When Di Bruno Bros. opened at Strafford Shopping Center this past March, the excitement in surrounding Wayne, Pennsylvania, was palpable. The beloved Italian marketplace—a visual as well as a culinary feast with an 80-year history in Philadelphia—was putting la dolce vita in easy reach for the whole community. And thanks to a multimillion-dollar shopping center renovation overseen by Ken McEvoy, a Principal at Equity Retail Brokers (ERB), it was all happening at a site that had been smartly repositioned for its next 50 years of life.
Strafford was built in the late 1950s at 367-387 W. Lancaster Ave. The 30,000 square-foot property was clean and well-maintained, but simply due to its advanced age it was also in danger of becoming dated and potentially starting a downward slide, noted ERB Principal David Goodman.
“In managing Strafford Shopping Center on behalf of the three families that own it, Ken was bullish on its location and understood the enormous potential to ramp up its value, now and into the future,” Goodman said. “The untold story here is just how hard he worked to see this project through to success. Day after day for the better part of three years, Ken has collaborated with key stakeholders to overcome one challenge after another, from construction snags and regulatory roadblocks to the chaos of Covid-19.”
These days, just about all new shopping centers are designed with large spaces for high-volume, traffic-driving anchor tenants. Strafford, which Equity Retail Brokers has leased and managed for the past 15 years, hailed from an earlier era when unanchored properties were commonplace in the American suburbs.
Standing on the site and surveying the centers’ 16 different suites, McEvoy had thought many times about how the consolidation of a few of those tenants could make room for a larger operator. “It would be a major improvement, but what we needed was a catalyst to start the process,” he noted, “fortunately we recognized exactly such an opportunity in 2018.”
All at once, McEvoy explains, changes in the lease status and/or business plans of four different tenants (an Italian ice business, a laundromat, a hair salon, and a kitchen supply company) made it viable to convert their spaces to higher and better use. “I talked to the owner and said, ‘If we put all of these spaces together, we can regain about 6,400 square feet,’” McEvoy recalled. “We started thinking about knocking the old building down and putting in a new two-story building. It would give the center more of an anchor.”
No Easy Decision
Maximizing asset value is fundamental to the culture at Equity Retail Brokers. On occasion, that means coming to clients with a “big ask.” For the families that own Strafford Shopping Center, agreeing to McEvoy’s proposal for a renovation required a leap of faith. “Owning a property is a bit like having a stock or bond that automatically produces consistent returns for the owners,” Goodman explained. “To move forward with a major construction project and repositioning, you need to shift into a mode of active reinvestment and, to some extent, risk-taking. Not every owner is willing to do that.”
Nor is it appropriate in every situation, but in speaking with the owners, including Laird Bevitz, the families’ Managing Partner for the property, McEvoy emphasized factors that made Strafford a strong candidate for a reboot. “Laird was a strong advocate for this project,” McEvoy said.
The strength of the location was one of those positive factors. “This is one of the strongest markets in greater Philadelphia. It’s an affluent area – always has been – and is right on the Main Line,” said McEvoy, referring to the old rail line that runs northwest from Center City Philadelphia parallel to Strafford’s location on Lancaster Avenue.
Land was cheap in the 1950s. As a result, the property has an unusually large parking field for the area and easy ingress and egress. “That’s an important consideration for local shoppers and it’s part of what interested Di Bruno Bros. in the project,” McEvoy noted.
As mentioned, the formerly dated appearance of the decades-old center risked putting it at a competitive disadvantage. In any case, expensive outlays would be required periodically due to regulatory changes that had occurred since the property was built.
“Whenever any tenant leaves the property, you’re required to bring its space up to ADA and other codes,” McEvoy explained. “It can be more cost-effective to handle all of that in one fell swoop. It’s just one more reason why we felt the change was merited here. Fortunately, the owners agreed.”
Seeing it Through
Fast forward to today and the results of ERB’s collaboration with the owners were clearly worth pursuing. As noted by McEvoy, they include:
- The successful consolidation of five tenant spaces within a largely reconstructed building that properly showcases Di Bruno Bros.’ new 7,640 square-foot Italian marketplace.
- An attractive facade upgrade and modernization throughout the rest of the 30,000 square-foot center.
- A strong uptick in additional traffic to the property.
- More leasing inquiries by higher-end retailers, restaurants, and service tenants.
- A solid increase in rents moving forward.
- And a much-stronger competitive position vis-a-vis other shopping centers in the marketplace.
But getting there wasn’t easy. In our next post, we’ll cover the many obstacles that arose on this journey. They involved McEvoy steeping himself in the complexities of 1950s-era structural steel, foundation work, and related government regulations, not to mention the onset of a global pandemic that imperiled the entire undertaking.
“From the standpoint of maximizing asset performance and value, our clients can benefit tremendously by sticking with us as we guide them through projects like this, even when they get difficult,” Goodman said. “Doing nothing can often seem like the easiest route. I have tremendous respect for the way Ken, the owners, and the tenants saw this successful project through to the end.”