Many of us have been distracted by the excitement of recent opening of Wegmans grocery store. However, in about 3-1/2 weeks, the Chesterbrook community and its neighbors (me included) are going to be faced with the stark reality of the closing of Genuardi’s grocery store. Citing economic reasons for the closing by the owners of the store (Safeway), the announced closing date is August 21.
Last month when I discussed Genuardi’s closing and the effect that it might have on the Chesterbrook community, it was met with some criticism. But I think over the last 30 days since the owners announced the store’s closing, the impact of the closure has begun to set in; there has been a growing concern by members of the Chesterbrook community relating to several issues. For those residents living in Chesterbrook that do not have access to cars, Genuardi’s closing may present a negative impact on their health and economy without easy access to a local full-service grocery store. I have received several emails from retirees who depend on Genuardi’s (and also the drug store which is rumored to be the next to close) for their shopping needs as well as medical needs.
I know some bristled when I questioned whether a large empty store in a shopping center could have an adverse affect on local housing values. From a long-range standpoint, it would probably be a reasonable guess that an empty anchor store in a residential community shopping area is unlikely to ‘increase’ the value of neighboring properties. We can hope that the shopping center continues to be completely maintained while the space remains vacant and available for lease.
In addition to concern about the loss of a convenient Chesterbrook grocery store and the effect that Genuardi’s closing may (or may not) have on property values, there has been an undercurrent of scuttlebutt on the overall future of the shopping center (not just the grocery store space). I received the following email this morning, which prompted this post:
Good morning Pattye,
I found your June 22nd article about the Genuardi’s closing very informative. I sent it to a friend of mine who remains insistent that the Shopping Center has been sold to a developer who will be turning it into some kind of retirement center. I tried to google that info but came up empty. Can you offer a definitive answer to this issue? There is a dinner bet at stake…lol.
Rumors continue to swirl that Chesterbrook Shopping Center has been sold to a developer and the property will be re-designed as a retirement center. At the July Board of Supervisors meeting, township manager Mimi Gleason was questioned about this rumor. Her response was that she knew of no sale of the property, and further stated that the township had not been approached with a proposed land development project for the property.
I contacted the leasing agent for Chesterbrook at Centro Property but my call has not yet been returned. Their website indicates that Genuardi’s space of 38,502 sq. ft. is available for lease. I reviewed the floorplan of Chesterbrook Shopping Center on Centro’s website and counted the total number of rental units in the Chesterbrook Shopping Center as 42 separate units. I then counted those units that are indicated as ‘available for lease’ and the number was 19. Nearly one-half of the available units in the shopping center are now available for lease, including Genuardi’s. With the addition of Genuardi’s grocery store to the list of ‘available for lease’ units in Chesterbrook Shopping Center, my guess is that greater than 50% of total square footage in the shopping center is now empty.
With an approximate 50% occupancy rate in Chesterbrook Shopping Center (after Genuardi’s closes) I think that there is need for real concern. For those of you who live in one of the villages of Chesterbrook, how do you feel? Where does the Chesterbrook Civic Association stand on this? Is there any kind of pro-active movement by the residents to help turn the commercial area of Chesterbrook around?
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Kudos to you for keeping this in the discussion. It is actually things like that that call into question the “new job” figures that developers bandy about when getting approvals and funding for new projects. No one need complain that there is speculation that this is a bad economic sign for Chesterbrook — because it absolutely is. The 3 rules of real estate — Location, Location, Location — are all affected by a shopping center in decline. Our economy is in trouble, but the excitement associated with the new Wegmans and other entries into our market (the new electronics store to replace Circuit City comes to mind) have to partner with the idea that existing space sitting empty is not good. (Clearly the new merchant moving into the abandoned Circuit City location is a good example — Wegmans moving into a new site is less so).
These issues are the reason that we need planners, not politicians, making our community move forward. A Chamber of Commerce that goes beyond by expanding/incorporating constituents (Paoli Business Association, Chester County Economic Development) is clearly lacking. Bringing new developments when we have developed properties sitting empty lacks strategic vision.
I’d be interested in comments here about how a broader community of interests can help to offset this kind of “neighborhood” decay….vs. clear cutting land to build something new.
Actually, Trader Joes moving/expanding into the old Genuardi’s makes a lot of sense.
