Timing Is Everything
The Commons at Federal Way was renovated and retenanted at the right time for the market.
Randall Shearin

Panera Bread is one of the latest restaurants to open at The Commons at Federal Way.

When Steadfast Companies purchased SeaTac Mall in the Seattle-area town of Federal Way, Washington, in 2003, its timing was right. The center, opened in 1975 by The Hahn Company and a local partnership, had seen better days. It had two strong anchors, one vacant and one that was about to close. In addition, the area itself had changed from the time that the center had been built.

Minor renovations had been done since the center’s opening, and a food court was added during a major renovation in 1986. After acquiring the center in February 2003, Newport Beach, California-based Steadfast quickly set to work on a major overhaul of the center.

The first phase of the renovation plan involved getting the mall physically attractive to residents and tenants. The center was branded as The Commons at Federal Way in March 2004 (Federal Way was incorporated after the mall was originally developed). The plan launched in June 2003 with interior cosmetic works. A number of new skylights were added, as were two rotunda skylights. The old parquet and carpet floor was removed and replaced with tile. The lighting was upgraded and the center was repainted. The two main entries to the center were redone. The old metal façade and massive wood pillars were replaced with stucco to create a Southwestern look. Along the exterior, stucco replaced wood. In 2006, the company completely refurbished the food court and restrooms.

The second phase of the redevelopment, done concurrently with the first phase over the last few years, was the addition to and reconfiguration of the center’s tenants. When Steadfast purchased the center, it had four anchors, two of which were on life support. The Gottschalk’s and Mervyn’s stores were poor performing. Steadfast owned the Gottschalk’s store, so it demolished it in anticipation of cutting a new anchor deal. Mervyn’s, at the time, was still owned by Target Corporation. Steadfast negotiated a deal whereby Target would relocate from a location across the street and into the center. It replaced the Gottschalk’s with a Century Theatres’ 16-screen location. However, due to Century Theatres’ merger with Cinemark, the opening was delayed until July 2007.

“When Target opened at the center, we saw a huge up tick in traffic at the mall,” says Gary Martindale, general manager of the center. “Target opened with stellar numbers. Their sales are up 50 percent over their previous location across the street. Every year since they’ve opened they have enjoyed double-digit increases in sales.”

Steadfast Companies has redeveloped The Commons at Federal Way inside and out.

The 3,400-seat, 16-screen theater is also enjoying success since opening in July. Since the theater opened, traffic in the center is up 40 percent. Sears and Macy’s, who have always been strong at the center, continue to see success at the center. Another new tenant who has moved to the center is Borders Books.

Rebranding the center has allowed it to become more of a part of the community. The center enjoys a great location, just off Interstate 5, so it is easily accessible by the community and the region.

“It has evolved into a strong community center with a regional influence,” says Martindale. “The focal point is entertainment for the community. The theater is a huge part of that, as is Tilt, a large-scale arcade, and Borders Books. Our food court, as well as our restaurant mix, adds to it as well.”

Borders moved to a 17,000-square-foot store at the center from a nearby 24,000-square-foot store where its sales were suffering. Borders’ sales have been up by double-digit increases since the day it opened, says Martindale. Steadfast has also added a number of restaurants on pad locations at the center, in addition to renovating and retenanting the entire food court. Restaurants include Filling Station, Panera Bread, Red Robin and McGrath’s Fish House. Applebee’s is moving its location from an inline location to a pad site, currently under construction. Steadfast will replace the old Applebee’s with an inline restaurant. A new TGI Friday’s is also under construction on a parcel.

Inline retailers at the center include Champs Sports, American Eagle Outfitters, Daiso, Foot Locker, GNC, Zumiez, Foot Locker, Claire’s, Christopher & Banks, Bath & Body Works and Catherine’s, among others. The company has about 10 new leases in the works to bring new retailers to The Commons at Federal Way.

“When we acquired the mall, there was a huge amount of retail leakage in Federal Way,” says Gary Martindale, general manager of the center. “More than 50 percent of the residents in the market were going outside the city of Federal Way to buy their goods. We wanted to capture a significant amount of that leakage and bring it to The Commons at Federal Way, as well as bring in new regional money to the city.”

The demographics in the area are primarily made up of families with an average household income of $78,000. The area is ethnically mixed — the school district reports that 81 languages are spoken among its students — so The Commons at Federal Way has to be sensitive to a lot of ethnicities. Asian is the predominate ethnicity found in the community, followed by Latino and African-American. The area is primarily made up of established households, though a 4 percent growth rate is predicted for Federal Way for the next several years.

The Commons at Federal Way is now positioning itself as the center of the community. It hosts a number of events for the business community, as well as cultural events throughout the year. Han-Woo-Ri, a Korean festival, is one such event that takes place annually at the center in September. The center also hosts a kids club and mall walker programs for residents. The Commons at Federal Way also has a community center that non-profit corporations and community groups can use free of charge to promote their organizations.

The center also hasn’t forgotten about marketing. An ongoing promotion at the center is called “Project Red Carpet” and aims to take advantage of the entertainment that the center has to offer.

“The program makes our shoppers feel like stars,” says Tiffany Archibald, the center’s marketing director. “A recent event gave shoppers a $10 gift card just for showing up.”

While Steadfast does not release sales results, Archibald says sales continue to grow with each new retailer that the center opens. Martindale expects sales to rise $25 to $30 per square foot by year’s end, based on the results that the theater has brought to the center. If that happens, The Commons at Federal Way will have seen a $120 per square foot sales increase since Steadfast purchased the center.


©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.