New York ICSC show delivers positive attitude, movement
New York City — By all reports, the ICSC New York deal-making conference, held Dec. 5 and 6 in New York City, delivered what the retail and shopping center industries were waiting for: A sense of forward progress.
Chain Store Age heard mostly positive comments from the show, such as “I haven’t seen this much deal action since 2006,” from one happy retail broker in the aisles of the New York Hilton meeting space. Mall developers unveiled redevelopment plans, and social media innovations and rollouts were the theme of the conference.
Jones Lang LaSalle released its North America retail outlook in conjunction with the New York show, and reported that recovery is underway, although not as quickly as some of the more enthusiastic commentators at the conference might hope.
According to JLL’s North America Year-end Retail Outlook report, the retail sector continues to edge tentatively toward recovery, buoyed by a booming start to the holiday shopping season.
However, the report tempered, retail will most likely remain in a holding pattern for at least the next three quarters as the U.S. elections approach, the European debt crisis heightens and lackluster job growth fuels uncertainty.
“Everyone, including consumers, is in a continued wait-and-see mode, delaying major buying and investment decisions until they see how several dynamics play out, including the elections next year,” said Greg Maloney, CEO and president, Jones Lang LaSalle Retail, Atlanta. “Until we have some market certainty in the U.S. and overseas plus sustained high levels of consumer confidence driven by higher paychecks, a stronger stock market and an improved housing market, a robust recovery will elude the retail sector.”
Some retail report highlights include:
- National retail vacancy levels dropped slightly from last quarter’s level of 7.1% to 7.0%, posting a year-over-year drop of 10 basis points.
- Rents continue to hover at what is hopefully a bottom, falling 1.6% year over year and inching down 0.5% since the last quarter to the current national average of $14.65.
- Investment sales volume of significant retail properties totaled $8.2 billion in the third quarter of 2011, down sharply from the second quarter, when data was inflated by the $9.2 billion Blackstone/Centro transaction.
- All of the 18 regional markets that Jones Lang LaSalle tracks are currently tenant favorable and are likely to remain that way through at least the first half of 2012. Houston is the only market that is showing a significant rise in rental rates.
All said, the year-long trend of SLOW retail growth continued this quarter as the dramatic turnaround in market fundamentals that experts predicted for the end of 2011 simply did not materialize, according to JLL’s findings. However, net absorption has been positive for the past 36 months, with 63.8 million sq. ft. absorbed over the past 12 months. New development remains low, totaling just over 38.4 million sq. ft. over the past 12 months.
Among the markets tracked, Chicago continues to report the highest absorption, with 2 million sq. ft. in the third quarter of 2011. Boston and Houston were second and third, with 1.98 and 1.75 million sq. ft., respectively.
Store size was covered in the report as well. The move toward smaller, more efficient store footprints in population-dense urban areas continues, as retailers see the profit potential in core markets. Walmart and Best Buy have both made serious commitments to smaller formats, as have many other retailers. Since grocery retailers have profited the most from urbanization, many brands have embraced the smaller urban store concept including Save-A-Lot, Aldi, Dollar General Market, The Fresh Market, and Fresh & Easy Neighborhood Market. Trader Joe’s is also currently expanding into new locations.
“Retailers are capitalizing on a growing preference for urban living where consumers can walk or bike to their favorite specialty retailer or grocery store in lieu of a long suburban commute,” said Lew Kornberg, managing director, Corporate Retail Solutions, a Jones Lang LaSalle company. “Small formats also allow retailers to experiment with niche markets while staying flexible and efficient.”
Conversely, several anchors and specialty retailers are launching super-sized flagships in New York; Macy’s is adding 100,000 sq. ft. to its Herald Square flagship, an investment of $400 million over the next four years. Century 21 department store is awaiting approval to almost double the size of its downtown Manhattan location. Uniqlo – whose stores typically average between 8,000 and 10,000 sq. ft. – is opening two massive locations totaling 153,000 sq. ft. of space.
Given the mostly positive research from JLL and the tone at a telling ICSC New York conference, there appears to be good reason to believe that the next big event – RECon, in Las Vegas in May – may be significantly closer to what it was pre-recession.
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NYSW Beverage Brands names new president
NEW YORK — NYSW Beverage Brands has namedAmir J. Daibes, P.E., the new president and part owner of the company. Daibes joined the New York-based bottled water company after more than 30 years in the engineering, manufacturing and construction industry.
“This is an exciting, young company positioned for growth with great products and tremendous potential in the marketplace,” Daibes said. “I am honored to be part of the team, and look forward to building its brands and footprint.
Daibes’ long experience in manufacturing and engineering – including his roles as president/managing director of two privately owned and one public companies with millions of dollars in revenues – prepared him well to helm NYSW Beverage Brands, the company said.
New line of home cleaning products hits Best Buy shelves
BENTON HARBOR, Mich. — Whirlpool Corp. is launching Affresh Cleaners, a new line of advanced home cleaning products now available at Best Buy stores nationwide.
"Keeping the kitchen clean has historically been a big chore, so we designed the new line of Affresh Cleaners to combat everyday spills and residue while making cleaning simple," said Wendeline Ortiz, brand manager of Affresh Cleaners.
The new line includes:
Affresh kitchen and appliance cleaner: This citrus-scented cleaner safely removes everyday food spills and stuck-on residue from inside microwaves and refrigerators, as well as such small appliances as blenders, toasters and mixers;
Affresh stainless steel cleaner: Plum-scented, this cleaner removes fingerprints, smudges and residue left behind from daily use; and
Affresh cooktop cleaner, which works to effectively clean glass, ceramic and porcelain cooktops, and removes even the toughest baked-on residue, according to the company.
The complete line of Affresh Cleaners are available nationwide in more than 1,100 Best Buy stores, on BestBuy.com and at select local grocery stores. Visit Affresh.com for more information.