A once lively mall in northern New York state near Canada that attracted small-town and cross-border shoppers to outlets such as Sears, Ames and Bon-Ton is no longer selling its stockpile of goods. It's been repurposed into a giant warehouse, a symbol of changes underway as rents on industrial property rise faster than on retail real estate.
Gerry Shapiro's company, Groupe Shapiro, purchased the St. Lawrence Centre mall in Massena, New York, for $2.88 million in January 2017 and immediately invested in attracting more foot traffic to the stores. Heritage Group built the mall in 1990 for a cost of $55 million.
"When he bought it, it was a struggling retail property but Shapiro has a history of turning things around," said Michael Levy, head of acquisition and asset management at Groupe Shapiro. "He never shies away from a challenge."
Groupe Shapiro is transforming the mall as industrial rent increases in the market outpace the national average, according to CoStar Market Analytics. Rents for warehouses and distribution properties have increased 3.8% year over year in the Upstate New York area, compared to 2.3% nationally, according to a CoStar report.
Retail rents have increased by 1.4% year over year in the Ogdensburg-Massena market compared to a change of 1.8% nationally, according to a CoStar report.
As for St. Lawrence Centre's former life as a mall, the property was chugging along until it ran into the pandemic, when malls across North America were forced to close to slow the spread of COVID-19.
"It was arguably a success story at the time but unfortunately nobody has a crystal ball. COVID hit and destroyed everything," Levy said in an interview. "The State of New York was completely shut down. There was no way of salvaging it. Everybody just stopped paying and closed."
The owner studied the possibility of turning the property into residential, seniors housing, or other institutional uses. It managed to attract the Veterans Affairs department to rent some space for a while.
Shapiro's company eventually chose to transform the mall into a logistics-transport type of property called the St. Lawrence Industrial complex, or SLIC.
Large tenant landed
The Shapiro group found a taker for approximately 300,000 square feet of space in the heart of the erstwhile mall. That tenant, Columbia Frame Distribution Centre, occupies a space previously filled by Ames and Hills stores and the central food court.
Space at SLIC can be leased for under $10 per square foot per year, far less than the $15 to $18 per foot asked for similar space in Cornwall, Ontario, a short distance across the Canadian border, Levy notes.
The facility has ample electricity and has been modified to contain numerous loading docks, he said. This helps Groupe Shapiro market the property, and the landlord said it has one major unidentified prospect poised to take 50,000 square feet in a deal expected to be finalized this spring.
The rest of the mall remains up for rent with available spaces ranging from 30,000 to 200,000 square feet, according to the SLIC website. One 35,000-square-foot section comes with 30-foot ceilings, while the others' measure 17 feet.
A large section of the transformed mall has been devoted to self-storage units and Levy said that much of the rest of the former mall is effectively being demolished and rebuilt for its new purpose. A JCPenney department store still operates at the property.
Levy said that any discussion of the St. Lawrence Center prompts locals to recall when it was a bustling place full of life.
"It was the place to be, they tell me, it was very prominent and had every retailer," he said.
Those now-departed retailers include Record Town, FYE, GameStop, Champs, Waldenbooks, Spencer's Hallmark, Kay Jewelers, Belden Jewelers, KB Toys, Olympia, Radio Shack, Arby's, A&W, Sbarro, Subway and Wendy's.
Though they have all moved out, the industrial space still lives on, Levy said.