Highlights of Real Estate’s Big Show
Expansion was the talk of the aisles in the Las Vegas convention center, as the International Council of Shopping Centers hosted its annual RECon global real estate convention May 19-22.
"We never really had a downturn," said Stephen Gallant, VP facilities development with Jos. A. Bank Clothiers, in the Women’s Special Interest Group presentation "Retail: The Next Wave."
"We opened an average of 50 stores a year during the recession, and are continuing to gather strength in the more recent months and years," he noted.
The panel was moderated by Faith Hope Consolo, Retail Group chairman for Douglas Elliman Real Estate; other panelists included Chain Store Age editor-in-chief Marianne Wilson, BaubleBar co-founder Daniella Yacobovsky, Ann Inc. senior VP real estate George Sappenfield, and RetailWire Braintrust editorial board member James Tenser.
Despite the quickening pace of store expansion, the leasing process itself is increasingly more complicated. "Deal-making now involves more approvals, with financial people involved on the landlord side," said Ann Inc.’s Sappenfield during the SIG discussion. "Securing new sites is no longer a handshake deal; it has become more bureaucratic."
Closer scrutiny, though, can make for a better deal for all parties involved, the panel agreed. And for those chains in expansion mode, the site choices are prolific — whether in new ground-up projects or sweeping redevelopments.
On these pages are several projects featured at RECon 2013, each representing some of the premium spaces coming to market this year and beyond.
THE MALL AT BAY PLAZA
Location: Bronx, N.Y. (200 Baychester Ave., at the crossroads of I-95 and Hutchinson River Parkway)
Size: 780,000 sq. ft.
Developer: Prestige Properties & Development Co.
Anchor Tenants: Macy’s, J.C. Penney
Leasing Contact: Jerry Welkis, Welco Realty (914) 576-7500, [email protected]
Status: Slated for a spring 2014 opening
The Mall at Bay Plaza, adjacent to the outdoor Bay Plaza Shopping Center, is the first enclosed fashion mall to be built in New York City in more than 40 years. The Northeast Bronx site features highway visibility with more than 250,000 cars passing the site daily, and has direct access off Interstate 95 and the Hutchinson River Parkway.
Prestige Properties isn’t cutting any corners on the $300 million-plus development project that will add a 780,000-sq.-ft. enclosed retail mall along with an 1,800-car parking garage.
"We spared no expense," said Sam Shalem, chairman and CEO, Prestige Properties. "We are building something that we — and the community — will be proud of." Macy’s will build a three-story, 160,000-sq.-ft. store — its first ground-up project in New York in 15 years.
VILLAGE AT THE PEAKS
Location: Longmont, Colo. (Hover Road and Hwy. 119)
Size: 500,000 sq. ft.
Developer: NewMark Merrill Mountain States
Key Tenants: Whole Foods, Regal Cinemas, Sam’s Club
Leasing Contact: Allen Ginsborg, [email protected], (970) 377-1135
Status: Scheduled opening is late 2014
The redevelopment of Twin Peaks Mall into Village at the Peaks injects a vibrant village experience into an outdated 28-year-old mall.
Developer NewMark Merrill Mountain States has worked to give the community what it asked for: a stadium-style movie theater, a natural grocer, a large-format discounter and, above all, a place to gather.
With the breathtaking Twin Peaks of the Colorado Rocky Mountains as its backdrop, the new Twin Peaks Mall will offer 400,000 sq. ft. of large-format, anchor and restaurant space, along with 100,000 sq. ft. of boutique and specialty retail.
In May, three major tenants were announced: Longmont’s first Whole Foods Market; a new, state-of-theart Regal Cinemas; and Sam’s Club.
Location: Syracuse, N.Y.
Size: 2.4 million sq. ft.
Developer: Pyramid Management Group
Key Tenants: T.J. Maxx, Macy’s, Lord & Taylor, Dick’s Sporting Goods, Saks Fifth Avenue OFF 5th, Michael Kors, BCBG MaxAzria, Brooks Brothers Factory Store, WonderWorks, Pole Position Raceway, Funny Bone Comedy Club, Toby Keith’s I Love This Bar and Grill, P.F. Chang’s, Cantina Laredo, Gordon Biersch Brewery Restaurants, Coach, Sephora
Leasing Contact: Pete Berardi, [email protected], (315) 422-7000
Status: Construction complete, actively leasing
Located in Syracuse, N.Y., midway between New York City and Niagara Falls, Destiny USA is an easily accessible, fully enclosed, 2.4 million-sq.-ft. travel destination with more than 230 brands, including department stores, luxury outlets, factory stores, traditional retail shops, fine dining and a wide array of entertainment venues.
Destiny USA is the largest LEED Gold certified retail commercial building in the world. More than 29 million annual visits are anticipated in its first full year of operation, according to Travel + Leisure Magazine. Currently at more than 23 million annual visits, Destiny USA is the 8th most visited shopping destination in the country.
RENAISSANCE AT COLONY PARK
Location: Ridgeland, Miss. (I-55 at Old Agency Road exit)
Size: 500,000 sq. ft. upon completion of Phase II
Developers: Mattiace Properties and H.C. Bailey Cos.
