When store closures and retailer bankruptcies are creating a wreck for retail REITs, industry leader, Simon Property Group Inc. SPG, surely knows how to battle the blues. The company has started construction to bring the AC Hotel by Marriott brand to the shopping destination — Sawgrass Mills.
Slated to open in late 2020, the eight-story, 174-room hotel will be located near The Colonnade Outlets at Sawgrass Mills, close to its recent expansion. It will have modern guest rooms and public spaces, an AC Lounge, a communal creative space featuring a full bar serving local beers and hand-crafted cocktails, including the brand's signature Gintonic, together with tapas plates. Moreover, the property will provide a European-style breakfast as well as a 24-hour fitness center, per the company’s press release.
Notably, Sawgrass Mills, the largest outlet and value retail shopping destination in the United States, is in the middle of a multi-million-dollar revamp. This refurbishment is aimed at creating a modern ambience throughout the shopping center.
With more than 350 stores, this enclosed, air-conditioned and climate-controlled mall situated 30 minutes from the Miami International Airport and 15 minutes from Fort Lauderdale-Hollywood International Airport has a number of premium names in its roster. These include Nike NKE, Tommy Hilfiger, Michael Kors and Saks Fifth Avenue OFF 5TH, Bed Bath & Beyond BBBY, Target TGT, Marshalls and electronics superstore, BrandsMart USA.
Further, with people flocking to this shopping center from around the globe, addition of the AC Hotel by Marriott is a strategic fit. Also, the move is in sync with the company’s strategy of adding mixed-use components to its shopping centers.
In fact, Simon Property is navigating through the retail apocalypse by actively restructuring its portfolio, aiming at premium acquisitions and transformative redevelopments. Over the past years, the company has been investing billions to transform its properties focused on creating value and drive footfall at its properties. The transformational plans included addition of hotels, restaurants, residences and luxury stores.
Additionally, the company is undertaking strategic measures to help online retailers fortify their physical presence, besides taking steps to support omni-channel strategy. Simon Property is exploring mixed-use development option which has gained immense popularity in recent years as it helps catch the attention of people who prefer to live, work and play in the same area. Nonetheless, implementation of such measures requires a decent upfront cost and therefore, may limit any remarkable growth in its near-term profit margins.
Simon Property currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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