Indeed, landing a Bloomingdale's-type high-end department store for the complex is one of two alternative plans that Joe Coradino, who has run PREIT since founder Ron Rubin retired a year ago, floated in Chicago last month when he addressed the National Association of Real Estate Investment Trusts (NAREIT) and said a Gallery upgrade was finally in the works.
PREIT dominates Philly-area malls just as another local REIT, Jerry Sweeney's Brandywine Property Trust, dominates high-end Center City office space.
"We're the dominant landlord in the Philadelphia market," Coradino told the crowd. "We own eight of the 20 malls, 45 percent of the malls [ranked by gross leasable area] in the region. So the retailers looking to expand in the Philadelphia region need to talk to us."
Under Coradino, PREIT has paid down debt and sold new stock, and is sitting on $400 million in relatively low-interest credit available for expansion. He is planning new initiatives at Moorestown, Plymouth Meeting, Exton, "and, of course, the Gallery," he has told NAREIT.
Coradino compared Center City, with its growing affluent residential population, to Manhattan and central Chicago as a potential downtown retail market. The Gallery complex sits atop SEPTA's Market East station, which draws affluent commuters and visitors through the neighborhood, and adjoins the tourist district, growing residential and static office neighborhoods, the Convention Center, and Center City's largest private employer, Thomas Jefferson University.
So what's the plan?
"The possible strategies are really two, that we are moving forward with simultaneously," Coradino said.
"One is a high-fashion anchor center utilizing one of the four high-fashion department stores [Bloomingdale's is one of them]. One or two of those, as a key anchor to be very transformative and more consistent with what you see on Michigan Avenue [Chicago's high-end shopping district].
"Another possible alternative is what we call 'Fast Fashion and Food,' if you will, and that is to redevelop it more consistent with some of the more trendy suburban mall tenants - like the Forever 21, the H&M, the Uniqlo, as well as restaurants and other food choices.
"Both of those potential visions are really driven to attract a customer that exists in downtown Philadelphia right now that's been terribly underserved," Coradino added.
While Kmart's lease at the Gallery runs out next summer, and any new arrangement depends on new leases, "it's our anticipation that, sometime prior to year-end, we will have identified and have enough tenant interest to select a course of action," he concluded.
In short, Coradino promised investors that PREIT will improve the Gallery, whether or not it can land a whale of a tenant like Bloomingdale's.
Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, or @PhillyJoeD on Twitter.