Holland a perfect fit as ICSC chair
Members of the International Council of Shopping Centers (ICSC) elected Elizabeth Holland as chairman, marking only the fourth time in the past 59 years a woman has chaired the organization.
Holland brings a unique skill set to the role given ICSC’s top legislative priority and the upcoming presidential election. The period following the inauguration of a new president is always a critical time in Washington, heralding what is traditionally the most active time in the legislative cycle, according to ICSC.
“I think that everyone can acknowledge that we will need to work hard to bring Marketplace Fairness to a vote between now and the general election. There is much more competition for attention during the first two years of any new administration, which is when a great deal of legislation happens, before the midterm elections,” said Holland, CEO of Chicago-based Abbell Associates LLC.
Holland, 51, is a former senior staff attorney on the National Bankruptcy Review Commission and brings to her role as ICSC chairman a familiarity with Washington, finance and law – in addition to experience running a shopping center development company. Abbell Associates is a 75-year-old private real estate acquisition, development and management company with a portfolio of about 3.5 million square feet of shopping center and office space, of which about 75% is retail space.
Holland also previously served as chairman of ICSC’s Bylaws Committee and for the past year ICSC’s vice chairman. She has led the initiative to overhaul the organization’s bylaws and governance procedures. Besides being a trustee, she has served on ICSC’s Political Action Committee and chaired the Economic Subcommittee. She is a member of the Urban Land Institute and its CRC Blue Council.
“Liz is a very strong choice to serve as our next chairman,” said Brad M. Hutensky, an ICSC past chairman and president of Hutensky Capital Partners, a retail property investment, development and management firm. “She understands the issues facing our industry and the needs of ICSC members, having served as a volunteer for close to two decades. As chairman, Liz will combine this experience with her sharp mind, strong communication skills and dry wit that have made her so effective as ICSC’s first vice chairman.”
Before Holland’s employment by the Bankruptcy Review Commission, during which time she made recommendations to Congress for bankruptcy code reform, she was a restructuring and business reorganization attorney at Skadden, Arps, Slate, Meagher & Flom, in New York City.
Such experience will help ICSC in the event that tax reform comes to the national forefront during the first two years of the next president’s term.
“It is anticipated that everyone is going to have to pay more in any fundamental tax reform scheme, because the government needs more money,” Holland said, noting that it is critical for the retail development industry holds its ground under any new tax proposals. “It’s a very important issue. The Tax Reform Act of 1986 was a cigarette and a blindfold for the commercial real estate industry.”
The top priority for ICSC this year continues to be passage of a bill to require e-tailers to collect and remit state sales taxes, as has long been required of brick-and-mortar retailers. Several bills have been introduced to that effect in recent years under various names, the latest being the Remote Transactions Parity Act (H.R. 2775).
“ICSC really needs to be poised to lead as strong a coalition as it can assemble with regard to main-street fairness to get that through this year,” said Holland, citing the previous incarnation of the bill — the Marketplace Fairness Act — that passed the Senate in 2014 but stalled in the House.
Other aspects of the electronic revolution in retail offer the industry great opportunities to grow and thrive, according to Holland.
“Technology is giving consumers many more tools at their fingertips,” she said, because this has changed the way retailers and shopping centers are designed and operated. By the same token, technological advances are providing efficiencies in everything from energy consumption to property management,” Holland said. “What’s most exciting about retail real estate is its virtual unlimited ability to adapt. ICSC is really at the forefront of these changes and can serve as a central source for disseminating information to its members."
Holland fills a position previously held by past chairman Stephen D. Lebovitz, president and CEO of CBL & Associates. Filling Holland’s roles as vice chairman is Kenneth F. Bernstein, president and CEO of Acadia Realty Trust.
In addition, new trustees were elected including; Jeffrey A. Bayer, president and CEO, Bayer Properties; Scott Carr, executive vice president and chief investment officer, IRC Retail Centers; Karen Janes, senior vice president, global real estate, Ralph Lauren Corp.; Josip Kardun, CEO, Atrium Group Services B.V.; David J. Oakes, president and CEO, DDR Corp.; Brian H. Pall, president, real estate, Hudson’s Bay Co.; Robert D. Perlmutter, senior executive vice president and COO, Macerich.
Taubman talks mobile, malls and Millennials at RECon
Taubman Centers COO William Taubman offered insights on shoppers, property trends and how technology is changing the fundamental experience and brand promise of shopping centers.
To watch his wide ranging conversation with ICSC’s Jesse Tron, click here.
Retail real estate poised for strong finish
The retail real estate market will overcome a slow start to the year and finish 2016 in fine fashion, according to JLL’s U.S. Investment Outlook report.
Released during the International Council of Shopping Center’s RECon show in Las Vegas, the JLL report shows that despite the economy’s ups and downs, retail transaction volumes were strong in secondary markets where population and job growth continued to fuel demand in the first quarter of 2016.The retail sector will likely not see as much volatility as the year progresses while these burgeoning markets and new supply open opportunities for capital that remained dormant in the beginning of the year, according to JLL.
“The U.S. economy experienced volatility in the beginning of this year, and the retail sector reacted in line with trends seen in the country’s macroeconomic environment,” said JLL Managing Director Dave Monahan. “But on the whole, we expect volumes to remain healthy as investment flows adjust to changing dynamics in gateway and secondary markets.”
Primary market activity, with the notable exceptions of Los Angeles and Chicago, which were the first and third most active retail markets for the quarter, respectively, declined after significant gains in recent years. However, that benefitted secondary markets, which garnered $388.7 million in investment, or a near 187% increase.
Markets like Denver and Kansas City stood out for their huge increases in volume, 192% and 881% over comparable 2015 figures, respectively. While much of Kansas City’s volume came from the $723.4-million sale of Country Club Plaza, both cities show the potential for investment as populations continue to grow at a steady pace.
“Private capital and REITs who were once interested mainly in primary markets are beginning to target secondary markets that are experiencing steady population growth and the potential for higher yields,” said JLL Managing Director Margaret Caldwell.
Added Monahan, “Underwriting standards for burgeoning secondary markets have loosened a bit as demand has grown, making it easier for REITs and even foreign investors to justify placing their capital there.”
Those smaller markets are benefitting from consumer surges tied to low oil prices. As JLL Managing Director Jimmy Board notes, middle class folks in smaller markets tend to benefit most from paying less at the pump, and in turn have more discretionary income. That, combined with the fact that online retailers continue to lease brick and mortar locations, has allowed retail to remain attractive.
“We are seeing a lot of liquidity in the retail space right now as CMBS (commercial mortgage backed securities) stabilizes and debt funds, life companies and banks continue to seek out opportunities,” said Board. “For these investors, it’s not only about a specific market, it’s about the make-up of a deal and its potential.”
Though supply remained limited in the first quarter — especially in major markets, this is on course to change as the year progresses. Overall development activity increased 18.1% year-over-year with 29.4 million square feet coming online in the coming months.
That will likely ring true for markets like New York and Miami, too, which both saw lower volumes in the first quarter as trophy opportunities remained limited and rents at a premium. The two cities have the highest rents in the country, ranked first and secondary, respectively, and owners of trophy product are maintaining long-term hold strategies.