Shopping Center Business

MAY 2015

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

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320 • SHOPPING CENTER BUSINESS • MAY 2015 Rebels' first U.S. location signify that it's not just techies who can hit it big in Sili- con Valley. Entrepreneurs of all types are welcome. "We have waited a while to open our first U.S. store because we wanted to find the perfect place," said Bethlehem Tilahun Alemu, SoleRebels' founder and CEO, in a statement. "A place that epito- mized the creativity, innovation, craziness, disruption and the overall 'walk naked' ethos that SoleRebels is all about. Silicon Valley is the epicenter of all these things, and so it's the perfect place to launch our U.S. retail store business." While unique creations are always wel- come in Silicon Valley, there are plenty of nationally and internationally recognized brands also performing well in this market. They include Bonobos, Brooks Brothers and Franco Uomo. These retailers can be found at some of the area's most popu- lar destinations, such as Santana Row, a mixed-use project in San Jose that in- cludes a Tesla interactive experience. The area has a population of 566,856, with an average household income of $105,261 within a five-mile radius. Santana Row also contains office, mul- tifamily and hospitality components that highlight another growing trend in the valley. Across the street, Westfield has a major expansion under way at its Valley Fair mall [see related article on page 298] also focusing on more upscale tenants. "We are seeing more examples of mixed-use developments, both vertical and horizontal, in our marketplace," Chung says. Projects like Santana Row, Main Street Cupertino and the ever-all-encompassing campuses of companies like Google, Facebook and LinkedIn prove a solid marriage can exist between complemen- tary service providers. "Retailers must learn to operate in vertically integrated projects in order to succeed," Grundman says. "Tradition- ally a suburban market, Silicon Valley is trending toward urban in order to satisfy the demand of the exploding population." The three powerhouse companies list- ed above are generally tight-lipped about future plans, but they all have current projects in the works. Facebook purchased the 56-acre Men- lo Science & Technology Park in Menlo Park this past February; Google signed a lease for the 1.9-million-square-foot Mof- fett Place in Sunnyvale this past October; and LinkedIn grabbed Lester Industrial Park in Mountain View this past Decem- ber. Grundman notes an ideal mix for this employer-driven campus environ- ment includes financial services, restau- rant groups and small, unique retailers. In other words, the next SoleRebels yet to be discovered. SCB Retail investors are also bullish on Silicon Valley. Weingarten Realty Investors recently purchased Cambrian Park Plaza in San Jose, a 170,000-square-foot center. Number 105 TM Thriving Markets Why retail sales and development are on an upswing. T he net-lease sector fnds itself in an interesting place. On one hand, many brokers say a lack of high-quality supply is the biggest issue facing the sector. On the other hand, investors are having no prob - lem fnding deals. Many brokerage frms fnished 2012 with big increases in net-lease transac- tion activity. Real Capital Analytics re- ported year-over-year sales increases in nine of the past 10 quarters. How- ever, with little new construction on the horizon, 2013 may see more inves- tors competing for fewer deals. The current net-lease market reads like a textbook example of a supply- demand imbalance. Investors abound, and they are armed with historically cheap debt and the promise of healthy returns. "The problem is that there isn't nearly enough supply on the market to meet the demand," says Winston Orzechowski, research director for Reston, Va.-based Calkain Cos., which specializes in net-lease investments. The reasons for this situation are threefold. First, the relative security of net-lease properties has made them a hot investment. According to Calkain, the average capitalization rate for net- lease retail properties has trended NET LEASE TURNS UP THE HEAT Net-leased properties are a hot commodity due to dwindling supply and high demand. By Coleman Wood see NET LEASE, page 29 N ew York City ranks as one of the top retail markets in the world. Competition is so ferce for spots on Fifth Avenue that it had ranked the most expensive retail des- tination in the world for a decade — until Causeway Bay in Hong Kong pushed Fifth Avenue down to second place in last year's annual ranking by Cushman & Wakefeld. "In terms of global branding, New York City is one of the most important locations for retailers. In the context of global high streets, we're on par with — or have surpassed — London, Par- is, Tokyo, Hong Kong and Shanghai," says Gene Spiegelman, executive vice president with Cushman & Wakefeld. And retailers aren't just focused on Fifth Avenue. Last summer, Cushman & Wakefeld reported that New York held four spots on the list of top 10 retail markets in the world, including Fifth Avenue, which averaged rents of $2,500 per square foot at that time; Times Square, with rents of $2,100 per square foot; East 57th Street, with rents of $1,100 per square foot; and Madi- son Avenue, with rents of $1,100 per square foot. Spiegelman predicts that Fifth Av- enue will again outrank all other retail rents in the world this year. "And I believe Times Square has the poten- tial