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Safe Havens

Jones Lang LaSalle finished in second place with 13.7 million sq. ft. of new management and leasing contracts in 2008, including The Shops of Saddle Creek, in Germantown, Tenn.

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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 Ellis Los Angeles, Calif. 18,750,661 sq. ft.
Jones Lang LaSalle Retail Atlanta, Ga. 13,748,550 sq. ft.
Fameco Management Services Conshohocken, Pa. 6,533,516 sq. ft.
General Growth Properties Chicago, 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 Plaza Coachella, Calif. 38,000 sq. ft.
Lake Forest Village Lake Forest, Calif. 119,741 sq. ft.
Marina Pacifica Shopping Center Long Beach, Calif. 291,969 sq. ft.
Kohl Center Westwood Los Angeles, Calif. 45,140 sq. ft.
Iris Plaza Moreno Valley, Calif. 34,138 sq. ft.
Margarita Ville Murrieta, Calif. 60,071 sq. ft.
Hamilton Marketplace Novato, Calif. 90,671 sq. ft.
Etco Plaza Temecula, Calif. 63,576 sq. ft.
2930 Faber Street Union City, Calif. 40,760 sq. ft.
Sushi Moon Greenwood Village, Colo. 6,000 sq. ft.
Eagleridge Shopping Center Pueblo, Colo. 281,981 sq. ft.
CityLine at Tenley Washington, D.C. 87,341 sq. ft.
Promenade at Coconut Creek Coconut Creek, Fla. 280,000 sq. ft.
Posner Commons Retail Davenport, Fla. 163,937 sq. ft.
Northside Centre Miami, Fla. 425,000 sq. ft.
Aloma Bend Crossing - Winn Dixie Oviedo, Fla. 50,580 sq. ft.
The Shops Around Lenox Atlanta, Ga. 125,995 sq. ft.
Richmond Plaza Augusta, Ga. 177,311 sq. ft.
Loganville Crossing - 4743 Loganville, Ga. 21,000 sq. ft.
Loganville Crossing - 4753 Loganville, Ga. 78,849 sq. ft.
Loganville Crossing - 4763 Loganville, Ga. 21,000 sq. ft.
Merchants Festival Marietta, Ga. 57,000 sq. ft.
1340 Southlake Parkway Morrow, Ga. 29,440 sq. ft.
Wisdom Pointe Peachtree City, Ga. 21,885 sq. ft.
Wisdom Pointe - Bldg. B Peachtree City, Ga. 15,000 sq. ft.
Waiakea Shopping Center Hilo, Hawaii 231,255 sq. ft.
Safeway at Windward Town & Country Plaza Kailua, Hawaii 53,503 sq. ft.
Shops at Windward Town & Country Plaza Kailua, Hawaii 33,639 sq. ft.
Lanihau Marketplace Kailua-Kona, Hawaii 88,282 sq. ft.
Kona Crossroads Shopping Center Kailua-Kona, Hawaii 74,846 sq. ft.
Kona Commons Kailua-Kona, Hawaii 130,000 sq. ft.
Windward City Shopping Center Kaneohe, Hawaii 210,188 sq. ft.
Kauai Village Shopping Center Kapaa, Hawaii 113,499 sq. ft.
Shops at Halekuai Kapolei, Hawaii 56,405 sq. ft.
Ace Center Kapolei, Hawaii 13,000 sq. ft.
Kahana Gateway Resort Retail Center Lahaina, Hawaii 59,588 sq. ft.
Algonquin Galleria Algonquin, Ill. 83,339 sq. ft.
Algonquin Galleria Commons OEA Algonquin, Ill. 130,948 sq. ft.
Butterfield Plaza I Aurora, Ill. 236,079 sq. ft.
Butterfield Plaza II Aurora, Ill. 176,098 sq. ft.
Former Wickes Furniture Chicago, Ill. 48,000 sq. ft.
Brownsburg Station Brownsburg, Ind. 217,800 sq. ft.
Echelon Indianapolis, Ind. 29,451 sq. ft.
INTECH Retail One Indianapolis, Ind. 19,040 sq. ft.
Lafayette Pavilions I & II Lafayette, Ind. 404,000 sq. ft.
Metropolis Plainfield, Ind. 476,984 sq. ft.
Plainfield Crossing Plainfield, Ind. 91,038 sq. ft.
Plainfield Lot 1 Plainfield, Ind. 14,026 sq. ft.
Sycamore Terrace I & II Terre Haute, Ind. 285,000 sq. ft.
Porter Vale Phase - Phase I Valparaiso, Ind. 733,107 sq. ft.
119th Street Plaza Olathe, Kan. 47,379 sq. ft.
Kentlands Square Shopping Center Gaithersburg, Md. 240,683 sq. ft.
Cranberry Square Shopping Center Westminster, Md. 140,273 sq. ft.
Hartford Corners Shopping Center Delran, N.J. 255,069 sq. ft.
TOPS Plaza Edison, N.J. 100,000 sq. ft.
17th Century Associates Paramus, N.J. 38,215 sq. ft.
