Shopping Center Business

MAY 2015

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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312 • SHOPPING CENTER BUSINESS • MAY 2015 site of the 100-year-old Filene's building, called the Burnham Building. If you look at the market fundamentals — that was one of the most under-utilized high street loca- tions in the U.S., a highly visible, highly accessible downtown location. Also, Chi- cago keeps expanding. You can look at how retail has expanded to the west of the Gold Coast, the resurgence of the Loop retail to the south and the trendy neigh- borhoods to the North. You can go city by city. Look at downtown L.A. Look at what is going on in the Arts District. That is the spread of urbanism. In New York, first it was Brooklyn Heights and Park Slope, then Downtown Cobble Hill, Williams- burg, and the spread to Bed-Stuy. It's the Arts District in Miami; South of Market in San Francisco. SCB: We aren't seeing the development we saw 15 years ago. With the lack of supply of better retail, what will that mean for retailers, retail space and landlords? Spiegelman: We aren't building new space as a factor of increased demand. We are basically exchanging occupancy. From a brick-and-mortar perspective, the retail market is consolidating. It is not going away. Brick-and-mortar is still the Number 1 retail channel. Let's be clear about that. But it has consolidated. There is a bigger gap between A and B. Quality projects are fighting for the same group of tenants. So it becomes a complicated discussion. There is always a new market opportunity. For example, look at the new mall Taubman opened in Novem- ber: University Town Center in Sarasota. You have a 1.1 million-square-foot center anchored by Macy's, Saks Fifth Avenue, and Dillard's. There was a market niche there. There are very select development opportunities. For example, the Avalon development in Atlanta. But you can count these development opportunities on one hand. There are lifestyle center projects on the boards in Omaha, Boise, and Kansas City. There is opportunity out there, but it is really limited. It is not a result of an expanding market. It is a result of a market that wants to trade up to better assets, to better opportunities. SCB: Over a longer period of time — say five years out — will we improve the properties we have? Spiegelman: As an example, you can look at what Starwood Retail is doing and their acquisition of the portfolios from Westfield and Taubman. They are tak- ing a shopping center like Willow Bend in Plano, Texas, that has 600,000 square feet of small shop GLA and they are bringing some other components in there to make the center more viable and shopable. They will potentially bring in hospitality or housing to re-adapt components of the property and make a multi-use lifestyle- type opportunity. I think you are going to see a lot of that. But not every property is adaptable. There is still a segment of the shopping center inventory that will go away. There are sites that will reach 60 percent occupancy and they will go away. They will be converted to schools, to housing, to offices, to hospitals. Things will change. SCB AN INTELLIGENT ADVANTAGE. It's what every EB-5 project needs in today's complex and competitive market. Which is exactly what NES Financial Intelligent EB-5 Solutions ® provide – from capital raise, to fund administration, to the immigration process, to loan servicing. Be smart, choose solutions that combine the experience and expertise of the industry leader in EB-5 to ensure your project's success. Learn more. Contact NES Financial today at 1-800-339-1031 or visit nesfnancial.com/intelligent Stop by our booth and discover the intelligent advantage to intelligent EB-5 Solutions.

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