Saturday, August 02, 2003
Copyright © Las Vegas Review-Journal

RETAIL: Chelsea acquires Belz mall

Factory outlet center snapped up in $104 million deal

Roseland, N.J.-based Chelsea Property Group said Friday it purchased the Belz Factory Outlet World shopping center from a privately held investment group for $104 million. Photo by Christine H. Wetzel.

On the same day it welcomed shoppers to its latest retail center in downtown Las Vegas, Chelsea Property Group did a little shopping of its own.

Wasting little time in its attempt to become the dominant player in the local outlet shopping sector, the Roseland, N.J.-based company said Friday it purchased the Belz Factory Outlet World shopping center from a privately held investment group for $104 million.

News of the move was released only two hours after Chelsea and partner Simon Property Group opened the Las Vegas Premium Outlets, a $95 million shopping center at 875 S. Grand Central Parkway near Interstate 15 and Charleston Boulevard.

"It gives us the opportunity to control the market," Chelsea spokeswoman Michele Rothstein said of the purchase.

Within the next few weeks, the former Belz center will be renamed the Las Vegas Outlet Center in an effort to bring it in line with Chelsea's worldwide brand. The company currently operates 60 shopping centers in 30 U.S. states and Japan.

Rothstein said Chelsea began work on its downtown project last summer believing it would co-exist and compete with the Belz center, where stores typically offer lower-priced products than those found at stores operated within Chelsea's Premium Outlet brand centers. Now that Chelsea controls both properties, she believes it's better positioned to meet the needs of customers of varying income levels.

"As with hotels on the Strip, there is common ownership but individual properties that cater to different audiences," Rothstein said. "We've got the bookends and have the full span of the market covered, from moderate to high-end (products)."

Shawn Barashy, senior vice president with Lee & Associates Commercial Real Estate Services, said Chelsea's dominance should help it to stabilize rents at both centers, as well as improve visitor traffic by balancing the centers' overall tenant mix.

"A landlord's goal is to make sure its tenants make money," Barashy said. "And a company like Chelsea has the experience to put in the right mix of stores that will bring in shoppers."

Barashy said Chelsea's lone remaining competitor, Coral Gables, Fla.-based Talisman Cos., should survive provided it continues to offer an attractive mix of tenants at its 400,000-square-foot Fashion Outlets of Las Vegas in Primm.

"In Las Vegas, it seems like whenever we add something else it only brings in more visitors," Barashy said. "I don't think Primm was getting a lot of the same customers as Belz."

Belz Factory Outlet World opened at 7400 Las Vegas Boulevard South near Warm Springs Road in 1993. At the time, the center had 255,000 square feet of leasable space but was expanded to its current 477,000-square-foot total three years later. Its 130 tenants include Danskin, Reebok, Liz Claiborne, Pfaltzgraff and Tommy Hilfiger.