Polaris Fashion Place owner shining bright following bankruptcy
Jim Weiker, Columbus Dispatch
Updated 4 min read
Sales at Polaris Fashion Place mall in Columbus have exceeded pre-COVID levels, according to the mall's Columbus-based owner, WPG.
After a nearly fatal bout with COVID-19, the Columbus-based owner of Polaris Fashion Place has recovered, with new financing, a stronger lineup of shopping centers and sales exceeding pre-pandemic days.
“We are now in the strongest financial position in the history of our company,” said Chris Conlon, chief executive officer of WPG (formerly Washington Prime Group). "Since COVID, for the malls we own, we're seeing rent growth, sales growth, and foot traffic growth quarter over quarter."
"Since then, we've totally transformed the company," he said. "We rebuilt the management team, replacing seven of nine senior executives at the company, and we sold off properties that are non-core."
WPG went from more than 100 shopping centers to 78 today, shedding older and poor-performing sites. Among Ohio properties it sold were Indian Mound Mall in Heath, the Dayton Mall, and New Towne Mall in New Philadelphia.
"We chose to refine the portfolio in terms of its quality," Conlon said. "The malls and centers we own today is a much higher quality portfolio."
WPG held on to five Ohio centers including Polaris Fashion Place, the Mall at Fairfield Commons outside Dayton, and Great Lakes Mall in Mentor.
The smaller but stronger lineup has performed well, as consumers returned to indoor, brick-and-mortar shopping.
According to a June report by Coresight Research, last year saw more store openings than closings for the first time since 2016. Sales at malls grew more than 11% in 2022 to nearly $819 billion, even though malls account for a shrinking share of U.S. retail space.
At top-tier malls, traffic was up 12% in 2022 over pre-pandemic 2019 levels, according to Coresight.
"The post-COVID tailwinds in physical retail has been quite extraordinary," Conlon said. "There's a new appreciation with the consumer for new physical retail. In our open-air centers, we're achieving sales, foot traffic and rents that far exceed, far exceed, pre-COVID levels, and in our enclosed malls, we're achieving growth in those properties for the first time in the last six or seven years."
Sales at Polaris Fashion Place mall in Columbus have exceeded pre-COVID levels, according to the mall's Columbus-based owner, WPG.
Conlon said sales at Polaris in particular are "significantly higher than they were in 2019" before COVID temporarily closed the mall and sent consumers nationwide to online shopping.
"Foot traffic at Polaris has returned, but is more or less the same, but sales are higher," he said. "Some of that is inflation, but the average ticket per visitor is higher. When people come to the mall, they buy more."
According to WPG, Polaris draws more than 10 million shoppers a year, who stay an average of 83 minutes.
WPG's stronger portfolio and performance has allowed it to refinance the debt it took on when it emerged from bankruptcy. Under a deal announced last week, WPG closed on a $1.005 billion mortgage that eliminated other corporate debt and "substantially reduced" the company's borrowing costs. The loan is secured by 38 of WPG's open-air retail centers with 8.5 million square feet in 15 states. WPG says the deal is is the largest securitized retail financing so far in 2023.
“This transaction refines WPG’s position in the capital markets and reflects the success of the company’s operational transformation over the last two years," said Jonathan Waggoner, co-head of the North American Operating Team at WPG's owner, SVP. "A transaction of this size underlines WPG’s status as a top-tier owner of highly desirable shopping centers across the country.”
Conlon noted that the refinancing "allows us much more flexibility in how we operate the portfolio."
WPG has invested close to $200 million in its properties since emerging from bankruptcy, according to Morningstar.
At the same time, the company, like other shopping center operators, has broadened its tenant mix beyond traditional clothing stores.
"One of the fascinating things over the last 10 years is the acceptance of retailers to have non-retail uses on the property, such as multifamily, to keep them vibrant," Conlon said.
Customers line up outside the Apple Store at Polaris Fashion Place in June, 2020.
Polaris, for example, includes Fieldhouse sports center; COhatch co-working space; an Apple store; and All In Adventures escape room. Polaris is "looking to add some very exciting retailers over the next few months," said Conlon, without providing details.
"I've been doing this over 30 years; retail is a constantly evolving real-estate sector, things are always changing," Conlon added. I don't know what a perfect tenant mix is, but it's certainly evolved over time. It could have offices, multi-family, sports facilities."
