Penn Square Mall Update

[Patrick]

Here's the latest on Penn Square Mall:

1. As most of you know, Coach and Apple will be sharing the old Lane Bryant space on upscale row. LB has now moved to their temporary facility near JC Penney. They will be locating on the Foleys wing, upper level!

2. Elephant Bar signed a lease for the old Wards Automotive space on the southeast outparcel. They will be starting construction later this year. If you haven't checked out this chain, check out their website.....you'll be impressed. I've been to the one in Dallas, and I'd say it's an African version of Rainforest Cafe. Very impressed. http://www.elephantbar.com/

3. Management is taking with Cheesecake Factory and Maggiano's for the parcels over off Penn by UMB Bank. If this happened, they wouldn't open until 2007 or 2008.

4. Penn Square Mall requires remodels every 5-7 years. So over the next few years, you'll be seeing remodels of some of the older stores. Kirklands was recently remodeled. The Body Shop is currently reing remodeled. Eddie Bauer will be next.

5. At the mall, sales are up 9% so far this year! Penn Square stillleads the state as the highest profit-making mall, and has sales per square foot way higher than the national average. This is the reason we keep getting upscale stores there.

[Pete]

Elephant Bar is a good get! I think it will do very well there.


I know they are opening a location on Memorial in Tulsa as well.

[Luke]

Oh man, Cheesecake Factory would be a coup for OKC. That is one of the best restaurants.

[Pete]

Here's a couple of Elephant Bar shots from their website:

[brianinok]

Elephant Bar looks cool. I just hope there is enough parking. On weekends, that lot by the east Dillards is already filled with cars.

While I am very excited about Cheesecake Factory, I am concerned about what Penn Square is doing. By selling (or long term leases) off all these areas, they are locking themselves into no expansion of the mall. Future expansion after these lots are gone will probably require another garage to be build (which is expensive and very well could deter Simon from expanding). The reason Penn Square has such good sales per sq ft is becuase it is so small. While it has many upscale stores not found anywhere else in OKC, they are all smaller than same-chain stores even in Tulsa, let alone any city in Texas.

It has already been discussed how land-locked Penn Square is compared to Quail Springs. Right now, I live near Quail, but do all my shopping at Penn. I'd really like to see Quail add a few upscale stores to its list-- like Banana Republic, Pottery Barn, etc. And most of all-- I wish someone would add a Nordstrom in OKC!!! Their prices are just slightly higher than Dillard's, but the brands and quality are far superior.

One other question: Are both of our Foley's (Penn and Quail) going to be converted to Macy's? Not just name changed-- actually converted. Macy's is much better than Foley's.

[Luke]

Also, I remember Patrick mentioning something a while back regarding Penn Square expansion... If I remember correctly, he said something about Penn Square building a separate mini-mall kind of thing that would essentially be an extension of the mall without being connected to it. Correct me if I'm wrong, Patrick, it's sort of vague now. Do you remember?

[venture]

It almost sounds like the best option for Penn is develop in the way Somertset Collection in Troy, MI was put together. The mall is essentially two buildings joined by a skywalk with a road running through them.

http://www.thesomersetcollection.com/

[HKG_Flyer1]

This is really good news. These are quality operations. IMHO, Elephant Bar is much more interesting than Rainforest Cafe.

[Pete]

Ah, Somerset... I had a consulting project at K-Mart HQ (almost right across the street) in the dead of winter a few years back.

Was an okay mall but an otherwise traumatic experience.

[poe]

don't worry brian, the banana republic store in lubbock is about the size of a 7-11 bathroom and usually consists of the endtrails of the merchandise that hasn't sold in other markets.

[brianinok]

Lubbock has a BR?!? I didn't realize that there was a nicer store than Dollar General in Lubbock. Actually, that makes me sad that they have one, and we have one, and Tulsa has two (both of which are way better than ours).

[poe]

i like the one in utica square. actually, i like everything in utica square.

[Patrick]

Actually, both Quail and Penn are sorta landlocked in their current configuration. Quail used their last opening with the theater. Penn could still expand on the Pepperoni Grill side, but parking is always an issue at Penn.

All market studies have shown the market can't support any larger malls for the area, so I doubt either Penn or Quail will expand anytime soon.

I also question the use of valuable parking space at Penn Square for restaurants. About Elephant Bar, you have to remember this space was once filled by Wards Automotive, so recent parking there has only been a bonus.
Parking located near the UMB bank isn't used during most periods of the year, but I always question the Christmas season. Parking at Penn Square is always a mess at the holiday time. I've asked management about it, and they haven't really given me a clear answer. One thing they need to realize is that not only will filling these outparcels take up valuable parking, they'll also make it tough on the restaurants during the holiday season, as their parking will be taken up by mall patrons.

I think Penn Square management is just trying to squeeze out every last square inch of that property.

What they should have done is purchased the Belle Isle Station property several years ago, before the strip mall was developed. But even then, JC Penney is blocking the way to expansion that direction.

I think what you're currently seeing (development on th eperiphery of malls) is the norm now. Just look at Quail Springs and Crossroads. Quail is selling off or leasing pretty much every outparcel around the mall, or they'd like to. Crossroads owns many of the stores surrounding the property.

Developing these outparcels can have two effects.....1. Draw traffic to the strip developments and away from the mall. OR 2. Draw more traffic to the area in hopes of drawing more traffic to the mall.

[Patrick]

Luke, you asked about the possible development on Penn Square's northwest corner. There were thoughts of developing a small strip center around the bank, but a lot of that was based on businesses expressing an interest for those outparcels. Right now, Penn Square is entertaining offers on the parking space on both sides of the bank....north all the way to the creek, and south all the way to the main west entrance. If two restaurants (Cheesecake Factory and Maggiano's) are picked for those outparcels, that may be all we see there.

By the way, tenants in 50 Penn Place are already complaining about management's decision to allow Olive Garden to build on one of their parking lots. Tenants like Pendelton and Full Circle have had their parking extremely reduced.

[Luke]

Thanks, Patrick. Keep us updated on those restaurants. Those would be great additions to the OKC market, in my opinion.