Shopping Center Revives After Anchors Depart

When a customer of Lai Thai restaurant - who had not visited for awhile - pulled into the parking lot, he had to hunt for a space. That was the tipoff that Lonore Plaza was doing well.

The 21-year-old strip mall on the northeast corner of Dempster and Harlem is not plagued with the vacancy problems of similar centers for several fortuitous reasons. Lonore Plaza has lost key tenants, but found replacements even amid the shaky economy.

Location is key, according to owner Jay Brown, who runs Jaylon Management Company, based in Evanston. Brown claims 75,000 cars daily pass through Dempster’s intersections with Harlem and Shermer. (Shermer borders the east side of the center.)

But Brown has cultivated a good reputation as  a landlord. He typically charges what his tenants say are reasonable rents. And he cleans the Morton Grove shopping center seven days a week.

So when anchor tenants Factory Card Outlet, Pet Supplies Plus and Boston Market left their stores, Brown was not faced with yawning vacancies, endemic of recent retailing, that impacted his pocketbook and in turn hurt longtime stalwart tenants like Lai Thai, Subway, Great American Bagel and Zootcuts.

Lonore Plaza has experienced an influx of businesses like Sarpino’s Pizza and Tava Indian restaurant. Last August and September, respectively, came the arrivals of the Work N Gear clothing store from across Dempster and Green One Price Cleaners to plug up the space left by Factory Card Outlet.

Brown still has 3,200 square feet of storefront to lease. But under the circumstances, he’s satisfied with an 85 percent occupancy rate that he expects to grow this year, with two retail prospects in the talking stages.

Brown said the design of the center permits motorists to view the center from all the adjoining streets. In contrast, the nearly-vacant Riverbank Plaza further east on  Dempster can only be viewed by westbound motorists, as the stores face east.

But he uses management style to help his business.

Rent undercuts competitors

Knowing retailing is a buyer’s market, he has dropped rents. Brown said he charged $2,975 for 1,200 square feet, about the size of Subway, his original tenant. If the market had not crashed, Brown might have asked for $3,400.

“Where there are vacancies and no parking east of the train tracks on Dempster in Morton Grove, you can charge $1,600 a month, but it doesn’t matter if you have no business,” said Brown.

“We always try to stay below market in a good way. Maybe $2 a square foot below competition. We manage properties in other areas, and see a lot who are not doing well.  You can only charge as much rent as a business can afford to pay, and make a profit. Very few can afford $30 a square foot rent and make money. A furniture store has to have low rent as sales per square foot are low. You tailor rent for what businesses can afford. Eighty  percent of shopping center owners don’t realize that and charge crazy rents.”

As an example, the six-year-old Metropolitan Square residential-retail development in downtown Des Plaines is suffering as a result of high rents necessitated by high taxes and the owner's financial problems. Nearby older buildings have gobbled up most incoming stores by offering lower rents.

Brown has crews cleaning the center every day. “We try to keep up property,” he said. “When weather improves, we’ll do some things to modernize it.”

‘Green’ cleaners happy with new location

Brown’s policies were one motivation for Green One Price Cleaners to move in. The family-owned business, evolving from a conventional cleaners in Glenview, has begun an organic, “green” dry cleaners in which cleaning chemicals are recycled rather than dumped into the groundwater.

“We picked this location based on space availability, cost of the rent and parking,” said Green One manager Rick Sunshine. “Real good rates and we’re real happy with it.”

Sunshine is thankful Lonore Plaza does not have gaping vacant storefronts, a potential detriment to his business.

Beata Magiet is in agreement. Manager for 13 years at the Zootcuts hair-styling salon, open in Lonore Plaza for 19 years, Magiet is thankful Brown found replacements for the departed stores.

“It’s nice to have cars back in the parking lot,” she said. “To pull up and not see open windows is really nice. He (Brown) has done a good job at trying to bring them in and fill up the vacancies. The rent is good and he has a good maintenance guy named Alex who takes care of the mall.”

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