Safe Havens

This year’s fastest-growing managers face unprecedented challenges—but also extraordinary opportunity. The credit collapse that has nearly halted development, slowed retail expansion to a crawl and sent shoppers retreating to the safety of their closets has also resulted in a flight to management quality.

The pros are back in charge, helping to stabilize distressed assets and improve already healthy ones. From top-ranked CB Richard Ellis to newcomer The Sembler Co., all are seeing opportunities to grow despite—and because of—the difficulties posed by the current economy. They’re spending more time marketing, creating new divisions and upping their leasing efforts, all in an effort to maximize the value of assets for ownership and improve their own bottom lines.

No. 1: CB Richard Ellis

Los Angeles-based CB Richard Ellis tops the list with 18.7 million sq. ft. newly under management.

“Certainly, the current economic situation provided us with terrific opportunity to pick up leasing, management and disposition contracts,” said Samuel C. Delisi, a senior managing director overseeing the firm’s asset services.

2008 Fastest-Growing Managers Source: Chain Store Age research and company reports
CB Richard EllisLos Angeles, Calif.18,750,661 sq. ft.
Jones Lang LaSalle RetailAtlanta, Ga.13,748,550 sq. ft.
Fameco Management ServicesConshohocken, Pa.6,533,516 sq. ft.
General Growth PropertiesChicago, Ill.2,722,674 sq. ft.
The Sembler Co.St. Petersburg, Fla.2,058,969 sq. ft.

The integration of more traditional property-management services with investment sales and retail services have helped the company perform for a variety of owners: global banks and insurance companies, which require debt or equity restructuring; community or local banks, which are grappling with their construction loan portfolio; lenders dealing with the commercial mortgage-backed securities market; and pension funds, which also have restructuring needs, explained Anthony Buono, executive managing director of retail services for CBRE.

“The biggest sea change is the boxes being repositioned,” Buono observed. “I’m betting many of these properties have box issues. It’s back to basics, with properties being leased by local and national retailers and a regional grocer.”

