of categories that are more popular.”
It’s worth noting, as well, that a redevelopment of these properties could include residential uses above the retail areas. Done properly, such a redevelopment could be a win-win: The developer would gain a source of revenue in the form of residential rents and the city would gain some much-needed workforce housing.
No such “densification” plans are in the works as yet, of course, but the potential for high-visibility upgrades in the city’s retail core — especially along Route 12A — is encouraging.
Now, if only someone would do something about that old shuttered Irving Oil gas station on Route 12A.