Wouldn’t that be great!
If trader joes moves, then that will create a vacancy.
The problem with the Chesterbrook site is that it is a dreadful retail location. Poor parking, poor visibility, lacks capability to draw non-Chesterbrook residents.
Just my two cents but the center will likely need to be redeveloped at some point with a more viable use. However, getting the support of Chesterbrook residents could be a tricky proposition.
Moral support may be important, by I suspect the owners of the shopping center only need to make sure it conforms to the usage allowed.
Wouldnt it be good for the chamber of commerce, or other business associations ADVERTISE for businesses to come to our great community? May be worth the expenditures even in this lousy economy?
I don’t think it is a question of new development vs filling vacancies. While it may be good to look at vacancies as a possibility, and maybe create incentives to have businesses fill those vacancies, new development also is a signal to outsiders of vitality and growth.
TR, FF and others
I had a long researched response to this and my computer crashed, so this effort may be long but anecdotal in some ways.
Before moving to thsi area in the late 80s, I did real estate related work for a department store chain in Dallas. I watched major malls spring up, stores merge and major malls shut down, new roads be developed to change the traffic patterns…all active and growing. I have seen and lived through the rise and fall of a retail economy. So I am speaking anecdotally and somewhat academically (masters in real estate and regional analysis). But I do not have answers — only more questions to ponder.
Let me say that strategic vision is part of the planning process to develop zoning and planning regulations to attract business. Regional results will not solve small strip-center type leasing declines. Certainly new business developments signal growth and vitality, but empty buildings signal and often trigger decay. When the anchor tenant leaves, it takes another anchor or everyone else goes too.
Chesterbrook is one in a huge portfolio of properties under the management (and sometimes ownership) of Centro Properties.From their website: Centro Properties Group (Centro) is a retail investment organisation specialising in the ownership, management and development of retail shopping centres. Centro manages both listed and unlisted retail property and has an extensive portfolio of shopping centres across Australia, New Zealand and the United States. Centro has funds under management of $20.3 billion.
In this area alone, CENTRO manages Chesterbrook with gross leasable sf of 122K sf. About 50% is officially unoccupied (once Genuardis closes). They also manage Valley Fair’s 110,000 sf, of which more than 50% is unoccupied.
From their Website on Valley Fair:
Key Selling Points
Valley Fair is connected to adjacent shopping centers with Super Fresh Supermarket, Circuit City, Linens & Things and Barnes & Noble. The center is 2 miles south of The Court and The Plaza at King of Prussia.
With this level of accuracy on their website, do we think that leasing this space is a high priority? Their “key tenants” at these two sites are Chuck E. Cheese, Rite Aid and Tuesday Morning….
Again, from their website: Centro’s portfolio of 600 properties is strategically located across 39 states and aggregates approximately 98 million square feet of gross leasable area. They list 45+ properties in PA. It doesn’t seem that their typical retail site has any serious majors (national chains or typical anchor stores) which they could entice to plug into one of their malls.
Someone said earlier that the Chesterbrook people will possibly have to accept a different kind of development . This is the same demographic that pushed hard against Barnes and Noble and the then Regal (I think that was the chain) movie chain doing a development nearer to 202 (and providing seed money for the bridge that crossed 202 at that point). They ended up with more office space. What kind of development would be attracted to the Chesterbrook site — the demographic isn’t changing, the competitive market for grocery has been dramatically altered with the arrival of Wegmans, and the “right turn access” which is a critical variable in locating retail trade is alomst non-existent at both Chesterbrook and Valley Fair.
I understand (though do not know and would love verification) that the motivation for Penn to locate in the somewhat awkwardly accessed spot on 202/Cassatt was due to a windfall acquisition of the land. Until there is a major turnaround in the economy, all this previously new and now aging development is likely to sit empty .
SO — we can all cheer the new Wegmans and the new development on the previous golf course that will be the next Wegmans, but absent any serious effort on the part of someone invested in this community (not sure Centro would consider these two sites jewels in their crown), Chesterbrook, Valley Fair and perhaps others may put up the “going out of business” sign quietly in our community. It will take a community effort (not just a Paoli development that takes credit for new jobs that are likely jobs relocated from aging space elsewhere in the area) to energize these sites. If we think that moving Trader Joes would be a good idea, is someone going to promote that — contact the leasing agent, try to put together the deal? How about getting WAWA to put a regional site with gas pumps and even sit-down lunch areas (to empty the parking lots of all the contractors who park and eat). Should we deputize someone to start the effort — or just bug the leasing agent for the developer? Thoughts?
