Trademark and Zapolski form JV to redo Napa Center
Fort Worth, Texas — Trademark Property Co. and Zapolski Real Estate LLC have announced a joint venture to lead the $25 million redevelopment, now underway, of Napa Center, a 153,000-sq.-ft. retail and hospitality district in the heart of downtown Napa, Calif.
Slated to open in the fall of 2015, the redevelopment envisions a pedestrian-oriented urban environment featuring more than 40 retailers and restaurants and ARCHER Napa, the previously announced, four-star luxury hotel to be developed and operated by LodgeWorks Partners. Plans call for the hotel to open in late 2015.
“Most comparable U.S. tourist markets have large fashion and specialty shopping venues, with Napa being a notable exception,” said Tommy Miller, managing director and chief investment officer for Trademark. “Our project will deliver the critical mass of upscale shopping and dining that the Napa Valley very much wants and will capture a significant portion of resident retail sales currently leaving the market, as well as unmet tourist demand.”
Devonshire buys Great Lakes in Mentor, Ohio
Whitehouse, Ohio — Devonshire REIT has announced the closing of its acquisition of the Great Lakes Plaza shopping center in Mentor, Ohio, a suburb of Cleveland. Michaels and hhgregg co-anchor the center, which is 100% leased.
Devonshire bought the 81,349-sq.-ft. center from Simon Property Group for $8 million. Goldman Sachs Mortgage Company provided financing.
CBRE: Demand will push rents higher in 2014
Los Angeles — Retail rents in the world’s most expensive markets will rise further in 2014 due to a shortage of available prime locations combined with a lack of new development, according to CBRE Group’s third quarter report on the world’s prime global retail markets.
Hong Kong (US$4,333 per sq. ft.) remains the world’s most expensive retail market by a substantial margin. Hong Kong houses the highest representation of luxury retailers among all global cities. With a healthy tourist market and a lack of available space.
A large rental spread exists between the second most expensive retail rental market — New York City, with retail rent per sq. ft. of US$3,150 — and the third and fourth most expensive markets, Paris and London. Rents in Paris are running to US$1,426 per sq. ft., while London’s rents have reached US$1,275 per sq. ft.
“The rate of growth of prime retail rents, while positive, showed signs of sling in third quarter 2013 as retailers exhibited cautiousness, even as they position their business for the future,” said Raymond G. Torto, global chairman, CBRE Research. “Given the shortage of prime locations and prime properties, rents will likely continue to rise in 2014 albeit at a slower pace.”
While high and rising rents can only be mitigated by more development, there is little prime retail space in the pipeline. In Western Europe, development activity remains limited, although there is some discussion surrounding the redevelopment of existing projects.
Notable exceptions include two large projects set to open in Paris and a significant pipeline planned in France over the next three to four years. While there is no short-term development in London, there is a major project in the southern suburb of Croydon and a planned redevelopment of parts of eastern Oxford Street associated with a new Crossrail station.
In the U.S., the level of shopping center space under construction remains historically low. A notable trend there is the emergence of smaller, “city format” stores from major big-box retailers such as Wal-Mart (Wal-Mart Neighborhood Market) and Target (City Target). However, these developments are not expected to mitigate the high prime rents seen across the U.S.
Asia Pacific has significantly more development underway both in the mature and emerging markets, with new completions in the region totaling 3.4 million sq. ft. in third quarter 2013. Around half of this development is located in emerging markets such as Manila and Bangkok. In 2013 to date, 13.4 million sq. ft. of new retail stock has been delivered to the market. The biggest new addition was the 818,282-sq.-ft. Rock Plaza mall in Guangzhou — the only major new mall completed among China’s major markets during Q3 2013.
Around 124.2 million sq. ft. of new retail space is under construction in Asia Pacific as of the end of the quarter, of which 43.9% is located China. This includes 35 projects in Shenzhen.