Phillipsburg Mall is home to anchors like Sears, Bon-Ton, Kohl's and JCPenney's.
But have you noticed that the mall's corridors are riddled with vacancies?
I witnessed the sea of empty storefronts as I walked through the mall during lunchtime Wednesday. I wasn't necessarily dodging tumbleweeds, but the dearth was obvious.
Phillipsburg has one of the highest vacancy rates among the Lehigh Valley's shopping malls, with nearly three dozen empty storefronts among its more than 90 spaces in its online directory.
Vacancies are plaguing many Valley shopping malls in this lethargic economy, and Phillipsburg outpaces most. The vacancy rate at Phillipsburg Mall is nearly four times the 9 percent average for regional malls across the country, according to an April report by Reis Inc., a real-estate research firm. Phillipsburg's large vacancy rate could also make its sale a challenge, according to one retail expert
The 577,000-square-foot mall is among five properties Pennsylvania Real Estate Investment Trust is looking to sell to pay down debt, company officials recently announced.
The Philadelphia-based firm, also known as PREIT, announced during an earnings call late last month that in addition to Phillipsburg, it plans to sell Beaver Valley Mall in Beaver County, North Hanover Mall in York County, Chambersburg Mall in Franklin County and Orlando Fashion Square in Orlando, Fla.
"The company is focused on leverage reduction and one way to accomplish this is to sell non-strategic assets," said President Ed Glickman during the earnings call. "To that end, we are in the market with five assets for disposition."
During the call, company officials said they haven't sold any of the malls yet, but have heard from potential buyers.
PREIT owns 38 malls, including Phillipsburg Mall, South Mall and Palmer Park Mall. The firm also co-owns Lehigh Valley Mall and Whitehall Mall with Simon Property Group.
Phillipsburg Mall General Manager Pam Richetta deferred comment about the mall's sale to officials at PREIT's headquarters. Those officials did not return phone calls.
The large number of vacancies could make a sale challenging, according to Jeff Green, president and CEO of Phoenix-based retail consultant Jeff Green Partners.
"It's harder to sell a distressed mall and with the significant vacancy rate, however what they need to value is the site or the land because usually malls have good real estate," Green said.
He added that the Lehigh Valley's burgeoning retail marketplace has made it difficult for the mall to lure both merchants and consumers.
"The competitive environment in the area has strengthened in the last 15 years. You have Promenade Shops at Saucon Valley and the upgrade at Lehigh Valley Mall over the years and there's also new retail in Bethlehem," he said. "You have a lot competitive forces that have also impacted Phillipsburg Mall."
The asking price of Phillipsburg Mall is not advertised in online real estate listings, but PREIT acquired the mall in its 2004 buyout of Crown American Realty Trust of Johnstown for $1.2 billion. Phillipsburg Mall was built in 1989 for $40 million and its last remodel was in 2003, according to PREIT's website.
Phillipsburg has been hemorrhaging stores in recent years. That includes some high-profile losses like FYE and PacSun, merchants that targeted the mall in their nationwide retrenching amid lackluster sales.
Such losses have eroded the mall's reputation as one of the Valley's mainstays for teens and 20-somethings. The mall still offers several youth-focused merchants, including Justice, GameStop and the Valley's only H&M store, but lost others like American Eagle Outfitters and GAP.
I've been shopping less at Phillipsburg Mall after some of those merchants closed. I'm still drawn by H&M, but my trip on Wednesday was to hear what shoppers were saying about the mall.
Some shoppers said they like the mall for its convenience, lack of congestion compared with other area malls and the H&M store. Others said the mall's theme has shifted into a mother's haven with stores such as Gymboree, Old Navy and Motherhood Maternity.
