By Meghan Hall
The Alderwood Mall in Lynnwood., Wash., claims that visitors can find “anything they need under one roof,” and soon, that will quite literally be the truth. In the coming months, Brookfield Properties—the mall’s owner—will complete a substantial redevelopment on a portion of the property that will add a mixed-use component to the super-regional center. The repositioning will bring 24/7 activity to a surban supercenter at a time when its anchor retailer–like many around the country–have shuttered.
“The great thing about our sites is that they’re somewhere between 60 to 100 acres of A-plus real estate in great demographic marketplaces,” explained Brookfield’s Executive Vice President of Development, Adam Trip. “Our job is to unlock and tap the potential of that real estate.”
Brookfield acquired the Alderwood Mall Sears property as part of a 2015 transaction and originally, the goal was a sale leaseback with rights to downsize. However, as the retail landscape began to shift dramatically and as the Puget Sound itself saw its own economic expansion, Brookfield saw an opportunity.
“As we got into Alderwood, we identified a scenario where we could create value-add development,” said Trip. “…Retail is an interesting real estate asset class because it’s always been dynamic, and the way that technology and COVID-19 influenced our business has accelerated the pace of that change.”
“Alderwood is a very successful retail asset for us, and it’s one that we’re very proud of,” noted Trip. “But when you have residential you can bring a little more energy and life into the property.”
With Sears closed, Avalon Alderwood Place—the mall’s newest addition and residential component—will act as an anchor. Brookfield has partnered with Arlington-based AvalonBay Communities on the project, which will bring 328 residential units to the site. Apartments will be a wide mix of studios, one-, two- and three-bedroom units. Amenities will include a terrace lounge complete with window seats and kitchenette, a fitness center and an indoor recreation area that will encompass a children’s play area, indoor games and video entertainment. In all, more than 8,000 square feet of amenity space is planned. Designed by GGLO, the units will be divvied up into two buildings which will be connected by a glass bridge. Retail will occupy the ground floor.
“Interestingly, we fell into a rut in our industry where “anchor” became ubiquitous with a department store,” said Trip. “But the reality is our business model is that anchor uses drive traffic and create moments of interest and opportunity…Anchors do not have to be department stores. Anchors can be any use that bring activity to that site.”
According to Trip, the strategy fits within an even larger trend of creating what Brookfield calls “15 minute cities,” where residents can work, play and live in a tight geographic area, greatly limiting the need for commuting. Brookfield believes that the current work from home environment has only enhanced the viability of this concept.
Additionally, Lynnwood’s mixed-use housing stock is not as built-out as other Seattle communities, and the project would bring more of a well-demanded product type to the market.
“…The renter profile seemed to align with a demographic that would value the residential opportunity in a more mixed-use, active environment,” said Trip. “Much of the existing stock is independent; you have to travel from your home to areas where you would recreate, shop or dine. We saw the opportunity to add something in a viable residential market that was a little bit of a more dynamic product.”
When it comes to trends, Brookfield is ahead of the curve. Construction is already underway, and early occupancies for the project are expected in 2022—a timeline far ahead of several other mall revamps in the region. The Northgate Mall in Seattle has been working through entitlements over the past several years, and will be a long-term undertaking. More recently, Kimco Realty received approval to completely revamp The Marketplace at Factoria in Bellevue. Construction has yet to begin, however, and will occur over several years.
For Brookfield, it made sense to pursue Alderwood’s transformation sooner rather than later.
“We’re bullish on what we’re trying to achieve and the product class we are delivering,” said Trip.