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Shopping Centers Today -> April 2001
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NORDSTROM DEAL A SIGN OF SUCCESS FOR VA. CENTER
By Dave Bodamer
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In the midst of one of America’s fastest-growing counties — Loudoun County, Va. — Dulles Town Center, the first regional mall built in the area in nearly a decade, has been a strong presence in the two years since it opened.
In the latest testament to that fact, Nordstrom, which has canceled already delayed openings at half a dozen projects in recent months, has committed to opening at Dulles in 2002. The addition will grow the center to 1.4 million square feet, and serve as the centerpiece of a 554-acre master-planned residential/office/retail development that is in the first phases of growth.
The regional mall, a joint effort between Lerner Enterprises, Bethesda, Md., and Connecticut General Life Insurance Co., Hartford, Conn., is one of the largest shopping center developments to debut in the northern Virginia market in the past decade and, in its two years in existence, has capitalized on the region’s explosive growth.
Considering it recently decided not to participate in a string of other projects, Nordstrom’s decision to locate at Dulles Town Center is a validation to its developers that the project has proved successful in its first two years. Nordstrom pulled out of projects in Cincinnati; Pittsburgh; New Haven, Conn.; and Nashville, Tenn., and delayed opening at the Short Pump Center, Richmond, Va., at the same time as it signed with Lerner.
“That’s exactly the point,” said Arthur N. Fuccillo, Lerner’s vice president of development. “Nordstrom saw the tremendous growth in the area and saw our project, and we welcomed them.”
Nordstrom echoed that sentiment.
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“This past September we signed the letter of intent to enter the project. Since then we have been reviewing real estate projects, and we have pulled out of a few, but [Dulles Town Center] is staying on schedule,” Nordstrom spokeswoman Paula Weigand said. “What we like about the project, what’s appealing to us is that it’s a super-regional mall, and it’s drawing from a very large region. It’s complemented by a strong residential area, and we like the hotel projects. That combination of the residential area with strong retail already at the mall made us feel that it continues to be a strong project.”
The enclosed regional mall opened in August 1999 and has maintained an occupancy rate of more than 90%, according to Lerner, which declined to release sales-per-square-foot figures. The center is anchored by Hecht’s, Lord & Taylor, J.C. Penney and Sears, with Nordstrom joining the mix in 2002. Along with the 144,000-square-foot Nordstrom, Lerner will add 60,000 square feet of in-line mall space.
Fuccillo would not classify the center as upscale but said it has higher-quality tenants and listed apparel retailers Banana Republic and Abercrombie & Fitch as good examples of its tenant roster. The center also boasts an open food court and a large staging area enabling the facility to host events that other malls in the region could not. For example, the mall recently hosted shows put on by the Big Apple Circus.
The mall is situated in Loudoun County, one of the fastest-growing counties in the United States, and adjacent to Fairfax County, one of the wealthiest counties in the country. Loudoun County’s population more than doubled in the past decade from 86,179 residents in 1990 to 172,173 residents in 2000, according to the county’s economic development office. “We knew Dulles Town Center would fill a void in Loudoun County, but what we’ve found is that many Fairfax County residents have ‘adopted’ us as their hometown mall as well,” Fuccillo said.
The population is expected to increase an additional 76% in the next 10 years to 304,000. The county is close to the area’s technical base. America Online’s corporate headquarters and regional headquarters for MCI, Oracle and UUNet are all in the region.
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| Dulles Town Center features a large staging area that allows for shows to be put on for shoppers. |
“As the Washington area continues to expand, many existing corporations have decided to benefit from the tremendous advantages and quality of life this area has to offer,” said Cynthia Richmond, deputy director of the Loudoun County Department of Economic Development.
Area brokers agreed with that assessment.
“Basically with Loudoun County you’ve got one of the hottest markets in the D.C. metro area,” said Alan Luger, a principal in the Rockville, Md., office of the Divaris Group, a real estate services firm. “Dulles Town Center really is the first regional mall developed in this metro area in the last 10 years, and it’s been a very successful project. Attracting Nordstrom attests to that.”
Luger also pointed out that the project has spurred a burgeoning adjacent project in AIG Baker’s Dulles Town Crossing, which includes a mix of big-box retailers, including Wal-Mart and the recently signed Nordstrom’s Rack concept.
“The growth of retail in Loudoun has followed growth in residential and office. You don’t get retailers to come without customers,” Luger said. He added that the county’s growth figures for the decade might be low. “Demographics sometimes have a difficult time tracking explosive growth like what is occurring in Loudoun.”
Lerner, which has experience in the Washington, D.C., market, having constructed five other regional malls in the area, including the 2 million-square-foot Tysons Corner Center, has a broader vision for Dulles. The mall is just one piece of a much larger development that will ultimately include 3.4 million square feet of office space, 800 luxury apartments and 400 town houses. Lerner has so far just scratched the surface in developing the 554 acres it controls with 400 luxury apartments under construction, the first office building, a Marriott Courtyard hotel and 100 town houses. The center is also situated just five miles away from Dulles Airport.
“I used to joke that if we had a hospital and cemetery in the mix, you’d never have to leave the area,” Fuccillo said.
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