Oak View Mall faces a steep challenge in recovering from the loss of two anchor stores now that Sears and Younkers are both on their way out, Omaha real estate professionals say.
The loss of one anchor store, let alone two, can be difficult for even a healthy mall like Westroads to endure. The odds are stacked even higher against a mall that has been struggling as long as Oak View.
“Unless something really unexpected happens, I think Oak View is probably irretrievably broken,” said Rick Quinlevan, president of brokerage services at the Lerner Co.
Sears announced last week it would close the store at the mall near 144th Street and West Center Road. The Sears department store at Crossroads Mall will remain.
There is also a Sears Hometown store in Bellevue near 25th Street and Cornhusker Road, which sells Kenmore and Craftsman appliances found at Sears. Those Hometown stores are no longer owned by Sears Holdings.
Younkers’ parent company, Bon-Ton Stores, announced in April that it would close all of its department stores after no buyer emerged out of its Chapter 11 bankruptcy.
Younkers is now in the process of liquidating both of its Omaha stores. They are expected to close by the end of August. Sears will begin liquidation June 22 and is expected to close by September.
Oak View’s sales per square foot have been struggling for years, Quinlevan said. Its occupancy rate in 2017 was just 87 percent, according to owner General Growth Properties’ latest annual report. Westroads’ occupancy rate is about 97 percent.
Oak View General Manager Amber Bakken referred questions to a General Growth spokeswoman, who did not return a request for comment.
Some have wondered why the Sears store at Oak View is closing, rather than the one at the ailing Crossroads Mall. One reason might be that Crossroads Mall could be redeveloped in the near future, so the location there presents a financial opportunity for Sears. Any redevelopment plan would require buying out that store’s lease. Sales at the 72nd and Dodge store, especially at the Sears Auto Center, may not have been too shabby, either.
“They have some unusual leverage here. That building needs to be moved to do anything there,” Quinlevan said.
Oak View has been hurt in part by the rise of online shopping and changing consumer demands and habits, trends that have led many bricks-and-mortar retailers down a dark path. Retailers have shuttered hundreds of stores in recent years or, as in the case of locally owned Gordmans, declared bankruptcy.
The ring road of shopping centers around Oak View has been affected as well: Toys R Us is in the process of liquidating after it declared bankruptcy. Dick’s Sporting Goods closed its store there within the past few months. An old Hy-Vee store now houses a cheerleading studio and a church.
Oak View has lost business to competing malls and shopping centers like Village Pointe, Nebraska Crossing in Gretna and even to Westroads, where General Growth has focused its investment. In the past five years, Westroads has undergone multimillion-dollar renovation; added a new food hall, Flagship Commons; and has attracted new retailers like H&M and the Container Store.
“General Growth pushed people to Westroads. So Westroads became a competitive property for Oak View as well,” said Dan Dutton of local real estate firm OMNE Partners.
Few stores are opening that could fill holes in Oak View as large as those left behind by Younkers and Sears. The ones that could — Ross Dress for Less, for example — seem to be opening in large “power centers” like L Street Marketplace near 120th and L Streets and strip malls along West Center Road, Dutton said.
“There are still retailers expanding and looking to do deals in southwest Omaha,” said Dutton, whose firm handles leasing at that center. “They’re just choosing to go a different direction than that Oak View Mall area.”
To complicate matters, Toronto-based Brookfield Asset Management is in the process of buying the two-thirds of General Growth it doesn’t already own, meaning Oak View and Westroads are likely to change hands soon.
Whether Oak View will be included in the sale to Brookfield is up in the air, said Trenton Magid, executive vice president at NAI NP Dodge and a member of the Omaha Planning Board.
If the mall continues to decline, it’s likely to be sold instead to a developer who might find a new use for it other than as a shopping mall. More likely, a mixed use of office, housing and retail or entertainment.
“It’s a big piece of land with good demographics, but people have to have a reason to go there,” Magid said.
As Omahans have seen with Crossroads Mall and Mall of the Bluffs in Council Bluffs, however, it probably will take years before a new use for Oak View emerges.
“It wouldn’t surprise me if we’re talking about the redevelopment of Oak View 12 or 15 years from now, like we’re still talking about Crossroads,” Quinlevan said.