DeKALB – Northland Plaza owner Jahan Moslehi of Bridge33 Capital is so confident in the DeKalb shopping center’s potential that he travels all over the country speaking about it.
Seattle-based Bridge33 Capital is a commercial real estate company that buys distressed properties around the country and revitalizes them. Under the direction of Moslehi, who is the company’s co-founder and managing principal, Bridge33 Capital is bringing Aldi and Planet Fitness to Northland Plaza sometime later this year. The company has 24 properties in 12 states and is expanding its Illinois presence with properties in Chicago and Burbank.
“As I travel around, I actually talk about Northland Plaza a fair amount,” Moslehi said, “because I think it’s a very interesting case study into what’s happening with retail and shopping centers throughout the country.”
Bridge33 Capital bought Northland Plaza at the end of 2017 after the shopping center had endured a rough 10 years.
The plaza’s previous owner had taken out a mortgage for the property in 2007, Moslehi said. When the market fell and the recession hit, the plaza lost a few tenants, rent was dropped, consumers spent less money (because they had less money), and the owner was unable to make loan payments.
Bridge33 Capital acquired the defaulted mortgage when it bought the property for an amount Moslehi said he cannot disclose.
“J.C. Penney and Carson’s used to be great anchor tenants [for Northland Plaza],” Moslehi said. “They would draw traffic to the center, and those people would shop at other stores [in the plaza].”
With the changing face of retail – and an influx of online shopping dominated by unstoppable giants such as Amazon – Bridge33 Capital is looking to evolve the types of stores at the plaza.
“We’re replacing department store dinosaurs with Aldi and Planet Fitness, who are two of the biggest drivers of daily traffic these days,” Moslehi said. “You may go to Aldi or Planet Fitness three times per week, and all that traffic coming in is then going to stop at Bed, Bath and Beyond or Hobby Lobby.”
The plaza has 18 tenants and is leased at 64 percent capacity. Moslehi is eyeing a furniture store or a sporting goods store next.
Filling a niche
Mike Campagnolo, the owner of 64 Chicago-area and Indianapolis-based Planet Fitness franchises, said opening a business in DeKalb is allowing the fitness giant to fill a niche.
“For the most part, [DeKalb] is an underserved market for a high-quality fitness center at a very low cost,” Campagnolo said. “Planet Fitness has over 17,000 locations nationwide, and the crux of them are in larger cities, so the niche we’re filling is that gap in the middle-income, smaller, suburban areas.”
Planet Fitness has built success on its affordable, flexible memberships and judgment-free atmosphere where members of all shapes, sizes and walks of life are welcome. The facility will be 20,000 square feet, offer memberships for $10 a month and include tanning and massage chairs in addition to traditional gym equipment.
Campagnolo said total project costs are a little more than $2.5 million and will include renovations to the interior space, refacing of the front of the building and construction of a brand-new entrance.
Moving across the street
Also a low-cost and health-conscious option, grocer Aldi will move from 2569 Sycamore Road to a new and bigger space across the street at 2500 Sycamore Road.
Laura Branneman, vice president of Aldi’s Batavia division, said she’s excited to offer loyal DeKalb customers an improved in-store experience as part of a nationwide chain expansion project.
“We’re investing $1.9 billion to remodel and expand more than 1,300 U.S. Aldi stores by the end of 2020,” Branneman said. “This is a significant investment in our stores, but it’s really an investment in our shoppers.”
Like Moslehi’s desire to change the face of retail with the changing needs of consumers, Branneman said Aldi’s new DeKalb location will be 50 percent larger than its current space.
“The additional space is dedicated to weekly must-haves like fresh produce and organics, dairy, gluten-free foods and USDA-choice beef, as well as wide aisles to allow customers plenty of room to shop,” she said.
Construction on both the Aldi and Planet Fitness will begin in the next couple of weeks, and both plan to open by the summer.