REAL ESTATE

Irvine Company announces a major $150 million reinvestment

BY Melonie Messina

Irvine, Calif. — Irvine Company announced a major $150 million reinvestment in Irvine Spectrum Center located in Irvine, California, in the heart of Irvine Spectrum, a mixed-use community that provides a balanced district of retail, office, and living space.

The reinvestment will feature more than 20 new stores located within two new buildings on the current site of Macy’s, which announced earlier this week the closure of 40 stores nationwide, including the one at Irvine Spectrum Center. Additional upgrades will include new landscaping, outdoor seating and shade areas, state-of-the-art amenities, and circulation and parking-garage improvements.

“The Macy’s closing has been contemplated for months and has provided us with a unique opportunity to rebalance Irvine Spectrum Center with additional retail stores to ensure that it continues as one of Southern California’s premier shopping, dining and entertainment lifestyle destinations,” said Easther Liu, CMO for Irvine Company Retail Properties. “As a master-planning company and long-term owner, we are always exploring how we evolve Irvine Spectrum Center’s vibrancy and relevancy to marry with our customers’ evolving tastes.”

Irvine officials noted they will announce some of the key retailers going into the new buildings over the coming year, emphasizing that the stores will complement and enhance the current tenant mix that includes: Nordstrom, Target, H&M, Apple Store, Anthropologie, lululemon athletica, Forever 21, Brandy Melville and Hurley | Nike SB, in addition to restaurants such as Javier’s, CUCINA enoteca, P.F. Chang’s, Cheesecake Factory, Del Frisco’s Grille, Tender Greens, BRIO Tuscan Grille and IMAX theater.

Between 2014 and 2015, the Irvine Company invested more than $40 million in Irvine Spectrum Center, which added approximately 57,000 sq. ft. of space to bring in new retail stores and restaurants, including Sports Authority, TLT Food, Del Frisco’s Grille, BRIO Tuscan Grille, Kona Grill, as well as relocating and expanding Improv Comedy Club.

In addition the center completed a retrofit of its Giant Wheel (with 12,500 standard bulbs replaced with more than 52,000 energy-efficient LED lights capable of a dazzling 16 million different color schemes), parking garage enhancements and improvements to the “ring road” and Spectrum Center Drive.

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FINANCE

The Container Store reports loss on higher expenses

BY Gina Acosta

The Container Store is cutting its guidance for the year after the company says expenses led it to report a loss in the third quarter.

The Texas-based retailer said same store sales in the quarter were also disappointing: a 0.5% increase compared to the third quarter of fiscal 2014.

“Our key initiatives are gaining momentum, which is encouraging as we position our company for sustained, long-term growth,” said Kip Tindell, chairman and CEO. “However, we are very disappointed with our bottom line results for the third quarter. The shortfall versus our expectations was largely driven by expense items, the majority of which are non-recurring and unusual in nature. We have a history of strong fiscal discipline and expense management, which has always been a core competency, and in response to our third quarter we are increasing our efforts to reduce costs and improve selling, general, and administrative expenses, without harming the momentum of our TCS Closets initiative.”

The Container Sore had a third quarter loss of $1.7 million, or 4 cents a share, from a profit of $6.2 million, or 13 cents a share, a year earlier. The loss reflects 3 cents a share in expenses related to strategic initiatives, which was a cent higher than anticipated, the company said. Revenue increased to $197.2 million from $190.9 million a year ago.

“Overall, we were pleased to see continued improvement in our comparable store sales performance in the third quarter, with much of the improvement directly attributable to TCS Closets and elfa," Tindell said. "Unfortunately, the start to the fourth quarter has been more challenging, which we have reflected in our revised outlook. We have now completed the rollout of our top three strategic initiatives, which were unprecedented in complexity for the company, and we are diligently focused on maximizing sales paired with expense management despite some unpredictability and additional expenses that impacted our results in the third quarter. We planned fiscal year 2015 as an investment year and remain steadfast in our belief that the investment is essential to maximizing the potential of these initiatives.”

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DEVELOPMENT/REDEVELOPMENT

Vacant mall in Tennessee to be redeveloped for $200 million

BY Melonie Messina

Bellevue, Tenn. — Crosland Southeast and Branch Properties have entered into a joint venture to acquire Bellevue Center Mall, an 87-acre property, located in Bellevue Tennessee. Crosland and Branch will collaborate to develop the retail component of the project and will rebrand the Bellevue Center Mall as One Bellevue Place. The projected costs for the redevelopment are approximately $200 million.

The Bellevue Center Mall, which closed in 2008 except for two anchors, has reached a milestone for the redevelopment of the center when the new owners announced the site moved from pre-development to the construction phase ahead of schedule. One Bellevue Place is expected to open in phases with a majority being completed by the end of 2017.

Branch and Crosland have collaborated on other projects in the past and have been working together on the Bellevue property since earlier in 2015. The companies are collaborating to execute the vision that Crosland has advanced through its conversations with the Bellevue Community, Metro Industrial Development Board and the Metro Council.

The property is located within the City of Nashville. The overall project is envisioned to include approximately 350,000 sq. ft. of new retail space featuring anchors Carmike Cinemas and Sprouts Farmers Market, as well as a 111 key Home2Suite hotel and 337 multifamily rental units.

“We are thrilled to be working with Crosland on this exciting redevelopment. One Bellevue Place will be one of the region’s largest redevelopment projects completed in greater Nashville in nearly 15 years. A project of this size and quality will be a catalyst for additional growth, which is exciting for the future of the Bellevue Community and the reason we continue to invest in the greater Nashville Market,” said Nick Telesca, president of Branch Properties.

One Bellevue Place is Branch’s second major Nashville investment during the past year. The company is currently building a 139,969 sq. ft. retail center anchored by The Fresh Market and Marshalls in Hendersonville, Tennessee. Crosland led the development of Providence Marketplace in Mt Juliet, Tennessee.

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