REAL ESTATE

Target holiday tour across Canada heralds planned store openings

BY Alaric Dearment

Mississauga, Ontario — Target will sponsor a tour across Canada that will visit more than 20 communities ahead of the planned opening of its stores in the country, the retailer said Tuesday.

The tour will start in Halifax, Nova Scotia, and conclude in British Columbia in the middle of December. Target plans to open 124 stores in Canada starting in March and April 2013.

"We are excited to be celebrating the holidays with Canadians from coast to coast," Target Canada director of marketing Livia Zufferli said. "We’ve planned surprises in more than 20 communities across the country in the hopes of creating unforgettable memories and giving Canadians a taste of what they can expect when Target opens in 2013."

Target purchased the leases for the Zellers store chain from the Hudson’s Bay Co. in January 2011. Since then, it has worked to convert the stores to Target stores and also boosted its presence in Canada. On Nov. 6, the company announced it would sponsor a competition for up-and-coming Canadian fashion designers, and last week, it announced it would donate up to $1 million to Canadian charities through its Give With Target program.

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REAL ESTATE

Nor’easterly Surge

BY Katherine Boccaccio

Not even a hurricane named Sandy could erode the economic upsurge experienced by the northeastern United States over the last year. What this region rebuilt after the Great Recession has managed to stay strong even in the face of Sandy’s 80-mph winds, record flooding and the damage inflicted by its nor’easter sister that arrived just days after the fall 2012 hurricane.

Most developers in the region agree that the urban areas carry the most attraction for retailers, with the New York City metro — as expected — leading the way.

“Brooklyn is incredibly hot; there’s just no other way to say it,” said Kathryn Welch, senior VP retail for New York City-based Forest City Ratner Cos., a subsidiary of Cleveland-based Forest City Enterprises. “In the last few years, the borough has emerged into the national and even global spotlight as a destination for sophisticated, trend-setting urban life.”

Forest City Ratner is capitalizing on the hip and diverse borough of Brooklyn with its Atlantic Terminal property, a 370,000-sq.-ft. vertical mall built atop the bustling transportation hub at the center of Brooklyn. Forest City Ratner opened Atlantic Terminal in 2004 with Target as its anchor, and many of the center’s tenants have seen best-of-chain sales volumes ever since.

This fall, Forest City Ratner opened the Barclays Center sports arena, home to the NBA’s Brooklyn Nets and also the first building at Atlantic Yards, a $4.9 billion mixed-use destination that will include 6,400 residential units and 250,000 sq. ft. of retail.

“Atlantic Terminal is at the heart of Brooklyn,” Welch said. “This is the borough’s single best retail location, and national retailers who want to establish or cement their presence in the market are looking to plant their flags at the intersection of Atlantic and Flatbush Avenues.”

Atlantic Terminal and Barclays Center, though weighty, are not the sum total of Forest City’s presence in the Northeast. The company operates about 8.6 million sq. ft. of retail divided among Pennsylvania, New York and New Jersey. It made headlines in 2011 with its opening of Westchester’s Ridge Hill in Yonkers, N.Y. — the 1.3 million-sq.-ft. outdoor regional center features new anchor Legoland Discovery Center joining Lord & Taylor, Apple, Whole Foods and L.L. Bean.

Another northeastern mega-market to continue to flex its retail muscle is Philadelphia, whose regional malls and entertainment/dining-heavy offerings draw consumers by the droves. Behind many of the area’s most successful developments is PREIT (Pennsylvania Real Estate Investment Trust), based in Philly but owning more than 23 million sq. ft. of properties in Pennsylvania, Massachusetts, New Jersey and New York.

“PREIT is focused on a dining and entertainment strategy to enhance the shopping experience at a number of our properties. A strong, vibrant restaurant drives foot traffic, draws new customers, extends the length of shopping trips and increases consumer spending,” said Joseph F. Coradino, CEO. “Dining establishments are a great complement to our shopping centers, and we look > forward to more additions throughout our portfolio in the future.”

Grand Lux Café opened at PREIT’s Cherry Hill (N.J.) Mall, enhancing an already impressive list of dining offerings, including The Capital Grille, Bobby’s Burger Palace by Chef Bobby Flay, Seasons 52, Maggiano’s Little Italy, California Pizza Kitchen and Bahama Breeze.