CB Richard Ellis
Third-Party Retail Management and Leasing Contracts Awarded in 2008 Source: Chain Store Age research and company reports Properties alphabetized by state.
Van Buren PlazaCoachella, Calif.38,000 sq. ft.
Lake Forest VillageLake Forest, Calif.119,741 sq. ft.
Marina Pacifica Shopping CenterLong Beach, Calif.291,969 sq. ft.
Kohl Center WestwoodLos Angeles, Calif.45,140 sq. ft.
Iris PlazaMoreno Valley, Calif.34,138 sq. ft.
Margarita VilleMurrieta, Calif.60,071 sq. ft.
Hamilton MarketplaceNovato, Calif.90,671 sq. ft.
Etco PlazaTemecula, Calif.63,576 sq. ft.
2930 Faber StreetUnion City, Calif.40,760 sq. ft.
Sushi MoonGreenwood Village, Colo.6,000 sq. ft.
Eagleridge Shopping CenterPueblo, Colo.281,981 sq. ft.
CityLine at TenleyWashington, D.C.87,341 sq. ft.
Promenade at Coconut CreekCoconut Creek, Fla.280,000 sq. ft.
Posner Commons RetailDavenport, Fla.163,937 sq. ft.
Northside CentreMiami, Fla.425,000 sq. ft.
Aloma Bend Crossing - Winn DixieOviedo, Fla.50,580 sq. ft.
The Shops Around LenoxAtlanta, Ga.125,995 sq. ft.
Richmond PlazaAugusta, Ga.177,311 sq. ft.
Loganville Crossing - 4743Loganville, Ga.21,000 sq. ft.
Loganville Crossing - 4753Loganville, Ga.78,849 sq. ft.
Loganville Crossing - 4763Loganville, Ga.21,000 sq. ft.
Merchants FestivalMarietta, Ga.57,000 sq. ft.
1340 Southlake ParkwayMorrow, Ga.29,440 sq. ft.
Wisdom PointePeachtree City, Ga.21,885 sq. ft.
Wisdom Pointe - Bldg. BPeachtree City, Ga.15,000 sq. ft.
Waiakea Shopping CenterHilo, Hawaii231,255 sq. ft.
Safeway at Windward Town & Country PlazaKailua, Hawaii53,503 sq. ft.
Shops at Windward Town & Country PlazaKailua, Hawaii33,639 sq. ft.
Lanihau MarketplaceKailua-Kona, Hawaii88,282 sq. ft.
Kona Crossroads Shopping CenterKailua-Kona, Hawaii74,846 sq. ft.
Kona CommonsKailua-Kona, Hawaii130,000 sq. ft.
Windward City Shopping CenterKaneohe, Hawaii210,188 sq. ft.
Kauai Village Shopping CenterKapaa, Hawaii113,499 sq. ft.
Shops at HalekuaiKapolei, Hawaii56,405 sq. ft.
Ace CenterKapolei, Hawaii13,000 sq. ft.
Kahana Gateway Resort Retail CenterLahaina, Hawaii59,588 sq. ft.
Algonquin GalleriaAlgonquin, Ill.83,339 sq. ft.
Algonquin Galleria Commons OEAAlgonquin, Ill.130,948 sq. ft.
Butterfield Plaza IAurora, Ill.236,079 sq. ft.
Butterfield Plaza IIAurora, Ill.176,098 sq. ft.
Former Wickes FurnitureChicago, Ill.48,000 sq. ft.
Brownsburg StationBrownsburg, Ind.217,800 sq. ft.
EchelonIndianapolis, Ind.29,451 sq. ft.
INTECH Retail OneIndianapolis, Ind.19,040 sq. ft.
Lafayette Pavilions I & IILafayette, Ind.404,000 sq. ft.
MetropolisPlainfield, Ind.476,984 sq. ft.
Plainfield CrossingPlainfield, Ind.91,038 sq. ft.
Plainfield Lot 1Plainfield, Ind.14,026 sq. ft.
Sycamore Terrace I & IITerre Haute, Ind.285,000 sq. ft.
Porter Vale Phase - Phase IValparaiso, Ind.733,107 sq. ft.
119th Street PlazaOlathe, Kan.47,379 sq. ft.
Kentlands Square Shopping CenterGaithersburg, Md.240,683 sq. ft.
Cranberry Square Shopping CenterWestminster, Md.140,273 sq. ft.
Hartford Corners Shopping CenterDelran, N.J.255,069 sq. ft.
TOPS PlazaEdison, N.J.100,000 sq. ft.
17th Century AssociatesParamus, N.J.38,215 sq. ft.
Sea Girt CenterSea Girt, N.J.54,968 sq. ft.
Spring Mountain CenterLas Vegas, Nev.143,382 sq. ft.
Shanalee PlazaLas Vegas, Nev.90,961 sq. ft.
Southwest MarketplaceLas Vegas, Nev.184,285 sq. ft.
American HondaAkron, Ohio30,000 sq. ft.
Value CityAlliance, Ohio100,000 sq. ft.
Tower Place MallCincinnati, Ohio71,038 sq. ft.
Bridgewater FallsHamilton, Ohio650,000 sq. ft.
Wadsworth FordWadsworth, Ohio19,740 sq. ft.
18525 Warrensville HeightsWarrensville Heights, Ohio110,390 sq. ft.
Collier Town CenterCollier Township, Pa.68,406 sq. ft.
Ladera Bend - RetailAustin, Texas35,000 sq. ft.
Crestview StationAustin, Texas66,000 sq. ft.
Bryan Towne CenterBryan, Texas395,400 sq. ft.
Midway MillsCarrollton, Texas73,939 sq. ft.
Bennigan’s Grill & TavernMesquite, Texas9,000 sq. ft.
Redwood PlazaSalt Lake City, Utah104,211 sq. ft.
Subtotal: U.S.A. 9,559,628 sq. ft.
Total: U.S.A. Partners 2,101,158 sq. ft.
Total: Canada 83,628 sq. ft.
Total: Europe 539,739 sq. ft.
Total: India 1,340,000 sq. ft.
Total: China 1,713,231 sq. ft.
Total: Australia 3,413,277 sq. ft.
Total for 2008 18,750,661 sq. ft.

And, in fact, the current industry difficulties offer another benefit for a firm as large as CBRE, Delisi said.

“This is going to give us the opportunity to recruit some of the best leasing people in the business,” Delisi said. “When you have great partners on the leasing side, it helps you on the management side. People look at us as a safe haven.”

No. 2: Jones Lang LaSalle Retail

Second-ranked Jones Lang LaSalle (13.7 million sq. ft.) began marketing its distressed property receivership services early, to great success.

Receiverships and foreclosures increased in third- and fourth-quarter 2008, leaving the new owners unhappily in charge of real estate they never expected to manage. Other lenders want the original owners to work out financial problems if at all possible, with JLL providing the needed management and leasing duties.

