Retailers to divvy up
Pearlridge space

The anchor spot formerly
occupied by J.C. Penney
will be broken up into
many smaller retail sites

Bigger is not always better.

INspiration Hawaii Inc. announced plans yesterday to expand the tenant mix at Pearlridge Center, Hawaii's second largest mall, by breaking its two-level 103,000-square-foot anchor spot into smaller spaces.

The subdivided space, called Pearlridge Uptown II, will add about 30 more retailers to the mall, said Joett Colgan, spokeswoman for INspiration Hawaii, which is landlord for the space.

Retail spaces will range from 326 square feet to approximately 40,000 square feet, giving smaller retailers and kiosk businesses an opportunity to enter the market, Colgan said.

The company, which is gutting the space formerly occupied by J.C. Penney, is looking to turn over leases to retailers in February, with a target opening of mid- to late summer, Colgan said. Colliers Monroe Friedlander Inc. is the leasing and managing agent for the project.

"We've had a very good response from some local businesses that would like to expand and from mainland companies that would like to come to Hawaii," Colgan said.

Regardless of the tenant line-up, it will open Pearlridge's doors to a wider number of retailers, said Carol Pregill, president of the Retail Merchants of Hawaii.

"With this plan, the sky is the limit," Pregill said, adding that there's plenty of room for sought-after stores like Crate & Barrel, Pottery Barn and Linens 'n Things that cater to the home furnishings sector.

The Pearlridge space has been unoccupied for more than a year, ruining what would otherwise be a retail vacancy of about 3 percent for Pearl City, said Mike Hamasu, director of research and consulting for Colliers Monroe Friedlander.

"Other than this space, Pearlridge is pretty much 100 percent occupied," Hamasu said.

INspiration purchased the department store space from Kin Properties, a Florida company, for about $1.75 million after anchor tenant J.C. Penney vacated the property in January 2003. Thomas Sorensen, INspiration owner, had considered several options for the space, including relocating his nearby INspiration showroom or recruiting mainland big-box retailers, but the space was unoccupied for more than a year.

"It would have been easy for us if we could have found the right anchor tenant, but the timing was wrong for a lot of the larger tenants," Colgan said, adding that INspiration began considering breaking up the space after watching Ala Moana Center subdivide its former J.C. Penney space.

"What's happening at Ala Moana is amazing," Colgan said. "You can see from the success of their project, that there is a lot of retail interest in coming to Hawaii."

In response to the economic realities bearing down on larger, national retailers, Ala Moana early on decided to subdivide the 185,000-square-foot anchor space once occupied by J.C. Penney into about 30 smaller shops and restaurants, said Dwight Yoshimura, senior vice president of management for General Growth Properties, owner of Ala Moana Center, Victoria Ward Centers and the Windward Mall.

Offering a greater breadth of retail choices also better positions Ala Moana to compete against big-box retailers like the double-decker Wal-Mart and Sam's Club complex, which opened this month on neighboring Keeaumoku Street, Yoshimura said.

"When we looked at both the highest and best use of the space, it was smaller retail," Yoshimura said. "It definitely offers more selection for the customers."

Yoshimura said most mall-level and third-level retailers will open for business in November, with others opening during the second or third quarter of next year.

The Sharper Image, Guess, Betsey Johnson, Fendi, Sandal Tree and Maui Divers have already opened, Yoshimura said, adding that St. John and Sole Mio will open late this month. November openings include: Lady Foot Locker, Animation Magic, Tori Richard, Hollister, Journeys, Pacific Sunwear, Abercrombie, the Children's Place and Build-A-Bear Workshop, he said, with Ruby Tuesday slated to open in December.

The subdivision of large anchor spaces by Pearlridge and Ala Moana Centers will improve choices and service for consumers, Pregill said.

"Retailers across the board thrive on competition," she said. "Competition creates a better marketplace for businesses; everybody benefits from more consumers coming into an area. It also creates a better marketplace for consumers, who benefit from a larger selection of products."