Key Tenants: Apple Store, Ethan Allen, Barnes & Noble, The Fresh Market, Aqua The Day Spa, Hyatt Place Hotel
Leasing Contact: Andrew Mattiace, (601) 352-1818, email c/o [email protected]
Status: Phase I open and 95% leased. Construction of Phase II projected to be complete in fall 2014.
Renaissance at Colony Park, in Ridgeland, Miss., brings the finest in fashion and retail shops and restaurants to the Jackson Metro Area and the entire state of Mississippi. First opened in March 2008, Renaissance tenants include — besides those listed above — a lineup of specialty retailers such as Ann Taylor and LOFT, Anthropologie, Banana Republic and Charming Charlie; and restaurant offerings such as Another Broken Egg Café, Biaggi’s Ristorante Italiano, P.F. Chang’s and Ruth’s Chris Steak House.
The open-air Main Street center features a European and Mediterranean-style architecture, and amenities such as an elaborate Italian fountain and beautiful clock tower.
Upon completion of Phase II, Renaissance at Colony Park will consist of approximately 500,000 sq. ft. of building space on 57 acres and 50,000 sq. ft. of office space above the retail shops.
Stride Rite opens Milestone store in Ohio
Lexington, Mass. – Stride Rite Children’s Group has opened its latest “Milestone” concept store at Easton Town Center in Columbus, Ohio. The Milestone concept includes features such as shelves at varying heights so children can easily see all of the styles available, a dedicated “Fit Station” where children can get their feet measured and find out how tall they are by standing against the Fit Totem Pole, rainbow carpeting and a more open floor plan.
"We are excited to continue exploring new potential store locations that both fit the needs of our customer and help our busy mom by providing more convenience and access to the brands and styles that both her kids love and she trusts," said Stephen Donnelly, SVP/GM direct-to-consumer at Stride Rite Children’s Group. "This has been an exciting year for us, between unveiling the new store designs and being named by Footwear Distributors and Retailers of America as the top performer in the full service category."
Stride Rite has confirmed plans for three additional specialty stores to open this fall in Augusta, GA, Houston, and Columbia, MD. The first Milestone store opened in Burlington, Mass., in March of last year.
Serving up Savings
Arby’s Restaurant Group has taken an aggressive stance with regard to its third largest and most controllable expense: energy. Faced with rising costs, the chain developed a strategic energy management plan that identified more than $5.5 million in potential annual savings.
Arby’s worked with Ecova, a Spokane, Wash.-based energy and sustainability management company, to develop a short- and long-term road map for actionable energy savings and measurement. (Arby’s has a history with Ecova, using its expense and data management solution.) The chain’s leadership team met regularly with Ecova to develop a plan that would ensure energy management becomes a norm of Arby’s culture and standard operating procedures.
"Ecova’s unique approach to strategic planning engaged Arby’s leaders across different functional groups to help us develop an energy strategy that was truly built for our success — considering the unique strengths, needs, concerns and constraints of our organization," said Scott Boatwright, senior VP operations, Arby’s Restaurant Group, Atlanta, which has more than 3,400 restaurants system-wide.
The planning process resulted in a clear, data-driven, actionable plan, one that made a strong business case for energy reduction. The plan emphasizes brick-and-mortar investment opportunities and initiative management recommendations. Regarding infrastructure investments, Ecova supported Arby’s finance team in prioritizing opportunities and developing a multi-million dollar capital expense proposal that generated an internal rate of return of 97%.
The proposal was approved by Arby’s board, and the project was started in the first quarter of 2013. It’s now in the install phase, which will continue through the end of the year.
"We will be analyzing results of the project well into 2014," Boatwright said.
The program involves mostly those locations owned by Arby’s, with varying levels of participation. Some are getting new equipment, but all are being asked to participate in the new behaviors emphasized by Ecova, according to Boatwright.
As part of the process, Ecova conducted energy and water audits in a sampling of Arby’s units. The audits identified a target list of 11 low-cost energy-efficiency measures and capital investment opportunities with an annual energy savings of more than $1 million. The measures include behavior modifications to on/off schedules, including water (average water use per restaurant), kitchen equipment, HVAC and lighting.
Other changes and equipment modifications highlighted by Boatwright include:
- Reducing water heater thermostats to supply 135-degree water to meet dishwashing and hand-washing needs;
- Installing low-flow faucet aerators on hand sinks and vegetable sinks and programmable thermostats and low-flow spray valves at the dish sink;
- Adding more energy-efficient refrigeration and lighting solutions; and
- Changing out electronically commutated motors in the walk-in freezer and coolers.
"Additional work will take place in 2014 to include items like additional lighting upgrades and irrigation controls, which will yield incremental savings," Boatwright added.
Employee buy-in to the plan, particularly with regard to behavior change, has been critical.
"We’ve modified our on-boarding materials, as well as employee training materials to drive the ‘efficiency matters’ philosophy through the organization," Boatwright said.
Arby’s has set an initial goal of reducing overall energy intensity by at least 6% (from 2011 baseline) for 2013 and 15% by 2015, the VP added.