Peel Back the Walls Hanover Property Overdue for a Makeover

Established 1872 Reprinted from July 30, 2018 www.BankerandTradesman.com

THE FINANCIAL SERVICES AND REAL ESTATE WEEKLY FOR MASSACHUSETTS

SHOPPING SHIFT

MALLS Peel Back the Walls Hanover Property Overdue for a Makeover

BY JAY FITZGERALD The phenomenon has mostly been how to shop,” says Lloyd Sova, vice SPECIAL TO BANKER & TRADESMAN focused inside Route 128. president of PECO Real Estate Prop- Now the owners of the Hanover erties (PREP), which purchased the re we entering phase two of the Mall on the South Shore are mov- 47-year-old Hanover Mall two years live-work-play phenomenon ing ahead with a plan to reinvent ago for $40 million. “We’re respond- Asweeping the development in- the 1970s-era property. It could be a ing to that shift.” dustry in Eastern Massachusetts? harbinger of more redevelopments In the case of the Hanover Mall, From the transformation of Burl- stretching toward the outer suburbs, it’s a more radical shift than other ington’s Northwest Park with its 3rd prompted by the online shopping recent mixed-use redevelopment Ave. outdoor shopping center to the revolution that’s caused older shop- projects: At a cost of $225 mil- ground-up construction of Somer- ping malls and big-boxig-box llion,ion, PREP plans to de- ville’s Assembly Square, the region stores to struggle. After buying the mmolisho most of the has seen multiple arrivals of mixed- “There’s been ann Hanover Mall two years ago 7750,000-square-foot for $40 million, PECO Real Estate use developments including retail overall mind shift Properties plans to add housing and enclosed mall, and housing in close proximity. on how to live and replace the 49-year-old enclosed Continued on Page 2 mall with an open-air shopping center and 300 apartments.

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keeping only a portion that now holds a “It’s something that’s very desirable 45,000-square-foot45,000-square-foot facility outbuilding, is also Macy’s store. A 620,000-square-foot open-air today,” he said of transforming shopping bbeingeing re-purposed, VauVaughanghan said. shopping center would be built on the site, malls into mix-used developments. “It’s a big Plans submitted to the BurlingtonBurlington plaplan-n- similar to the replacement of the enclosed change from the past.” ning board call for its replacement with a Shoppers World in Framingham with an out- Mark T. Vaughan, a commercial real es-es- 35,000-square-foot buildingbuilding with nine stores door shopping center in the 1990s. tate attorney at Riemer & Braunstein, agrees aandnd five restaurants with seating capacity foforr changes are in store for most brick-and-mor-brick-and-morr- 316 patrons, in addition to 157 patio seats. Shoppertainment Comes to Hanover tar shopping meccas. TThehe former Sears store will be repositioned Reflecting the latest thinking in retail de- “The retail landscape has certainly be-be- with 124,299 square feet of retail space and velopment, PREP plans to add a significant come more challenging,” said Vaughan. 3939,011,011 square feet reserved for restaurantsrestaurants,, dose of restaurants and entertainment facili- “Shopping malls are trying to be more cre-cre- aalonglong with 335 outdoor patio seats. ties (including a rebuilt 1,000-seat movie the- ative and innovative, more of a social-gather-social-gatherr- And Woburn Mall owner Edens, a South ater) – and 300 “high-end luxury” apartments, ing place.” Carolina-based retail developer, is seeking mostly one- and two-bedroom units, with 10 Vaughan’s firm represents several major to build several hundred multifamily units in percent of the dwellings designated as afford- retailretail llandlordsandlords in tthehe reregion,gion, incincludingluding the rear parking lot while partially redevel- able. The Hanover Co., located in Houston, Simon Property Group, owner of the Bur-Burr- oping the mall interior. Texas, is leading the residential component lingtonlington Mall, and Eden LLC,LLC, owner of the Rob Robledo, a senior vice president and of the Hanover Mall redevelopment. The mall Woburn Mall. Both malls are planningplanning majormajor partner who heads the suburban retail group is being rebranded as “Hanover Crossing.” makeovers.makeovers. at CBRE in Boston, sees more changes in the The project is still going through the town The BurlingtonBurlington Mall’s plans are not as works for the region’s shopping malls. approval and a public hearing process. Sova radicalradical as what’s pplannedlanned at Hanover Mall – In particular, he sees more re-develop- said there’s “not a whole lot of opposition,” but they still represent bigbig chanchanges.ges. The first ment of struggling malls outside of 128 and although a planning board member had ex- floor of the former SearsSears building is being re- even 495, specifically what he calls “C and D pressed concerns about potential drains on configuredconfigured into a more outward-facingoutward-facing ffacil-acil- class” malls in less populated towns. town services. ity,ity, complete with an “outdoor pocket park” “They have to make them more viable,” he Whether the current proposal moves for- andand patio fforor proprogramminggramming anandd cacafes,fes, as part said. “They need to re-invent themselves. It’s ward, Sova said a makeover is needed be- ofof an attemattemptpt to makemake it more attractive anandd definitely a trend. They need to change.” cause of market forces that are changing the accessible.accessible. nature of shopping. The former SearsSears Auto Center,Center, a separate Email: [email protected]

Reprinted with permission of Banker & Tradesman. This document may constitute advertising under the rules of the Supreme Judicial Court of Massachusetts.