Challenges Faced

Sensing a changing market and noting an increase in vacancies, Kimco Realty, the largest strip shopping center owner in the United States, hired Next Realty Mid-Atlantic in 2009. Next’s directive was to formulate a plan and lease some of their larger, more involved properties, including Battlefield Shopping Center in Leesburg, Virginia.

There were several unique obstacles to overcome in this task.  First, the Leesburg market was perceived as small and overbuilt.  Second, the retail industry was grappling with fall-out from the great recession, which stressed tenants’ ability to pay rent, pushed rents lower and vacancies higher in Battlefield.    Further complicating the task, many of the available spaces were in less desirable locations in the center. Kimco’s primary interest in hiring Next Realty was to provide a fresh look at the project, and remerchandise, release and ultimately, to help restabilize the project.

Results

Next Realty initially focused on backfilling big-box tenants on short-term deals with larger, credit-worthy tenants.  It successfully produced national tenants Lumber Liquidators, Woodcraft and Total Wine. The largest hole in the center was plugged by securing Big Lots to take the “elbow” and multi-level space.

Once anchor tenants were set, the Kimco-Next team negotiated several small-shop leases, filling not only well-located vacancies, but also spaces that harder to find and not visible from the road.

In the third phase of leasing, Next Realty produced Dick’s Sporting Goods and Designer Shoe Warehouse to replace a flagging Shoppers Food Warehouse store. While losing a grocery store in the short term, Kimco and Next created a situation in which there was a future opportunity to lease space to a better-quality grocery store in a better position in center.

Today, Battlefield Shopping Center is 100% leased, and has excellent prospects for future releasing and redevelopment.  Evidence of Kimco’s satisfaction: Next Realty Mid-Atlantic now leases several major shopping centers for Kimco in the Washington DC region with a total of 2 million square feet. In 2018, Next and Kimco celebrated 10 years of a mutually beneficial broker-landlord relationship.