“You need to go in, solidify and stabilize the asset,” said Greg Maloney, president and CEO of Atlanta-based Jones Lang LaSalle Retail. “We put together a budget, try to stabilize a merchandise mix and grow the revenue where we can.”

This year, he added, should see an increase in its open-air management portfolio (now 5.2 million sq. ft.), as those owners also seek experienced hands to keep projects leased or improve them for sale.

“This is a great opportunity for people to go out there and make money,” Maloney said.

Jones Lang LaSalle Retail
Third-Party Retail Management and Leasing Contracts Awarded in 2008 Source: Chain Store Age research and company reports Properties alphabetized by state.
Casselberry CollectionCasselberry, Fla.89,186 sq. ft.
Shoppes of KissimmeeKissimmee, Fla.74,230 sq. ft.
Tallahassee MallTallahassee, Fla.965,000 sq. ft.
100 PeachtreeAtlanta, Ga.12,000 sq. ft.
Lindbergh City CenterAtlanta, Ga.33,000 sq. ft.
Paradise Shoppes of Hammond CrossingCumming, Ga.27,000 sq. ft.
Barrett Market CenterKennesaw, Ga.17,266 sq. ft.
Progressive Light BuildingKennesaw, Ga.20,000 sq. ft.
Macon MallMacon, Ga.1,442,000 sq. ft.
Paradise Shoppes of MonroeMonroe, Ga.23,500 sq. ft.
Paradise Shoppes of PerryPerry, Ga.72,200 sq. ft.
Mount Berry Square MallRome, Ga.478,000 sq. ft.
35 W. WackerChicago, Ill.800 sq. ft.
Richmond SquareRichmond, Ind.420,000 sq. ft.
Boscov’s at White Marsh MallBaltimore, Md.220,000 sq. ft.
Boscov’s at Marley StationGlen Burnie, Md.274,000 sq. ft.
Boscov’s at Owings MillsOwings Mills, Md.293,000 sq. ft.
Northland CenterSouthfield, Mich.1,800,000 sq. ft.
Crestwood MallCrestwood, Mo.1,100,000 sq. ft.
Burlington Square MallBurlington, N.C.412,000 sq. ft.
Ballantyne VillageCharlotte, N.C.140,000 sq. ft.
Christenbury Corners (ground-up)Charlotte, N.C.348,100 sq. ft.
Colonie CenterAlbany, N.Y.1,338,000 sq. ft.
Boscov’s at South Hills VillageBethel Park, Pa.264,900 sq. ft.
Boscov’s at Oxford ValleyLanghorne, Pa.181,000 sq. ft.
Boscov’s at MonroevilleMonroeville, Pa.263,700 sq. ft.
Boscov’s at Montgomery MallNorth Wales, Pa.182,500 sq. ft.
Paradise CityMyrtle Beach, S.C.350,000 sq. ft.
Bradley Square MallCleveland, Tenn.385,000 sq. ft.
The Shops of Saddle CreekGermantown, Tenn.142,000 sq. ft.
Hickory RidgeMemphis, Tenn.855,000 sq. ft.
West Oaks MallHouston, Texas1,100,000 sq. ft.
LaCenterra at Cinco RanchKaty, Texas425,168 sq. ft.
Total for 2008 13,748,550 sq. ft.

No. 3: Fameco Management Services

Plymouth Meeting, Pa.-based Fameco, which ranked third with 6.5 million sq. ft., has based its growth on a twofold strategy: strong leasing and management, said Larry Zipf, president, Fameco Management Services.

“The leasing piece is driven by our retail relationships,” Zipf said.