At Moorestown (N.J.) Mall, a transformation from a traditional mall to a fine-dining, entertainment and retail destination is under way. Regal Premium Experience will open a 56,000-sq.-ft., 12-screen theater in 2013, and the redevelopment of the exterior façade of the mall includes a lineup for several restaurants, which can be viewed from the street. The first restaurant, Osteria by Marc Vetri, is set to open in 2013.

And PREIT’s vision for its Voorhees (N.J.) Town Center is to bring together a blend of national retailers with the best of regional and local restaurateurs, merchants and businesses so that it is truly a community where people can shop, dine, play and live. On the Boulevard, Catelli Duo Restaurant opened this fall and Rodizio Grill Restaurant is scheduled to open in December 2012. Iron Hill Brewery & Restaurant, Elena Wu and Burger 21 are scheduled to open in 2013. The addition of restaurants is another step in PREIT’s innovative mixed-use redevelopment of a former enclosed regional mall — and proof that malls are indeed alive and well.

“The mall sector continues to experience moderate improvement, as higher-end portfolios outpace the market in terms of rental rate growth and occupancy,” Coradino said. “Retailers will compete for better centers in terms of concessions and payment.”

And with this year drawing to a close, a look back — at least from PREIT’s vantage point — is a positive one.

“Overall, we would categorize year-to-date 2012 as a further recovery with an optimistic view toward year-end and a healthier retail sector in 2013,” Coradino said.

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R.Lovely says:
Feb-27-2013 03:23 pm

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R.Lovely says:
Feb-27-2013 03:23 pm

Easter is an extraordinary time of year for a lot of people who rejoice both religious and profane events. A great way to keep in mind such fun,easter ideas, easter decorations special proceedings would be by have your own tradition printed easter cards favors to hand over out to friends and family members.

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REAL ESTATE

Focus on: Shopping Center Management

BY Katherine Boccaccio

If there is one booming business inside the shopping center industry, it’s that of third-party management.

Shopping center management — whether you’re talking operational control, marketing programs and strategies, or leasing — is growing by leaps and bounds, as owners find alternative ways to fill the coffers when new construction is at a standstill.

To examine where the management sector is heading, what better group to assemble as our panel of experts than our fastest-growing third-party managers of 2012? In the April/May issue of Chain Store Age, we unveiled the top six based on new domestic and international management and leasing contracts obtained during the preceding calendar year.

Of our top six — (in order of rank) CB Richard Ellis, Jones Lang LaSalle Retail, Fameco Real Estate, Bayer Properties, Vestar Development Co. and Mid-America Asset Management — only No. 1 fastest-growing third-party manager CBRE couldn’t participate in our panel. The remaining five had plenty to say. We asked each what three trends (concerning shopping center management) they predict we will see unfold in 2013.

Jones Lang LaSalle Retail, Atlanta
Panelist: Karen Raquet, director of property management

SUSTAINABILITY

As retailers embrace sustainability, landlords will continue to be focused on implementation of green initiatives, among them:

• Municipalities will continue to develop recycling opportunities enabling landlords to reduce costs and generate revenue;

• Lighting retrofits to more energy-efficient bulbs with payback in less than two years;

• Xeriscaping;

• Transition to solar power in states that provide incentives for the changeover; and

• States where utilities are deregulated offer opportunities to bid out electric usage and resulting in significant savings.

LOCALIZATION

As owners/occupiers look for opportunities to reinvent their retail properties, a more localized approach to managing and leasing assets provides the contract manager with the opportunity to provide integrated retail real estate services for all types of retail properties.

DUAL-ROLE POSITIONS/BUNDLED SERVICES

As owners/occupiers look for opportunities to reduce payroll costs, dual-role positions will continue to evolve:

• Reduced marketing budgets create opportunities for specialty leasing/marketing Dual Role Managers;

• Where geographically feasible, having one manager/marketing manager/specialty leasing manager oversee more than one center;

• Strength in operations for a general manager may result in an operations/management DRM where appropriate; and

• Bundled service opportunities from housekeeping/security providers with one overall supervisor improves efficiency of the program and requires one strong supervisor.