Andrea, excellent points. I have another anecdote to add. Gateway shopping center is owned by Regency Properties, I believe. There used to be a family owned chinese restaurant around the corner by the dance studio. My family frequented it often, and got to know the young family that owned it. During the height of the real estate bubble, I walked in to pick up my takeout, and the wife/owner asked me for my e mail address. I asked why, and she told me they could not afford the draconian(my word) rent increase they were hit with. It was really the owners way of saying “out out out”. Also at this time I owned shares int the reit. I was sad to see them essentially forced out, and haven’t heard from them since. My understanding was they did a good lunch business and a decent dinner/takeout. Their food was good and prices very reasonable. This was around 4 years ago. That space is still empty.
So your point about these large real estate companies, with virtually no attachment to the community and huge portfolios is right on. As a small real estate investor, MY philosophy is to, especially in tough times, not be greedy with rents, but get people into the property, have them stay and charge a rent that would at least pay my bills, with the hope that soon the economic climate will change, and then resume reasonable increases. Not so with these big companies. They, to a point, don’t care. By the way, I sold my stock in the reit when I saw this happening. ANd the stock price dropped 50%.
I am not sure what the answer is, but your suggestion of “deputizing” a community member to look out for the interest of the community is thoughtful. And maybe a balancing act to the decisions made by off location large companies.
At the end of the day, these companies are in business to make money, and maybe eventually they will feel it at the bottom line and come to grips with the nature of the economy insofar as their pricing decisions are concerned.
Your comment about the Chesterbrook demographic is telling too. These codgers are against alot, and complain alot too. Was it the soccer fields at VF elementary school that drew complaints? Or was it activities at Wilson Park?
I appreciate your thoughtful comments. Thank you
Are you talking about the Chinese restaurant that used to occupy the space that has been a Bike Line for many months? In my recollection that space didn’t sit empty for long at all. Occupancy rates in Gateway are very high, probably as good as any shopping center in the area, and regency has done a lot of work with attracting/retaining tenants – some very long term. As well they have done a great jo
Regency has also done a great job with the maintenance and improving the appearance of the shopping center.
I wonder why the family who owned the Chinese restaurant in Gateway wasn’t to move their business to any of the other vacant storefronts around? I would guess that their issues weren’t as simple as a “draconian” rent increase.
Despite your example of a long time tenant having to leave gateway, it appears Regency is doing something right in that shopping center.
maybe yes, maybe no. There stock price, like many dropped 50%. Many of the tenants I know are unhappy that the center has essentially become a food court.
I didn’t think there was a bike line back there. I will check. The chinese restaurant was there for a long time. I really don’t know where they may have gone, or if they folded completely. All I am saying is the rent became too high for them to stay in that space, and that space had gone empty for awhile.
What is with all of the Chesterbrook bashing? “flyersfan” makes a comment about “these codgers”? In our HOA, the great majority of owners are families with children or recent empty-nesters (45-55 yr olds) – hardly a fussy, elderly group that is “against a lot, and complain a lot”.
The issue with the soccer fields at VF Middle School was parking – the issue at Wilson Park was flood lights at night – both reasonable topics of discussion for the people who lived adjacent to these areas, don’t you think?
I remember Keith Isleib(sp?) standing up at a meeting and condemning parents for buying 100 dollar sneakers and other parenting options. He was booed out of the packed room and from what I can tell, never really said much thereafter.
Perhaps I overspoke about the “codgers”. My apologies. One game does not a season make. Thanks
As a VP on the Board of the Chesterbrook Civic Association, I was the point person investigating what might happen to Chesterbrook Village (CV) as the rumors of the Genuardi’s closing swirled. I spoke to several officials at Genuardi’s/Safeway, with the people at Centro, the owner and operator of Chesterbrook Village, and quite a number of commercial real estate professionals in the area who are familiar with the current market.
