Mall Developers Counting On Ultra-Lux To Survive
American Dream, the most expensive U.S. mall ever built at around $6 billion, lies across the Hudson River from Manhattan in East Rutherford, N.J. Nearly two decades in the making, the project formerly known as Xanadu became an eyesore as construction stalled and it cycled through a number of owners.
The sprawling shopping mall and entertainment center called American Dream is opening its luxury retail wing next month, a sign of budding momentum for the suburban New Jersey complex after a run of early setbacks.
The mall’s high-end shopping area is poised to open Sept. 17, according to Triple Five Group, the Canadian real-estate firm that developed the complex. It will boast many of the world’s premier luxury brands, including Hermès, Tiffany & Co., Dolce & Gabbana, and a Saks Fifth Avenue department store.
Shoppers can dine at the luxury wing’s Italian restaurant, Carpaccio, which has been a popular dining spot at Miami’s Bal Harbour Shops, or sip Champagne at Brüt bar.
The new wing is important to American Dream because luxury-goods retailers reported a recovery in sales, starting late last year, from shoppers eager to spoil themselves or friends after the pandemic-related lockdowns.
Shoppers can dine at the luxury wing’s Italian restaurant, Carpaccio, which has been a popular dining spot at Miami’s Bal Harbour Shops, or sip Champagne at Brüt bar.
The new wing is important to American Dream because luxury-goods retailers reported a recovery in sales, starting late last year, from shoppers eager to spoil themselves or friends after the pandemic-related lockdowns.
The complex opened in the fall of 2019 as the first mall in the U.S. to devote more space to entertainment, restaurants and theme-park rides than to traditional retail. Its nearly 90-acre site includes a 16-story indoor ski hill, a roller coaster, and a water park with a steep slide that rises 14 stories high.
American Dream closed in March 2020 for six months because of the pandemic. That resulted in delayed store openings and, eventually, a default in its mortgage repayment that put nearly half the revenue of Triple Five’s two other giant malls at risk. Representatives of the firm didn’t respond to requests for comment about the status of the debt default.
Now, more than 150 of the mall’s retailers are open and some 70 stores are under construction. A representative for American Dream said the mall will be more than 85% leased by year-end, edging closer to the 90% or higher occupancy levels found at the top-performing U.S. malls.
Since reopening in October, foot traffic has steadily increased as shoppers looked to escape home after months of lockdowns. Average weekly visits in the four-week period from June 21 through July 18 were 19% higher than the four-week period that preceded it, according to mobile-device location data from analytics firm Placer.ai. These visits were 69% higher than the four-week period before that.
“Traffic has not been impacted by the Covid-19 Delta variant,” said the American Dream representative.
Saks Fifth Avenue declined to say what incentives the developers of American Dream offered to convince it to open a store at the new mall, citing a confidentiality agreement. But in 2016, Saks Fifth Avenue closed its store at a competing New Jersey luxury mall to move to American Dream. The new store will be its only full-price store in New Jersey.
The luxury wing’s coming opening and the rising foot traffic have some analysts cautiously optimistic about the mall turning a corner after its bumpy start.
“If new sections of the mall can draw a crowd, there is real reason to believe that the mall can truly begin living up to its immense potential in the near future,” said Ethan Chernofsky, vice president of marketing at Placer.ai.
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