An uncommon marriage of retail and self-storage has helped revitalize an old and challenged suburban shopping center.
Two months after Greenberg Gibbons acquired the Reisterstown Shopping Center, its anchor tenant — Mars Super Markets — announced it was closing all stores. The 50-year-old center’s occupancy soon plunged to 65 percent.
Greenberg Gibbons, which had always planned a major renovation of the center, invested $9 million in upgrading the property and attracting new tenants, including Lidl, Starbucks Coffee, and several food outlets. However, the Mars space, which had challenging conditions and ceiling heights, remained vacant after Lidl selected another location on-site.
Through extensive research, the company “evaluated the highest and best use for the remaining space,” said Eric Walter, President. “We identified self-storage as a strong opportunity to bring an amenity that would complement the other uses at the center.”
The company partnered with Klein Enterprises to develop a 100,000-square-foot Extra Space Storage facility.
That addition “absolutely contributed to the revitalization of the center,” Walter said.
As a result of the repositioning efforts, annual traffic to the shopping center grew from 1.7 million previously to 2.7 million today and its vacancy rate dropped to just five percent.
“We believe adding a quality self-storage building played a role in securing our lease with Lowe’s Outlet [for 35,851 square feet], as they viewed the self-storage component as a positive, particularly for customers and contractors who could benefit from both uses in one convenient location,” he said.
The unusual mix of retail and self-storage did pose some challenges.
“There was an operational challenge to ensure the space remained clean and safe, as storage uses can sometimes generate extra waste,” Walter said. “We’ve been very proactive and diligent in managing this. We were also intentional about designing the project to preserve ample parking, incorporating dedicated spaces for self-storage to ensure it complemented the rest of the center.”
The self-storage facility provides a clean, well-lit environment, is LEED Gold certified and has a 180-kilowatt rooftop solar array (large enough to meet all the facility’s electricity needs). The facility proved sufficiently successful and attractive that Greenberg Gibbons and Klein Enterprises sold the property early this year to a 1031 exchange buyer.
“The successful sale of this facility underscores the strength of our partnerships and our shared dedication to creating projects that meet the evolving needs of the market,” said Sean Garland, Chief Investment Officer for Klein Enterprises.
“The project was a success and an excellent partnership with Klein Enterprises,” Walter said. “We continually evaluate creative opportunities to reposition and strengthen our portfolio, and self-storage remains one of the many options we consider when it aligns with the market needs and site characteristics.”