Fameco Management Services
Third-Party Retail Management and Leasing Contracts Awarded in 2008 Source: Chain Store Age research and company reports Properties alphabetized by state.
Acme Sublease (Absecon)Absecon, N.J.44,824 sq. ft.
Acme Sublease (Bordentown)Bordentown, N.J.38,550 sq. ft.
Habitat at BrickBrick, N.J.27,000 sq. ft.
Former Bob Evans RestaurantBurlington, N.J.5,902 sq. ft.
Former Bob Evans RestaurantCherry Hill, N.J.5,806 sq. ft.
Former Toys “R” UsEast Brunswick, N.J.218,000 sq. ft.
Summerhill MarketplaceEast Brunswick, N.J.83,856 sq. ft.
Elizabeth Ave. Redevelopment SiteElizabeth, N.J.30,076 sq. ft.
Stop & Shop EmersonEmerson, N.J.109,000 sq. ft.
Franklin Lakes Shopping CenterFranklin Lakes, N.J.6,000 sq. ft.
Mansfield PlazaHackettstown, N.J.156,000 sq. ft.
Former Bob Evans RestaurantHamilton, N.J.5,050 sq. ft.
Hamilton Commons - Route 130 & Kuser RoadHamilton, N.J.305,000 sq. ft.
Hazlet PlazaHazlet, N.J.100,000 sq. ft.
Tweeter-NY Golf Retail CenterLawrenceville, N.J.8,000 sq. ft.
Linden Shopping CenterLinden, N.J.50,000 sq. ft.
Clover SquareMercerville, N.J.179,195 sq. ft.
The Renaissance BuildingMerchantville, N.J.7,820 sq. ft.
MiddletownMiddletown, N.J.4,500 sq. ft.
574-584 Ridge RoadNorth Arlington, N.J.15,500 sq. ft.
Scotch Plains - Terrill Road New Retail DevelopmentScotch Plains, N.J.4,800 sq. ft.
Mill Creek CenterSecaucus, N.J.50,000 sq. ft.
WestfieldWestfield, N.J.3,000 sq. ft.
Stony PointStony Point, N.Y.50,000 sq. ft.
1020 Old York Road (Former Mellon Bank)Abington, Pa.5,304 sq. ft.
The Shoppes at CrossroadsBartonsville, Pa.140,000 sq. ft.
3325 Street RoadBensalem, Pa.41,000 sq. ft.
Pizza Hut/Duron Paints CenterBensalem, Pa.4,400 sq. ft.
Clifton Heights 200-226 W. Baltimore PikeClifton Heights, Pa.21,519 sq. ft.
Plymouth Square Shopping CenterConshohocken, Pa.206,369 sq. ft.
Stop and Shop - SwedesfordDevon, Pa.100,000 sq. ft.
Commerce PlazaDickson City, Pa.39,870 sq. ft.
LA FitnessEaston, Pa.38,000 sq. ft.
Tinicum Former Bank BranchEssington, Pa.15,625 sq. ft.
131 Lincoln HighwayFairless Hills, Pa.11,880 sq. ft.
Hatboro 212 S. York RoadHatboro, Pa.8,700 sq. ft.
Hatfield CrossingHatfield, Pa.11,000 sq. ft.
Route 6 Plaza Pad SiteHonesdale, Pa.125,000 sq. ft.
Acme SubleaseKennett Square, Pa.48,947 sq. ft.
Penske KOPKing of Prussia, Pa.20,000 sq. ft.
Five Points Plaza (Condo Unit #8)Lansdale, Pa.2,000 sq. ft.
Towamencin Shopping VillageLansdale, Pa.132,916 sq. ft.
Lebanon Valley MallLebanon, Pa.402,440 sq. ft.
Nazareth CrossingNazareth, Pa.30,000 sq. ft.
Marketplace at OaksOaks, Pa.500,000 sq. ft.
23rd Street Retail DevelopmentPhiladelphia, Pa.28,000 sq. ft.
4319 Main Street - ManayunkPhiladelphia, Pa.3,000 sq. ft.
Blue Grass PlazaPhiladelphia, Pa.87,300 sq. ft.
Former Molasses CreekPhiladelphia, Pa.1,400 sq. ft.
Northeast Lincoln MercuryPhiladelphia, Pa.24,000 sq. ft.
Pennrose ParkPhiladelphia, Pa.45,000 sq. ft.
Red Lion Road (Abrams)Philadelphia, Pa.35,000 sq. ft.
124 Main Street (Former Sovereign Bank)Phoenixville, Pa.5,040 sq. ft.
RestaurantPlymouth Meeting, Pa.10,000 sq. ft.
Kenhorst PlazaReading, Pa.161,424 sq. ft.
Reading MallReading, Pa.59,829 sq. ft.
The Mall at SteamtownScranton, Pa.563,774 sq. ft.
11 Bishop AvenueSecane, Pa.2,400 sq. ft.
820 Bethlehem PikeSpring House, Pa.112,211 sq. ft.
Cutler PlazaSpringfield, Pa.30,000 sq. ft.
Marple CrossroadsSpringfield, Pa.450,000 sq. ft.
Springfield Square CentralSpringfield, Pa.45,397 sq. ft.
Springfield Square NorthSpringfield, Pa.95,114 sq. ft.
Springfield Square SouthSpringfield, Pa.75,486 sq. ft.
Shops at 69th StreetUpper Darby, Pa.800,000 sq. ft.
Hollywood Video Pad in Center Point PlaceWarminster, Pa.6,000 sq. ft.
Warrington PlazaWarminster, Pa.87,226 sq. ft.
4703 Hamilton Blvd.Wescosville, Pa.3,318 sq. ft.
Triangle PlazaWilkes Barre, Pa.48,200 sq. ft.
Verdae VillageGreenville, Pa.241,548 sq. ft.
Denton Towne CrossingDenton, Texas100,000 sq. ft.
Total for 2008 6,533,516 sq. ft.