Andrea has already said a lot of what I learned, but there are a few more insights into the situation. All confirm that Chesterbrook Village is not a good site for most retail, unless it can survive on clients drawn directly from Chesterbrook Village. There is not, and no reason for there to be, lots of cars from outside going down Chesterbrook Blvd. and stoping at the CV, especially because the design of the center makes it impossible to see what is inside it. There is also significant vacancy in the Chesterbrook office buildings, because there are newer space alternatives.
Competition for a grocery solution in CV predates the arrival of Wegman’s. Competitors for grocery customers now include Costco, Walmart, Whole Foods, Trader Joe’s and others who didn’t even exist when CV was built. When I spoke to some one at Centro last week and said I had heard an Aldi’s was moving into the Genuardi’s, I was told that it was definitely not Aldi’s, but that no more could be said. Centro is actively trying to lease space in CV.
Real estate professionals have told me that the Genuardi’s space is too big for Trader Joe’s, and the flow (volume and visibility) of traffic is much better for Trader Joe’s in Gateway. From anything I could learn, the rumors about an assisted living facility seem to be leftover from the discussion of mixed use zoning several years ago and what could be built with that designation. I could discover no current plan.
There is not a lot citizens can do to solve this classic market problem. Our patronage of the businesses that have closed was not enough for them to be profitable. For a major re-purposing of CV to occur, a developer would need to come up with a viable plan and obtain financing, not to mention file a plan with the township, get permits, community approval, etc.
While Chesterbrook residents would like to keep a grocery and other retail amenities in their neighborhood, the economics are not in their favor. The Genuardi’s PR person said Genuardi’s is closing those stores that are small and old. Drug stores now want sites that have large footprints and access from two different streets and drive through prescription pickup. Some people I interviewed said the most economic use of the site would be another village of townhouses – a point of view I do not share.
The mixed use zoning approved by the Township in the Comprehensive Plan leaves the most options open. But until the economy recovers enough to make financing possible, it is my opinion that the best Chesterbrook residents can expect is some period of empty space in CV, while Centro tries to lease pieces of the current configuration. I hope I am wrong and that some sweet deal is secretly in the works, but it doesn’t seem economically feasible in the near term.
Thanks Dariel and others for your comments. I sadly agree with Dariel’s conclusion that there is likely to be empty space for awhile. And to Just a Thought — I don’t think it’s bashing. What I do think is that people who own real estate often protect their interests at the expense of the general community. Do I blame them? No. In fact, I got my advanced degree in real estate after I faced a zoning fight in my previous life in Dallas when a developer wanted to rezone land across the street from me. What I learned then — understand what CAN be built on land before you oppose any plans — and don’t ever buy property thinking that what is there today will always be there.
FF — I think your point reinforces the information Dariel provided. Centro may be involved in this, but with 98 million sf under lease, and their local leasing efforts in place for Chesterbrook, Valley Fair, Collegeville Shopping Center and another in Phoenixville — all with about 50% vacancies, they will need a coup to bring in a group looking to expand market penetration in multiple sites to really make a dent. Jordan Claffey is identified as the Centro leasing agent for most of these sites, working out of the Mid-Atlantic regional office. (It’s good to know they have one). I think as community residents invested in the quality of life here, we have to collectively brainstorm and understand the economics of what would enhance our lives without leaving the property empty for years.
Thanks for your feedback. This is the kind of exchange I find particularly helpful on this blog. Good job, Pattye!
What do you estimate the rent to be @ Genardi’s?
I’m not sure how rhetorical that question is meant to be, but I have no idea. The way retail space is leased is often quite involved — gross leasable area, common area obligations etc. Likewise given the amount of empty space in this community, the finish out allowances for re-doing space might significantly offset the cost of any space initially. It depends on the length of the agreement, the size of the space, the terms of the lease etc.
I’ll throw in here that these are factors that contributed to my annoyance with the TESD’s decision to relocate their administrative offices the way they did….ultimately to a space that wouldn’t even allow them to have Public Signage….but that’s a story for another day.
Genuardi Closing Warning. All remaining genuardi family markets will be closing soon. Only six of about thirty are profitable. Wynnewood, St. Davids, Springfield, KofP, Maple Glen and Marlton,NJ are the only ones making $$. Look for Giant to take over most.