DDR – Plaza Rio Hondo, Bayamon, Puerto Rico, photos of the property’s “post” redevelopment project in September 2015.
The $ 550 million sale of nine malls previously owned by Retail Value Inc. brought Developers Diversified PR back to the island 15 years after it was first established.
This operation, which firm in August 2021, also meant the return of developer Scott Wolstein, who will oversee the portfolio, whose performance – he says – can be restored to what they were before Hurricane María hit in 2017.
“We believe this is the right time to re-enter the market. The market has taken a few hits across the arc with hurricanes and COVID-19, so the current performance of assets is not what it used to be, and this gives us the opportunity to really generate some profit growth. , which we intend to do, ”he said in an interview with News is my Business.
Despite all the economic challenges seen in recent years, Wolstein believes there are circumstances that provide “some favorable winds” to the industry, such as the arrival of “very wealthy Americans who are moving to Puerto Rico to a better tax environment and more user-friendly, which drives many construction jobs that create jobs.
Further, he believes the larger picture of the consequences of the pandemic across the globe, which is likely to shift some manufacturing activity from China to this hemisphere, “and with so much of that being done in Puerto Rico, I think ‘There’s a chance the island can benefit from it,’ Wolstein said.
Wolstein, who has a successful history in Puerto Rico, now returns with the new Developers Diversified PR by acquiring the properties he first purchased over 15 years ago. He and his father founded the original Developers Diversified Realty in 1992. They expanded to Puerto Rico in 2005. At the time, Wolstein was CEO of the shopping center company known today as Site Centers.
Wolstein is an investor and manager on behalf of a larger group of private investors. He is responsible for the day-to-day operations of the portfolio which is 93% leased. Developers Diversified PR anchors include Walmart, Sam’s Club, Bed Bath & Beyond, JCPenney, Best Buy, Caribbean Cinemas, The Home Depot, TJMaxx, and Marshalls Mega Stores, among others.
Developers Diversified PR owns and operates nine shopping centers in Puerto Rico: Plaza del Sol, Plaza del Norte, Plaza Río Hondo, Plaza Escorial, Plaza Isabela, Plaza del Atlántico, Plaza Cayey, Plaza Fajardo and Plaza Walmart.
“Economies are cyclical and we believe there are better days to come. In retail you don’t really have to guess because you know… you get the sales information, you know how they behave and the sales performance [at the shopping centers] isn’t it so different from what it was before the hurricane, ”he said.
“There really is no reason why we can’t restore occupancy and performance to what it was before,” he said, acknowledging that the properties’ net operating income is “much lower. to what it was before. But if we can restore it to what it once was, it will be a very successful investment.
While malls are around 93% occupied, Wolstein said there were still several large boxes vacant when Sears and Kmart stores closed.
“The release of these boxes creates redevelopment opportunities. However, I don’t see a big retailer coming back anytime soon to fill that 100,000 square foot space, ”he said, saying a retailer like Target won’t be coming to the island, in response to a question. of this media. .
“I don’t know of anyone looking to come to Puerto Rico who isn’t already there. We believe those who are here will expand their footprint in response to the demand from companies for new stores, like Burlington and TJMaxx, ”he said, adding that these large empty locations can also be filled with entertainment options. and several tenants who divide the space. .