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March 7, 2016

Cook's Corner mall investment leverages regional drawing power

Courtesy / Katz Properties
Courtesy / Katz Properties
Cook's Corner in Brunswick.

BRUNSWICK — The new owner of Cook's Corner sees a high-traffic, "community power center" that still has plenty of opportunity.

Katz Properties, which paid DDR Corp. $13.25 million for the 302,003-square-foot shopping center, sees potential to update the property, a complex of buildings that date from 1967 to 1981. The center includes Sears, TJ Maxx, Staples, Big Lots, Dollar Tree, a Regal Cinema and Applebee's, among other tenants. It sits on 32.5 acres near the intersection of Route 1 and Route 24. The center has an occupancy rate of 84%.

"We're looking at this as an opportunity to work on the redevelopment of the shopping center, with a long-term plan to hold and improve it," said Daniel Katz, reached by phone at the company's headquarters in New York.

Katz Properties is a real estate investment, development and management company that focuses on shopping centers along the East Coast, where its holdings now total 4 million square feet. The firm's acquisition criteria include properties that are 50,000 square feet or more, with a value of at least $10 million.

The seller, Beachwood, Ohio-based DDR, is a real estate investment trust that owns and manages 367 retail properties, representing 115 million square feet. DDR bought the Cook's Corner property in 1997. Asked to comment on the sale, DDR senior transactions associate Matthew Wallace said via email that, as a publicly traded company, DDR doesn't discuss transactions outside of its earnings calls.

The town assessed the value of the center at $16 million, according to Linda Smith, Brunswick's economic development director. Katz said redevelopment is in the initial planning stage at the moment and he declined to cite specifics or a projected outlay.

It's the first Maine acquisition for Katz Properties, though it has other involvement in the market. Katz serves as third-party manager of Portland's Northgate Shopping Center, which is anchored by a Shaw's supermarket.

Katz Properties has a focus on "necessity retail" that usually draws the company to properties with a grocery anchor, because that's proven fruitful in generating a stable flow of consumer traffic through the ups and downs of the economy, Katz said.

Despite gains in online shopping, storefronts continue to serve a purpose, even working hand-and-hand with their online counterparts, Katz said.

"We believe people like to have a place to go and shop," he said. "In what people call 'omni-channel retail,' where stores act almost as showrooms for their own brands, we do see a lot of cross-shopping and comparing going on. But ultimately, people still like getting things that same day if they can. We also find that having the entertainment component in retail — restaurants, movie theaters, bowling alleys —is a really nice draw and gives people in the community nice things to do."

Planned upgrades welcomed by town

Smith of the economic development office said plans for redevelopment will be welcomed by the center's customers.

"I think it needs a refresh," Smith said.

Smith said town officials were pleased with outreach from Winslow Property Management, Katz Properties' affiliate management company, which will provide leasing and property management services.

"That sent us a great signal, as a town. They're saying, 'We're here in your community and we want to have a conversation with you,'" Smith said.

What would the town like to see from the new owner?

"For us, it's about having them present and interested in being an active community partner, and willing to make an investment to attract people to Brunswick," Smith said. "I think these folks are clearly signaling that they made the investment and expect to be active. We've been fortunate with Brunswick Landing doing well and with our downtown doing well, and this is the third major piece for us. Cook's Corner is a critical part of the community's fabric."

Katz said his team makes a point of engaging with local communities.

"We do quite a few community events at our shopping centers, almost across the board, from summer barbecues with music, to community outreach programs, to helping charitable organization do events," he said. "We like to get involved. After all, our partnership is with the town, with the people who live in the town and with the retailers. Getting everybody together is a big part of what we do."

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