SALT LAKE CITY — One of Salt Lake's most unique shopping centers celebrated a long-awaited grand opening Monday, as Trolley Square welcomed a new Whole Foods Market store to its eclectic lineup of retail offerings.
With the addition of its newest tenant, the property now hosts 35 retail shops.
The grand opening culminated a $60 million renovation project that began when the mall was purchased in August 2006 by Portland, Ore.-based ScanlonKemperBard Cos. Since then, Trolley Square has added nearly 100,000 square feet of space with plans to increase the tenant roster to more than 60 by early 2013, according to property manager Dawn Katter.
"We really do believe that bringing on the Whole Foods store … will entice other retailers that haven't come to this market yet, (that) it really will be a good fit for them," she said.
While having a grocery store as a major anchor tenant is somewhat unusual, the move was received optimistically by local commercial real estate analysts.
"The ability of Trolley Square to land a high-end grocer like Whole Foods is going to help the center itself dramatically," said J.R. Moore, retail specialist for real estate firm CB Richard Ellis. "Any time you add a high-traffic-type tenant, overall your (customer volume) is going to increase."
Moore said a grocery store will "typically attract the same customer two to three times per week," which would create more traffic for the shopping center and potentially more potential customers for all the other stores in the mall.
"The question is whether the grocery store client … is going to (patronize) the other high-end retailers they've got in there," he said. "That is yet to be determined."
He called it "a very big win for Trolley Square to land Whole Foods" as its anchor tenant.
The new store will likely pique the interest of new potential tenants as well as benefit the existing retailers at the mall, according to Darrell Tate, retail real estate specialist for Commerce Real Estate Solutions. However, Tate said, "the jury is still out" on what the long-term impact would be.
"Do folks that are shopping for groceries … necessarily continue shopping for clothes and home improvement items?" he said. "That's a valid question."
Tate said what the tenant mix at Trolley Square would eventually look like will be determined over time. He said the mangers may choose a strategy similar to what has taken place at Valley Fair Mall in West Valley City — choosing retailers that cater to the unique purchasing habits of its increasingly diverse population area.
Meanwhile, the renovation at Trolley Square is indicative of the various retail development projects under way at shopping centers throughout the Salt Lake Valley, including Fashion Place Mall in Murray and City Creek Center in downtown Salt Lake City.
"Malls and retail in general can survive in (tough) economic times and whatever post-recession looks like," Tate said. "If the retail property has all the fundamentals of a strong retail location, those are the ones that will do well … even in tougher times."
Moore said some local cities, such as Draper, Sandy and Murray, have developed commercial corridors that have remained attractive to retailers over the years and will continue to be appealing regardless of the economic circumstance.
"There are definitely pockets … within Salt Lake County that are big targets for (retail) tenants," Moore said. "Those types of areas tend to do better and have tended to be more resilient during the economic downturn."
However, retail centers that rely too much on unique demographics or specialty merchandise will probably struggle to survive in the long run, Tate said.
"People are still going to spend money in retail, albeit less, which means there is going to be less retail done," Tate said. "Most likely, the retail business that does occur is going to be in the historically strong locations."