Evolution from Pure Play Outlet Center to Open-Air Value Center

Since 2021, Outlets at The Dells has experienced significant leasing momentum, most notably with non-outlet concepts such as TJ Maxx, Five Below, and Ulta Beauty. The evolution of the Outlets at The Dells going from a pure play outlet center to an open-air and value-oriented shopping center, can be attributed to a lack of alternative shopping centers in the market and surrounding towns, the desire for these retailers to have a presence in one of the top tourist destinations in Wisconsin, and the strong performance of the outlet center.

• 10-Year Leases with TJ Maxx, Five Below, and Ulta Beauty.

• National tenants comprise of 88% of occupied square footage and 95% of in-place revenue.

• In-line sales are strong and tenants have a healthy occupancy cost.

• No other competing outlet center is within 80 miles There is only one other large format shopping center and retail node within 50 miles.

Lack of Competition

There is a significant lack of competitive retail in the Wisconsin Dells and surrounding towns, in particular large-format shopping centers with national retail concepts. The retail serving the nearby towns of Reedsburg, Portage, and Baraboo, are neighborhood centers with a local tenant mix and a local grocery concept. Wisconsin Dells, Portage, and Baraboo are home to Walmart Supercenters. Outlets at The Dells benefits from the minimal competition in the market, as evident by its expansive trade area, drawing shoppers from over 30 miles in every direction.

There are four outlet centers in the state of Wisconsin with the closest one in Johnson Creek, approximately 80 miles away. The next closest is in Oshkosh but it’s currently in receivership with struggling tenants on short term leases. The nearest regional mall is West Towne Mall just outside of Madison, over 50 miles south of the Subject Property.

Strategically Located in Wisconsin Dells, a Top Tourist Destination in Wisconsin

Nicknamed the “Waterpark Capital of the World,” Wisconsin Dells is one of the top tourist destinations in the state of Wisconsin with large resorts that boast incredible indoor water parks and amusement parks and numerous outdoor activities for visitors to partake in. The tourism in the Wisconsin Dells creates a significant economic impact for the state and local municipalities. In 2021, the direct and indirect economic impact was north of $1.7 billion with summer time accounting for 42% of this spending followed by spring, winter, and fall. The Wisconsin Dells tourist industry generates approximately 15,000 jobs and contributes almost $100 million to state and local taxes.

Expansive Trade Area

The trade area is expansive stretching over 30 miles in every direction with a population of over 180,690 people. Since 2010, the area has seen strong population growth due to the low cost of living and high quality of life featuring amenities such as the Wisconsin Dells and several large lakes and the Wisconsin River. As a result of the many recreational activities and tourist attractions, there is a large daytime population of 169,000 people. The average household incomes in the trade area are in excess of $89,000 and is projected to grow 15% over the next five years to $103,171. The cost of living in Wisconsin is 1% lower than the national average and housing costs are 10% lower than the national average giving these residents greater purchasing power abilities.

Strong Tenant Performance

The Outlets at The Dells boasts a high-performing tenant mix. 18 tenants have sub-10% occupancy costs, representing 56% of occupied square footage (exclusive of tenants that don’t report sales and temporary tenants), providing stability in the income stream, increasing the probability of renewals, and enabling future investors to drive higher rents.

Future Development and Value-Add Opportunities

A future investor will be presented with a tremendous opportunity to develop three outlots along interstate-90, lease up the vacant space at market rents, and mark-to-market tenant rents on tenants with expiring leases.

• Vacant space lease up: A future investor could lease up the 11,117 square feet of vacant space at market rents and potentially increase NOI by approximately $390,000.

• Mark-to-Market: Most tenants do not have contractual options. The low occupancy cost for tenants will allow a future investor to renew existing tenants at higher market rents and drive NOI growth, as evidenced by the solid 4.16% CAGR.

• Three outlots along Interstate 90: one at the SEC of the site and two on the SWC. The lot on the SEC is approximately .95 acres or 41,464 square feet; the one across from Nike is approximately .84 acres or 36,611 square feet; and the last one is approximately 2.16 acres or 94,060 square feet. *Pad sizes are approximate. Buyer must have its civil engineer measure.

Regional Access

Outlets at The Dells is strategically located along Interstate-90, giving the Subject Property robust regional access to greater Wisconsin. Over 54,000 vehicles pass by daily (source: Wisconsin Department of Transportation). In addition, Outlets at The Dells is situated on the main corridor (Iron Brigade Memorial Highway) that goes through the heart of the Wisconsin Dells and home to the five large resorts and theme parks and wraps around Lake Delton.

Low Taxes

This market is highly sought after due to its favorable tax environment and low operating costs. Outlets at The Dells has a $2.08 PSF tax bill and total expenses are $11.20 PSF, providing a future owner the ability to push rental rates in the future.