Waiting for the next big thing
Desperate economic times produce hardship, but they also give rein to creative and innovative thinkers. The Great Depression of the 1930s produced a host of ideas that formed the foundations of today’s retail and retail shopping center industries.
In 1929, for instance, a group of department stores joined forces and formed Federated Department Stores, with headquarters in Columbus, Ohio.
The following year, Edwards Theatres Circuit opened the first multiplex in the United States.
Publix Super Markets was also founded in 1930.
In 1932, Joseph C. Thompson became president of the bankrupt Southland Ice Co. and reorganized as a retail business selling foods and conveniences. Today, the Southland Corp. operates the franchising business that has spread 7-Eleven stores around the world.
“Now’s the time to look for ideas that will catch on,” Spence Mehl, senior VP of New York City-based RCS Real Estate Advisors, told SiteTalk. “Rents get cheaper as landlords need to fill vacant space and drive traffic. Low rents will attract people with ideas and very little money.”
While waiting for the next big thing, landlords are filling space with retail or non-retail businesses. A business that can pay the rent can have the space. So dance studios, karate studios, skating rinks, health clubs and glow-in-the-dark miniature golf courses are moving into malls and shopping centers.
“Empty freestanding big boxes are attracting churches,” observed Mehl. “I have a trade school looking at a 70,000-sq.-ft. space in Indianapolis right now. And discount stores such as Big Lots, Dollar Tree and Dollar General are moving into large empty spaces.”
General Growth files for bankruptcy protection
New York City General Growth Properties, the second largest U.S. mall owner, filed for bankruptcy protection on Thursday in one of the biggest real estate failures in U.S. history.
Ending months of speculation, the Chicago-based mall owner, which listed total assets of $29.56 billion and total debts of $27.29 billion, sought Chapter 11 bankruptcy protection from creditors, along with 158 of its more than 200 U.S. malls, while it seeks to restructure some of its debt.
Since November, General Growth has warned that it may have to seek protection from its creditors when it was unable to refinance maturing mortgages.
The company said in a statement that it planned to continue exploring strategic alternatives during the bankruptcy protection, from which it is seeking to emerge as quickly as possible through a reorganization that preserves its national business.
General Growth’s filing in the U.S. bankruptcy court in Manhattan makes it one of the largest nonfinancial companies to succumb to the financial crisis in the United States.
Before the bankruptcy-protection filing, the company had defaulted on several mortgages, as well as a series of bonds. It has also put several of its flagship properties up for sale.
Nordstrom Rack to expand in Minn.
Seattle Nordstrom plans to open a 34,000-sq.-ft. Nordstrom Rack, a unit of the company’s off-price retail division, at Arbor Lakes, a Kimco Realty shopping center located in Maple Grove, Minn., in fall 2009.
This will be the retailer’s second Nordstrom Rack in Minnesota with the first Rack located at the Mall of America, 28 miles away in Bloomington, Minn. The company operates one Nordstrom full-line store in Minnesota, which is also located at the Mall of America in Bloomington.