MOA Expansion: The Next Phase

MOA expansion: the next phase

 

By Liz Wolf

 

It looks like the Mall of America could continue to expand even more.

Construction of the new $325 million wing on the north side of the mall was just completed last November and includes a JW Marriott hotel, new Class A office space (see sidebar), a new event atrium, and space for high-end retailers.

However, the mall’s owner isn’t through yet. An even larger addition is planned for the parking lot located across the street from the mall (across Lindau Lane near Ikea). MOA owner Canadian-based Triple Five Group is proposing the mall’s next phase, a $500 million project called “The Collections at MOA.”

Triple Five and Ryan Cos. (as its general contractor) submitted plans to the city of Bloomington that could add another 1.1 million square feet and include 580,000 square feet of new retail and mall space, a 180-room luxury hotel with apartments or condos above, 168,000 square feet of office space and possibly a health club, reported the Star Tribune http://www.startribune.com/mall-of-america-unveils-another-addition-with-luxury-retail-hotel-offices/330283081/

The Twin Cities Business Journal reported that Triple Five hopes to start construction this year and open this newest phase in October 2018. 

http://www.bizjournals.com/twincities/blog/real_estate/2015/10/mall-of-america-submits-plan-for-massive-2016.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+bizj_twincities+%28Minneapolis+%2F+St.+Paul+Business+Journal%29

The Journal also reported that Triple Five has laid out plans for yet one more phase -- the mega-mall’s final phase -- which would be developed on the north side of The Collections at MOA. If all phases are built, the mega-mall would encompass approximately 8.8 million square feet.

Update on new wing; what’s open and announced?

The recent, 750,000-square-foot expansion is an extension on all three levels and includes the mall’s new front entrance. The MOA now boasts more than 520 stores and 5.6 million square feet of gross building area, according to the mall. http://www.mallofamerica.com/about/moa/facts?sf3754617=1

And leasing activity continues for this new wing, which consists of 165,000 square feet of additional retail space, which is targeting “luxury” retailers. The expansion is expected to attract additional shoppers seeking a more upscale atmosphere.

The five-star, 14-story, 342-room JW Marriott hotel anchors the expansion while Zara and Anthropologie are the first stores announced for the new wing. Spanish fast-fashion retailer Zara http://www.zara.com/us/ will open a two-story, 30,000-square-foot store – its first Minnesota location-- and lifestyle retailer Anthropologie will open a 10,000-square-foot location on the first floor.

Both stores are scheduled to open by the holidays. While Zara is an international fashion brand, neither it nor Anthropologie are necessarily considered “high-end, luxury retailers.” No further tenants have been announced for the new wing. MOA officials were not available for comment regarding leasing efforts.

“They’ve talked about wanting to make a big announcement when they had a whole bunch of retailers [for the new wing],” says Dave Brennan, professor of marketing at the University of St. Thomas. “This suggests that maybe they’re not as far along in the leasing process as they had hoped to be… Upscale retailing in the Twin Cities has not fared particularly well.” He points to such examples as Saks and Neiman Marcus leaving downtown Minneapolis and Bloomingdales leaving MOA.

“The upscale market in the Twin Cities is not as strong as many people would like to believe it is,” he says.

However, Brennan points out that MOA is unique with its more than 520 stores and entertainment offerings, and that it draws national and international shoppers. The addition of two new hotels at the mall-- JW Marriott and Radisson Blu –will make it even easier for tourists to visit. (Radisson Blu opened in 2013). Brennan also says the fact that Minnesota has no sales tax on clothing is a huge boon for the mall.

Large tourism market

Of MOA’s 40 million annual visitors, about 40 percent are tourists coming from outside MOA's 150-mile radius, according to information provided by Doug Killian, MOA’s senior director of international communications.

About 7 percent of MOA's visitors come from international destinations. MOA's top five in-bound international destinations are: Canada, the UK, Japan, Germany and the Nordic markets (Denmark, Norway, Sweden, Finland and Iceland).  

 

Tourists spend significantly more at MOA than local shoppers do. U.S. tourists spend on average about 1.5 times more per visit than local shoppers. International visitors spend on average 2.5 times more per visit than local shoppers.


MOA shoppers stay longer

 “At the typical mall in the United States, people spend less than an hour and they only shop something on the order of five or six stores,” Brennan says. “When you go to MOA, this is not a convenience center. This is one where you’re going to stay longer – approximately three hours. So you’re probably going to be dining. You may well be taking in a movie. If you have kids, you’re going to go to the amusement park or aquarium, and they have exceptional events programs and they have the space for it with the rotunda. This new wing will have a similar space on a smaller scale where they can host all kinds of things. I can see fashion shows that can spotlight the kind of shops they want to get in there.”

Brennan also says MOA has done a good job of staying fresh -- both in terms of physical appearance and trend-right stores.

“When you look at what they’re doing with the old Bloomingdale’s space –bringing in L.L. Bean is a definite plus -- and Forever 21 has a huge store out there,” he says. “If you’re Forever 21 or Zara and entering this market, what mall would you like to be at? You can leverage the MOA to test it out. Plus, you get the added benefit that you’re getting these customers internationally but also nationally as well as the local customers.”


Sidebar on The Offices @ MOA:
New office building lands anchor

As part of the Mall of America expansion, Triple Five developed The Offices @ MOA, a 170,000-square-foot, Class A office building attached to the north side of the mall. It’s the first speculative office project in the Twin Cities since the downturn.   http://officesatmoa.com/

Supercomputer company Cray has committed to anchor the 10-story building, leasing 87,500 square feet on the top four floors. The company plans to relocate its 350-plus employees from downtown St. Paul by the first half of 2017.

The new building offers amenities that can help companies attract and retain talent, says Dan Gleason, executive director of brokerage services for Bloomington-based Cushman & Wakefield/NorthMarq, who’s leasing the building for Triple Five. He points to its proximity to the airport and both downtowns, its direct light-rail access, and MOA’s hotels, restaurants and 13,000 free, on-site parking spaces.

“One of the office trends is to increase the number of employees per square foot to create smaller, more efficient work stations, and here it works well because the mall has 13,000 parking stalls and the ability to utilize those during the day – Monday through Friday, 8 a.m. to 5 p.m. -- so you can really park the project as much as you like,” Gleason says.

As far as the mall itself as an amenity, Gleason says, in essence: “You have a 5-million-square-foot covered city with 50 to 60 restaurants, all the shopping and two hotels connected to the mall. For Cray, it was a big deal to have the use of those hotels, whether it be for overnight stays or the conference facilities.”

Gleason says the building was designed with continuous ribbon glass windows for lots of natural light and phenomenal views. “It’s a newly designed, Class A footprint with Class A finishes,” he says. “Cray will be able to design their space and brand the space. It will be a great branding opportunity for them.”

Gleason will continue marketing the building’s remaining 75,000 square feet and says it can accommodate a wide range of tenants, from as small as 2,500 square feet.

 

Posted at: 12:55 pm on May 25th, 2016

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