The new vision for the Sears stores and parking area at Aventura Mall: an open-air village featuring retail, restaurants, offices and a hotel.
In a first of its kind project for the company, Sears Holdings submitted plans on Monday to the city of Aventura for the redevelopment of the 12.3 acres of the Sears property that currently holds a 192,000-square-foot Sears department store and Sears Auto Center and adjacent surface parking areas.
Called Esplanade at Aventura, the proposed development will include about 250,000 square feet of retail and restaurant space, 45,000 square feet for office space, a hotel, and underground and above-ground parking facilities, the company said. Sears will retain a presence with a 20,000-square-foot smaller-format store, the company said.
Esplanade at Aventura was designed by San Francisco- and Miami-based SB Architects, whose projects include Miami’s Design District. The development is described as a contemporary, open-air shopping and entertainment village. Sears Holdings gave no timeline or construction start date for the project.
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If the development comes to fruition, it will be another example of the de-malling of the mall trend nationwide. Aventura and other traditional malls across the country have been adding open-air sections and elements to their structures, and this would vastly heighten that experience at Aventura Mall.
“We are confident that we can deliver a convenient, day-to-day town center experience for local residents while also catering to the regional, national and international customers who frequent Aventura,” said Paul D’Arelli, development advisor for Sears Holdings, in a statement.
The struggling Sears has been trying to reinvent itself, and the Esplanade at Aventura fits with its strategy of squeezing more value out of its extensive real estate holdings, some owned and some leased. To be sure, Sears Holdings, which also includes Kmart stores, has a huge real estate portfolio, with more than 2,000 stores nationwide, but the Aventura property is one of its most valuable.
“There has been speculation for a very long time that they really, in effect, are a real estate company. The value lies in the real estate holdings or in the properties that they lease,” said Dennis Carson, executive vice president in the Miami office of CBRE, a big commercial real estate brokerage.
Sears CEO Edward Lampert, also the company's biggest shareholder, is trying to turn the chain into a leaner, more digitally focused retailer. In addition to store closures, the company, which has posted nine straight quarterly losses and has seen annual same-store sales drops every year since 2005, has been leasing space in some of its stores to other retailers; for example, in stores in Clearwater and two other cities, it leased out the first floor to Whole Foods. Last month, Sears agreed to lease space at seven locations to British clothing merchant Primark Stores. The chain said last week in an SEC filing that it was considering spinning off hundreds of its properties as a real estate investment trust.
But in terms of multi-use redevelopment, nothing of this scale or size has been attempted by the company so far, said Howard Riefs, director of corporate communications for Sears Holdings. “This is something new and exciting for us,” said Riefs, who said there is no plans at this time for similar redevelopment at other valuable store sites, including one it leases at the entrance to Miracle Mile and Coral Gables.
This is a viable option that enclosed malls have been experimenting with, although it is usually the mall developer rather than the anchor store undertaking a project such as this, said Jessie Tron, spokesman for the International Council of Shopping Centers.
“What we are seeing is that it’s really about being creative in the way they use space now and not being tied down to one particular format type or tenant just because that’s how it was in the past,” said Tron. “There has been a move to evolve and to take on these new concepts that cater to the consumer and what they would want.”
Sears Holdings has retained JLL Retail to lease the Aventura project.
In a statement, Jonathan Kurry, general counsel for Aventura Mall owner and developer Turnberry Associates said: “We look forward to reviewing and evaluating their plan for the potential future of the Sears’ location. Aventura Mall is committed to enhancing the experience for our retailers and their customers.”
Miami Herald staff writer Martha Brannigan and Bloomberg News contributed to this report.