Even before the COVID-19 pandemic shut down New Orleans’ tourism industry in 2020, prompting 10 tenants to leave The Outlet Collection at Riverwalk, longtime property owner The Howard Hughes Corporation had been looking for a buyer.
RockStep Capital president Andy Weiner said he didn’t want to miss the chance. His Houston-based real estate investment firm acquired the riverfront shopping center this summer for an undisclosed price.
“We saw an opportunity to buy a major asset in a vibrant market, where will be doing hands-on leasing and creative management with a city and with a community that wanted to see this property excel and do something that created some positive energy,” Weiner said.
The opportunity comes with significant challenges. The mall has relied on tourists to survive since it was converted from vacant warehouse space following the World’s Fair in the mid-1980s, and those numbers haven’t fully returned since 2020.
It currently has over 75 retailers and restaurants, including high-end brands such as Coach, Kate Spade and Polo Ralph Lauren. That hasn’t been enough to sustain long-term success, though, according to Louisiana Commercial Realty agent and broker Robert Hand
“The challenge of this shopping center is that it has never been able to take advantage of its location, and the stores have not been able to draw enough customers in to make money,” Hand said. “Which is a real shame, because the location is terrific and in any other city a shopping center on a waterway with a terrific view would be the first choice to go shopping. But they have not been able to take advantage of that.”
Rockstep Capital executive vice president of leasing Michelle Waak, who previously worked for The Howard Hughes Corporation, said the property, previously known as Riverwalk Marketplace, looked dark and dated by the time it was acquired from General Growth Properties in 2011. It reopened in 2014 following an $84 million renovation.
“We opened 95 to 96% occupied,” Waak said. “It was great. The retailers jumped on the bandwagon, did the deals and we opened really strong.”
Rebranded as The Outlet Collection at Riverwalk, it was fully leased from 2016 until the pandemic, she said. During that time it touted the opening of Nordstrom Rack, one of two in Louisiana.
The recent loss of tenants, which left 40,000 feet of empty space, is partly due to online shopping and the inability of retailers to adapt, according to Hand.
“We will get past COVID and start having a lot of conventions like we used to and that will bring more business back,” he added. “If they can replace those lost tenants with really interesting, unique tenants that offer special products that will draw in buyers, that’ll draw people back into shopping.”
Weiner said the mall “needs hands-on creative management to bring it to its full potential.” He said the goal is full occupancy in 24 to 36 months.
“We will be able to do that, and the tenants that will come in will be better than the tenants that left because of COVID,” he said. “We have signed a letter of intent with a major luxury outlet house. There are three more luxury tenants that we are negotiating with and said they want to be in the property.” He declined to name the tenants.
RockStep plans to make upgrades over the next three to four years to the adjacent Spanish Plaza to make it “a major destination for food, entertainment and one of the key entry ways into the Riverwalk itself.”
“We think the current energy level, the current pizzazz, is just very low and we would like to reenergize Spanish Plaza with a series of quality high-end restaurants with covered outdoor seating along with some sort of public stage so that we could feature culture-bearers on a regular basis,” Weiner said. “In addition, we would like the fountain to be more fun, more entertaining and more artistic.”
Hand said the key to attracting business will be giving customers a reason to visit.
“The challenge of someone that owns a shopping center is to discriminate in a way that the stores have a synergy with each other,” he said. “You cannot have stores there that they also have at Lakeside or Clearview.”
Read the original article here: Outlet Collection’s new owner pledges ‘hands-on’ management