A view outside of part of the American Dream mega mall and entertainment complex in East Rutherford, New Jersey. After more than 17 years, the first phase was finally opened to the public on October 25, 2019.
Timothy A. Clary | AFP | Getty Images
It was Monday March 16 – just three days before dozens of retail stores opened in the American Dream Megamall in New Jersey – when the 3 million square foot complex closed due to the coronavirus pandemic.
The ongoing construction was stopped. Attractions such as a Nickelodeon theme park that opened in the fall and an indoor ski slope that opened in the winter have closed. And a VIP event to celebrate the debut of DreamWorks Animation Water Park has been canceled. The Triple Five Group, the owners of the property, hoped there would be a brief delay – just another in a series of setbacks the project has overcome its almost two decades long history.
On Thursday at 11 a.m., Triple Five will try again.
Almost seven months later, American Dream will finally open its doors to the public. Visitors can purchase tickets to attractions such as a full-size NHL ice rink, indoor ski slope, and Angry Birds-branded mini golf course. A number of retailers including Zara, Lush, Primark, and Aritzia american eagle, will also open there for the first time.
The Covid-19 pandemic has turned the retail sector on its head: it brought dozens of companies to bankruptcy courts and resulted in thousands of layoffs It’Sugar, which is a giant candy store next to American Dream’s water park, filed for bankruptcy last month. A location planned for Barneys New York in the luxury wing of the megamall, which was liquidated after filing for bankruptcy last year, has yet to be filled.
These tenants’ problems affect Triple Five, which also operates the Mall of American in Minnesota.
The owner went out of his way to pay his own bills during the pandemic. Triple Five is more than 90 days behind on its $ 1.4 billion mortgage for Mall of America, according to Trepp, a New York-based research firm that tracks the commercial mortgage-backed securities (CMBS) market . The mall’s value was recently reduced from $ 2.3 billion to $ 1.94 billion, Trepp said. And Triple Five actually used Mall of America, the largest mall in the US, as collateral for an American Dream loan.
Don Ghermezian, American Dream Co-CEO said CNBC in an interview in early AprilShortly after the megamall closed: “The difficulty we have now … If tenants don’t want to pay rent, my answer is, ‘I have to pay a mortgage. I borrowed money. I have to pay back my lenders. ”
A Triple Five spokeswoman told CNBC this week, “We are making positive progress with our lenders and the reopening of American Dream is another step forward.”
With the reopening on Thursday there is hope for new income. The owners of American Dream are counting on restless parents to take their children on roller coasters with masks on for the afternoon. They bet on nearby New Yorkers getting on the train to complete their vacation shopping, albeit socially aloof. New Jersey that is Here are some of the top performing shopping centers in the country, has nothing like American Dream that inspires optimism.
“If you want to go to one place with your family … after Covid, you first want to go to a place where you feel safe,” said Mark Ghermezian, co-CEO of American Dream, during an interview from the complex earlier this week. “Our whole thing is, if we can get people to buy tickets and gain experience, then our shopping and food will flourish.”
Even as Issues are picked up online With a record during the pandemic that spurred new and enduring consumer behavior, American Dream is still heavily reliant on brick and mortar retail. although the mall affects the entertainment more Tenant.
“We believe when you go shopping you are going to a new, fresh, exciting, and different place,” said Mark Ghermezian.
“I think that [pandemic] will only speed up what happens, “he added in retail.” By that I mean that a lot of the C and D player malls or C and D store concepts may not be around for much longer. It accelerates the value of our centers and what we do. ”
Source: Lauren Thomas, CNBC
American Dream will put the Triple Five model to the test for touch-and-feel experiences alongside retail.
“We don’t see ourselves as a shopping center,” said Mark Ghermezian. “We are a target.”
The pandemic has prompted Triple Five to put in place a number of safety precautions. Capacity in the center is capped at 25% to allow social distancing. Face covering is required – unless you are riding down one of the water slides. Visitors to the Nickelodeon Universe Theme Park and DreamWorks Water Park have their temperatures checked by thermal body scanners. The operating hours are reduced. And fresh signage throughout the shopping center will be embellished with the new motto “#DreamSafe”.
The retailers in the Megamall will open on a rolling basis, according to the Ghermezians. The luxury wing, which includes the sprawling Saks Fifth Avenue, Gucci, Hermes and Louis Vuitton department store, is now set to debut in March 2021.
Many of the dining options are still being completed and are expected to open this year or next.
However, the turmoil in the industry continues and is at the same level as it was in 2010 when 48 retailers filed for bankruptcy due to the great recession. according to a report by BDO USA. The service company tracked 18 retailers applying for Chapter 11 protection in the first six months of 2020, followed by 11 more from July to mid-August.
Many of American Dream and Mall of America’s tenants have been looking for rental breaks due to the pandemic that has resulted in prolonged store closings, according to Triple Five. And during The rental collection seems to be increasing againTensions between tenants and their landlords persist across the industry and are likely to last until 2021.
“You have to do them credit”
And just as American Dream reopens to retail Thursday morning, it will face a handful of surrounding malls in New Jersey, including Brookfields Paramus Park and Westfield Garden State Plaza.
“You have overcome a number of obstacles, but you must pay tribute to them as this may be your third attempt,” said Mark Hunter, general manager, retail real estate for commercial real estate services company CBRE. “You have to take a step back and say, ‘There aren’t too many developers out there who have what it takes to pull this off.'”