Sea Girt Center Sea Girt, N.J. 54,968 sq. ft.
Spring Mountain Center Las Vegas, Nev. 143,382 sq. ft.
Shanalee Plaza Las Vegas, Nev. 90,961 sq. ft.
Southwest Marketplace Las Vegas, Nev. 184,285 sq. ft.
American Honda Akron, Ohio 30,000 sq. ft.
Value City Alliance, Ohio 100,000 sq. ft.
Tower Place Mall Cincinnati, Ohio 71,038 sq. ft.
Bridgewater Falls Hamilton, Ohio 650,000 sq. ft.
Wadsworth Ford Wadsworth, Ohio 19,740 sq. ft.
18525 Warrensville Heights Warrensville Heights, Ohio 110,390 sq. ft.
Collier Town Center Collier Township, Pa. 68,406 sq. ft.
Ladera Bend - Retail Austin, Texas 35,000 sq. ft.
Crestview Station Austin, Texas 66,000 sq. ft.
Bryan Towne Center Bryan, Texas 395,400 sq. ft.
Midway Mills Carrollton, Texas 73,939 sq. ft.
Bennigan’s Grill & Tavern Mesquite, Texas 9,000 sq. ft.
Redwood Plaza Salt Lake City, Utah 104,211 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 Collection Casselberry, Fla. 89,186 sq. ft.
Shoppes of Kissimmee Kissimmee, Fla. 74,230 sq. ft.
Tallahassee Mall Tallahassee, Fla. 965,000 sq. ft.
100 Peachtree Atlanta, Ga. 12,000 sq. ft.
Lindbergh City Center Atlanta, Ga. 33,000 sq. ft.
Paradise Shoppes of Hammond Crossing Cumming, Ga. 27,000 sq. ft.
Barrett Market Center Kennesaw, Ga. 17,266 sq. ft.
Progressive Light Building Kennesaw, Ga. 20,000 sq. ft.
Macon Mall Macon, Ga. 1,442,000 sq. ft.
Paradise Shoppes of Monroe Monroe, Ga. 23,500 sq. ft.
Paradise Shoppes of Perry Perry, Ga. 72,200 sq. ft.
Mount Berry Square Mall Rome, Ga. 478,000 sq. ft.
35 W. Wacker Chicago, Ill. 800 sq. ft.
Richmond Square Richmond, Ind. 420,000 sq. ft.
Boscov’s at White Marsh Mall Baltimore, Md. 220,000 sq. ft.
Boscov’s at Marley Station Glen Burnie, Md. 274,000 sq. ft.
Boscov’s at Owings Mills Owings Mills, Md. 293,000 sq. ft.
Northland Center Southfield, Mich. 1,800,000 sq. ft.
Crestwood Mall Crestwood, Mo. 1,100,000 sq. ft.
Burlington Square Mall Burlington, N.C. 412,000 sq. ft.
Ballantyne Village Charlotte, N.C. 140,000 sq. ft.
Christenbury Corners (ground-up) Charlotte, N.C. 348,100 sq. ft.
Colonie Center Albany, N.Y. 1,338,000 sq. ft.
Boscov’s at South Hills Village Bethel Park, Pa. 264,900 sq. ft.
Boscov’s at Oxford Valley Langhorne, Pa. 181,000 sq. ft.
Boscov’s at Monroeville Monroeville, Pa. 263,700 sq. ft.
Boscov’s at Montgomery Mall North Wales, Pa. 182,500 sq. ft.
Paradise City Myrtle Beach, S.C. 350,000 sq. ft.
Bradley Square Mall Cleveland, Tenn. 385,000 sq. ft.
The Shops of Saddle Creek Germantown, Tenn. 142,000 sq. ft.
Hickory Ridge Memphis, Tenn. 855,000 sq. ft.
West Oaks Mall Houston, Texas 1,100,000 sq. ft.
LaCenterra at Cinco Ranch Katy, Texas 425,168 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 Brick Brick, N.J. 27,000 sq. ft.
Former Bob Evans Restaurant Burlington, N.J. 5,902 sq. ft.
Former Bob Evans Restaurant Cherry Hill, N.J. 5,806 sq. ft.
Former Toys “R” Us East Brunswick, N.J. 218,000 sq. ft.
Summerhill Marketplace East Brunswick, N.J. 83,856 sq. ft.
Elizabeth Ave. Redevelopment Site Elizabeth, N.J. 30,076 sq. ft.
Stop & Shop Emerson Emerson, N.J. 109,000 sq. ft.
Franklin Lakes Shopping Center Franklin Lakes, N.J. 6,000 sq. ft.
Mansfield Plaza Hackettstown, N.J. 156,000 sq. ft.
Former Bob Evans Restaurant Hamilton, N.J. 5,050 sq. ft.
Hamilton Commons - Route 130 & Kuser Road Hamilton, N.J. 305,000 sq. ft.
Hazlet Plaza Hazlet, N.J. 100,000 sq. ft.
Tweeter-NY Golf Retail Center Lawrenceville, N.J. 8,000 sq. ft.
Linden Shopping Center Linden, N.J. 50,000 sq. ft.