And that will be useful, as the opportunity continues to grow as the store stock shrinks, even in the relatively insulated greater Philadelphia and mid-Atlantic areas.

“You have a ton of big-box availability,” said Brandon Famous, CEO, Fameco Real Estate. “There are certainly more leasing assignments ahead.”

Management opportunities also abound, as beleaguered owners look to outsource those duties due to the company’s experience and expertise, as well as its ability to reduce costs by pooling contracts for supplies and labor.

“Sometimes a regional landlord gets a little nervous when he has more vacancy than he expected,” Famous noted. “And then there’s Fameco.”

No. 4: General Growth Properties

General Growth Properties’ management division has continued to grow despite its financial difficulties, adding 2.7 million sq. ft. to place fourth. Its most recent contract, announced in mid-November, awarded it management, leasing and marketing responsibility for Western Development Corp.’s Towson Commons in Towson, Md. The center is located near Chicago-based GGP’s Towson Town Center.

General Growth Properties
Third-Party Retail Management and Leasing Contracts Awarded in 2008 Source: Chain Store Age research and company reports Properties alphabetized by state.
University MallTampa, Fla.1,237,576 sq. ft.
Kapolei CommonsKapolei, Hawaii610,000 sq. ft.
Kings’ ShopsWaikoloa, Hawaii93,517 sq. ft.
Towson CommonsTowson, Md.330,549 sq. ft.
Branson LandingBranson, Mo.451,032 sq. ft.
Total for 2008 2,722,674 sq. ft.

“General Growth has the experience and expertise to oversee the operations of a unique, mixed-used property like Towson Commons,” said Ben Miller, president, Western Development Corp., in the press release announcing the appointment. “Since 2007, GGP has successfully managed The Shops at Georgetown Park for us, and we are pleased to bring them on board for this additional project.”

Other properties brought into the management portfolio are University Mall in Tampa, Fla.; Branson (Mo.) Landing; Kapolei (Hawaii) Commons; and Kings’ Shops in Waikoloa, Hawaii.

No. 5: The Sembler Co.

Another method of increasing business is to retain management of a property that’s been sold, as Sembler Co. can attest. The St. Petersburg, Fla.-based company placed fifth this year with 2.0 million sq. ft. of new third-party contracts.

In October, Sembler announced it had sold its 1 million-plus sq.-ft. Winter Garden (Fla.) Village to Cole Real Estate Investments for $180 million. Cole, which placed first in the fastest-growing acquirers’ category for 2008, then retained Sembler to manage the property.

The Sembler Co.
Third-Party Retail Management and Leasing Contracts Awarded in 2008 Source: Chain Store Age research and company reports Properties alphabetized by state.
Coral WalkCape Coral, Fla.102,612 sq. ft.
Promenade at Naples CentreNaples, Fla.159,966 sq. ft.
Alderman PlazaPalm Harbor, Fla.95,937 sq. ft.
Winter Garden VillageWinter Garden, Fla.1,149,924 sq. ft.
Cumming Town CenterCumming, Ga.310,192 sq. ft.
Las PiedrasLas Piedras, Puerto Rico119,728 sq. ft.
Plaza San FranciscoSan Juan, Puerto Rico120,610 sq. ft.
Total for 2008 2,058,969 sq. ft.

“We have picked up third-party from other owners” as well, said Greg Sembler, CEO. “We were pretty fortunate last year. We developed a lot of property in Florida. But things are difficult right now, hence our focus on third-party management.”

The company recently brought Stevens Tombrink on to fill the newly created post of VP business development to expand the firm’s third-party portfolio. The opportunity should continue to grow, even as the economy stabilizes and development begins to pick up, Sembler said.

“There’s $1.5 trillion of commercial real estate development” extant, Sembler noted, much held in CMBS pools that will have to be refinanced sooner rather than later. Those new owners may need third-party managers.

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