Fameco Real Estate,Plymouth Meeting, Pa.
Panelist: Lawrence R. Zipf, president, Fameco Management Services Associates

Economic metrics for well-located projects will improve, including occupancy, rents and value, with demand first for primary markets, and a continued delay for secondary and tertiary market locations. We continue to observe improved demand for those projects supported by the right demographics, access and tenant mix. Rental rates have stabilized and landlord concessions have decreased. For those properties that are in secondary or tertiary markets, tenant demand is still weak, and those tenants who are in the market are still often undercapitalized, lacking the economic depth to provide comfort when a landlord is making its underwriting decision. Owners of weak projects are most compromised as they balance long-term value for short-term cash flow and increased risk versus cash in hand to meet debt service requirements.

Properties that are underwater today will still be underwater in 2013 and will remain there until some form of work-out with the lender is achieved. Value has decreased dramatically, excess cash flow may be trapped by the lender, and the ability to attract qualified tenants is damaged as the owner has minimal or no capital to invest in fit-out.

Financial performance will continue to be under close scrutiny by owners and lenders.

Bayer Properties,Birmingham, Ala.
Panelist: Jeffrey Bayer, president and CEO

The key trends will fall under the different 3P areas of leasing, management and marketing:

LEASING

1. The leasing focus during the recent economic downturn was to maintain property occupancy levels, which required more attention on local and regional retailers, in addition to non-traditional shopping center users. With the more recent improvement in the economy and retailer sales, occupancy levels have increased and national retailers are expanding again.

The trend is now toward increasing GLA productivity within the occupied space … optimizing the retail mix to generate the highest possible sales per square foot.

PROPERTY MANAGEMENT

2. Retailers have successfully utilized a multichannel approach of brick-and-mortar stores, in addition to e-commerce sites for several years. But when a large online retailer such as Amazon announces a focus on the fashion apparel arena, it becomes even more critical that the brick-and-mortar shopping venues provide a different and improved customer experience.

The trend is toward creating a shopping center experience that cannot be duplicated online.

MARKETING

3. Marketing Spend Increase: Shopping centers, not unlike most businesses, tend to cut the marketing spend during a challenging economy.

The trend is moving toward an increase in marketing spending, not only in event marketing, but also in traditional consumer advertising.

Vestar Development Co.,Phoenix
Panelist: R. Patrick McGinley, VP property management

1. Increased use of technology to enhance property management efficiency: We strongly believe that an asset is best served by having the property manager in the field and at the site as often as possible. To enable this, we have invested significantly in systems to allow the manager access to data when outside the office, including enhanced lease administration programs, electronic facility ID plans and access to financial data.

2. Increased emphasis on customer service and enhancing the shopping center experience: This comes into play in two ways — through technology and a renewed community focus that includes an increased emphasis on community outreach programs. On the tech front, as more customers rely on their smartphones for information, we will stay a step ahead of the technology to provide them everything from shopping center and store information to directories and maps, as well as redeemable offers or contests for app users. In addition, we continue to better refine our utilization of social media, including Facebook, Twitter, Instagram and Pinterest.

3. Reintroduce corporate sponsorship and additional revenue income for clients.

Mid-America Asset Management,Oakbrook Terrace, Ill.
Panelist: Michelle Panovich, principal/senior VP

The industry is still in recovery mode, and it has a long way to go. There will continue to be ebbs and flows, but overall the retail market is healthier now, and I see that trend continuing for 2013. A lot of the mid- and large-box space has been filled and new tenants are entering the market, but there is still very little new development and moderate redevelopment. Some rent reductions are still being requested and tenants are still filing for bankruptcy, but that situation has generally leveled off.

Asset managers must continue to find creative ways to help existing clients maximize their assets. Obviously, everyone is watching every dollar and weighing the value of everything from certain tenant improvement costs to the costs for daily services, such as landscaping and snow removal. We put significant effort in negotiating lower rates and leveraging our size to save money for our clients.

Receiverships will continue into 2013. Although the percentage of receiverships has held steady, there is a shift in the type of property that is now going into foreclosure. They may not be as troubled, but may simply be dealing with a mortgage maturity that has a significant drop in value and as a result a new loan is much harder to place.

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