Clover Square Mercerville, N.J. 179,195 sq. ft.
The Renaissance Building Merchantville, N.J. 7,820 sq. ft.
Middletown Middletown, N.J. 4,500 sq. ft.
574-584 Ridge Road North Arlington, N.J. 15,500 sq. ft.
Scotch Plains - Terrill Road New Retail Development Scotch Plains, N.J. 4,800 sq. ft.
Mill Creek Center Secaucus, N.J. 50,000 sq. ft.
Westfield Westfield, N.J. 3,000 sq. ft.
Stony Point Stony Point, N.Y. 50,000 sq. ft.
1020 Old York Road (Former Mellon Bank) Abington, Pa. 5,304 sq. ft.
The Shoppes at Crossroads Bartonsville, Pa. 140,000 sq. ft.
3325 Street Road Bensalem, Pa. 41,000 sq. ft.
Pizza Hut/Duron Paints Center Bensalem, Pa. 4,400 sq. ft.
Clifton Heights 200-226 W. Baltimore Pike Clifton Heights, Pa. 21,519 sq. ft.
Plymouth Square Shopping Center Conshohocken, Pa. 206,369 sq. ft.
Stop and Shop - Swedesford Devon, Pa. 100,000 sq. ft.
Commerce Plaza Dickson City, Pa. 39,870 sq. ft.
LA Fitness Easton, Pa. 38,000 sq. ft.
Tinicum Former Bank Branch Essington, Pa. 15,625 sq. ft.
131 Lincoln Highway Fairless Hills, Pa. 11,880 sq. ft.
Hatboro 212 S. York Road Hatboro, Pa. 8,700 sq. ft.
Hatfield Crossing Hatfield, Pa. 11,000 sq. ft.
Route 6 Plaza Pad Site Honesdale, Pa. 125,000 sq. ft.
Acme Sublease Kennett Square, Pa. 48,947 sq. ft.
Penske KOP King of Prussia, Pa. 20,000 sq. ft.
Five Points Plaza (Condo Unit #8) Lansdale, Pa. 2,000 sq. ft.
Towamencin Shopping Village Lansdale, Pa. 132,916 sq. ft.
Lebanon Valley Mall Lebanon, Pa. 402,440 sq. ft.
Nazareth Crossing Nazareth, Pa. 30,000 sq. ft.
Marketplace at Oaks Oaks, Pa. 500,000 sq. ft.
23rd Street Retail Development Philadelphia, Pa. 28,000 sq. ft.
4319 Main Street - Manayunk Philadelphia, Pa. 3,000 sq. ft.
Blue Grass Plaza Philadelphia, Pa. 87,300 sq. ft.
Former Molasses Creek Philadelphia, Pa. 1,400 sq. ft.
Northeast Lincoln Mercury Philadelphia, Pa. 24,000 sq. ft.
Pennrose Park Philadelphia, 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.
Restaurant Plymouth Meeting, Pa. 10,000 sq. ft.
Kenhorst Plaza Reading, Pa. 161,424 sq. ft.
Reading Mall Reading, Pa. 59,829 sq. ft.
The Mall at Steamtown Scranton, Pa. 563,774 sq. ft.
11 Bishop Avenue Secane, Pa. 2,400 sq. ft.
820 Bethlehem Pike Spring House, Pa. 112,211 sq. ft.
Cutler Plaza Springfield, Pa. 30,000 sq. ft.
Marple Crossroads Springfield, Pa. 450,000 sq. ft.
Springfield Square Central Springfield, Pa. 45,397 sq. ft.
Springfield Square North Springfield, Pa. 95,114 sq. ft.
Springfield Square South Springfield, Pa. 75,486 sq. ft.
Shops at 69th Street Upper Darby, Pa. 800,000 sq. ft.
Hollywood Video Pad in Center Point Place Warminster, Pa. 6,000 sq. ft.
Warrington Plaza Warminster, Pa. 87,226 sq. ft.
4703 Hamilton Blvd. Wescosville, Pa. 3,318 sq. ft.
Triangle Plaza Wilkes Barre, Pa. 48,200 sq. ft.
Verdae Village Greenville, Pa. 241,548 sq. ft.
Denton Towne Crossing Denton, Texas 100,000 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 Mall Tampa, Fla. 1,237,576 sq. ft.
Kapolei Commons Kapolei, Hawaii 610,000 sq. ft.
Kings’ Shops Waikoloa, Hawaii 93,517 sq. ft.
Towson Commons Towson, Md. 330,549 sq. ft.
Branson Landing Branson, 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 Walk Cape Coral, Fla. 102,612 sq. ft.
Promenade at Naples Centre Naples, Fla. 159,966 sq. ft.
Alderman Plaza Palm Harbor, Fla. 95,937 sq. ft.
Winter Garden Village Winter Garden, Fla. 1,149,924 sq. ft.
Cumming Town Center Cumming, Ga. 310,192 sq. ft.
Las Piedras Las Piedras, Puerto Rico 119,728 sq. ft.
Plaza San Francisco San Juan, Puerto Rico 120,610 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.