The announced departure of Nordstrom from Oak Park Mall to a new home on the County Club Plaza was among the biggest real estate news in the entire metro area last year, according to LANE4 Property Group.
The company, which has been behind a number of redevelopment projects in northern Johnson County the past several years, this week released its annual retail report, surveying trends in lease and occupancy rates in sub-markets across the metro. LANE4’s brokers expect the Nordstrom departure will have a significant impact on the northern Johnson County market, leaving a “massive void” that will “will indisputably spur additional activity” both in Johnson County and at the Plaza.
“The biggest piece of retail news in 2018 was the announcement of Nordstrom’s upcoming relocation from Oak Park Mall to the Country Club Plaza,” reads the report. “This will simultaneously breathe new life in to the Plaza and pose a potentially existential threat to the future of Oak Park Mall.”
Nordstrom in February 2018 announced its intention to leave Oak Park after its current lease expires and move to a new space on the Plaza in 2021. In the wake of that announcement, mall owner CBL & Associates Properties, Inc., out of Tennessee, said Nordstrom’s departure “provides us with an excellent opportunity to transform Oak Park for even greater success in the future.” Three other large department stores, JCPenney, Macy’s and Dillard’s, remain as anchors for the center.
Mixed-use projects abound across northern Johnson County
In additional analysis of the northern Johnson County market, LANE4’s report notes that “Mixed-use and multifamily projects are leading the charge in the area, and despite common themes of development delays and friction with the governing municipalities, quite a few projects made significant progress in 2018.”
Downtown Overland Park is among the hotbeds of activity, with six new mixed-use and multifamily projects either recently opened or under construction.
“In total, the new developments bring over 625 residential units and 160,000 [square feet] of office space to the Downtown area in under two years,” reads the report.
Similarly, Lenexa’s City Center development is filling out, and is sparking additional redevelopment in the surrounding areas.
“Sonoma Plaza is well underway on the southeast corner of I-435 and 87th street, filling in the last vacant quadrant of the intersection,” reads the report. “A McKeever’s grocery store has begun construction on the site, and additional retailers are expected to be announced soon. The development will also bring 320 residential units in multiple buildings.”
Overall shopping center occupancy rates in the north Johnson County sub-market have fallen nearly 4 percent from 2017 to 2018, with current occupancy at 90.4 percent, according to LANE4’s survey. Lease rates, however, have ticked up substantially to $13.98 a square foot — 11.5 percent higher than the previous year.