When Atlanta-based Jones Lang LaSalle launched its open-air division in 2007, it was with the knowledge that to properly manage an open-air shopping center, you needed a full understanding of the format. And that’s precisely what the company has gained over the years.
Chain Store Age spoke with Mike Longmore, VP business development and open-air director for Jones Lang LaSalle, about the company’s in-depth involvement in the open-air retail environment and what to expect from the format moving forward.
When Jones Lang LaSalle first unveiled its open-air division, the economy was far different than it is today. How have you modified the objectives of the division based on the downturn?
In March 2007, we had just one property in Atlanta, and now we have 88—and 11 million sq. ft.—in the open-air portfolio. That in and of itself demonstrates a sea change in our open-air business.
Another sea change is the type of client we represent. Prior to the downturn, all of our clients were real estate investors. Today, after the economy dramatically turned for the worst and capital markets dried up, some 30% of our clients are banks, lenders and special servicers.
We have always focused on portfolios of shopping centers in different markets across the country and on delivering consistent leasing and property management. And, today, we also focus on outsourcing, which involves stepping into a management situation in which we hire the center’s existing staff, implement our best practices and still save the company money.
In other cases, a center may have a large in-house staff that can be very costly to support, so we step in to handle the portfolio. For example, we are currently working with RREEF and have taken over property management of 5.7 million sq. ft. of its retail property portfolio that it used to manage for its clients.
What challenges and/or advantages does the open-air format have today?
With 1,400 enclosed malls throughout the country and over 60,000 open-air centers, there is a strong need for third-party open-air management companies. Those that are equipped to leverage local market expertise, but still utilize a national platform, provide a significant third-party operating advantage to open-air centers.
Describe one of the projects within your open-air management portfolio that you are working on.
We are currently rolling out phase one of The Palms at Town & Country’s lifestyle center in Kendall (Miami), Fla. The new 400,000-sq.-ft. lifestyle center is slated to open in March and will feature retailers such as Nordstrom Rack and Loehmann’s.
The Palms at Town & Country began as an open-air power-type center anchored by Marshalls, Men’s Wear-house and Publix, but now with the completion of phase one—in a Mediterranean-themed, pedestrian-friendly format—the center is positioned to be the premier shopping destination in the area.
What do you envision for the open-air format, and for the company’s open-air division in 2010?
We see continued growth in investor clients and outsourcing, and we also see focus on banks and continued business from lenders seeking our help. By the end of 2010, we expect to see a slow increase on the leasing side again. Leasing investment sales will pick up at the end of 2010, not only for real estate business but for retail overall.