to rank second this year," he says. "Just think about how many eyes see a store in the historical area of Times Square." Some markets in Manhattan — namely, Fifth Avenue, Times Square, and SoHo — have exceeded their high watermarks in terms of average ask- ing rents, says Ariel Schuster, execu- tive vice president with RKF. He notes that the market hit bottom in 2009 and that it has taken four years of slow and steady growth to reach pre-recession rents. Now the question is: how long will the growth continue? "If greater ab- sorption pushes rents higher, what will be the demand at the higher rents?" Spiegelman asks. "We'll begin to see a trend in 2014. That is when we'll fnd out if we have a trend line that indi- cates continued growth or if we've hit a ceiling. Granted, it would still be a very high ceiling." The Strength of NYC Manhattan is a unique market, Schuster says. "Many tenants are here for the branding, and it is typically the frst stop for European retailers and other international tenants that want a U.S. presence." While the U.S. has long been a tar- geted market for major retailers glob- ally, the global economic situation may create even more interest. "As much as our economy as been in a reces- sion, the European economy has been worse. Consumers there are not spend- ing money and European retailers are coming here," says Chase Welles, part- ner with SCG Retail, a division of The Shopping Center Group that focuses on urban retail. "The added international compe- tition pushes rents higher," Welles notes. Manhattan also attracts many tour- ists — which in turn attracts many re- THE HigH STREETS HiT NEw HigHS Increased consumer spending and greater international competition push retail rents in some Manhattan submarkets to record levels. By Jaime Lackey www.REBusinessOnline.com May2013•Volume9,Issue6 Wilder Companies Develops The LOOP - Hudson Valley page 24 Nordblom Co. Develops 3rd Ave page 16 page 22 Boston Market Highlight Philadelphia & Delaware Market Highlight page 18 INSIDE THIS ISSUE see RETAIL, page 26 Manhattan Retail by Submarket Average Ground Floor Asking Rent 4Q11 - 1Q13 Source: Cushman & Wakefeld Please Note: As of 1Q12, the asking rents and availability rate of the Times Square submarket include the Bowtie region only. No 2011 data available for Flatiron, Meatpacking, & Lower Manhattan. w i t h b t i o n a c p o r t e d i n n i n e v e r , w t h e h o t o r s c o T h e l i k e a d e m a n a n d t h c h e a p r e t u r n " T h e n e a r l y t o m e O r z e c h R e s t o n s p e c i a T h e t h r e e f o n e t - l e a h o t i n v t h e a v l e a s e g t h C u s h m a n & W a k e f e l d . e r s a r e n ' t j u s t f o c u s e d o n e . L a s t s u m m e r , C u s h m a n d r e p o r t e d t h a t N e w Y o r k p o t s o n t h e l i s t o f t o p 1 0 t s i n t h e w o r l d e , w h i c h a v e r s q u a r e f o o t a e , w i t h r e n t s o E a s t 5 7 t h S t r e e r s q u a r e f o o t ; w i t h r e n t s o n p r e d i c t s t h a i n o u t r a n k a l w o r l d t h i s y e s S q u a r e h a s s e c o n d t h i s y e a b o u t h o w m a e h i s t o r i c a l a r r k e t s i n M a h A v e n u e , T i m — h a v e e x c e e d e i n t e r m s o f a a y s A r i e l S c h u a r - b - y h s - n d - e t - e s e - s r - e - W i l d e T h e L h i a & D e l a i g h l i g h t p a g e 1 8 6 S o u r c e : C u s h m a n & W a k e f e l d P l e a s e N o t e : A s o f 1 Q 1 2 , t h e a s k i n g r e n t s a n d a v a i l a b i l i t y r a t e o f t h e T i m e s S q u a r e s u b m a r k e t i n c l u d e t h e B o w t i e r e g i o n o n l y . N o 2 0 1 1 d a t a a v a i l a b l e f o r F l a t i r o n , M e a t p a c k i n g , & L o w e r M a n h a t t a n . s t o f t o p 1 0 d , i n c l u d i n g e r a g e d r e n t s a t t h a t t i m e ; o f $ 2 , 1 0 0 p e r e t , w i t h r e n t s ; a n d M a d i - o f $ 1 , 1 0 0 p e r a t F i f t h A v - l l o t h e r r e t a i l y e a r . " A n d I s t h e p o t e n - a r , " h e s a y s . a n y e y e s s e e r e a o f T i m e s a n h a t t a n — m e s S q u a r e , e d t h e i r h i g h a v e r a g e a s k - u s t e r , e x e c u - t i v e v i c e p r e s i d e n t w i t h R K F . H e n o t e s t h a t t h e m a r k e t h i t b o t t o m i n 2 0 0 9 a n d t h a t i t h a s t a k e n f o u r y e a r s o f s l o w a n d s t e a d y g r o w t h t o r e a c h p r e - r e c e s s i o n r e n t s . N o w t h e q u e s t i o n i s : h o w l o n g w i l l t h e g r o w t h c o n t i n u e ? " I f g r e a t e r a b - s o r p t i o n p u s h e s r e n t s h i g h e r , w h a t w i l l b e t h e d e m a n d a t t h e h i g h e r r e n t s ? " S p i e g e l m a n a s k s . " W e ' l l b e g i n t o s e e a t r e n d i n 2 0 1 4 . T h a t i s w h e n w e ' l l f n d o u t i f w e h a v e a t r e n d l i n e t h a t i n d i - c a t e s c o n t i n u e d g r o w t h o r i f w e ' v e h i t a c e i l i n g . G r a n t e d , i t w o u l d s t i l l b e a v e r y h i g h c e i l i n g . " T h e S t r e n g t h o f N Y C M a n h a t t a n i s a u n i q u e m a r k e t , S c h u s t e r s a y s . " M a n y t e n a n t s a r e h e r e f o r t h e b r a n d i n g , a n d i t i s t y p i c a l l y t h e f r s t s t o p f o r E u r o p e a n r e t a i l e r s a n d o t h e r i n t e r n a t i o n a l t e n a n t s t h a t w a n t a U . S . p r e s e n c e . " W h i l e t h e U . S . h a s l o n g b e e n a t a r g e t e d m a r k e t f o r m a j o r r e t a i l e r s g l o b a l l y , t h e g l o b a l e c o n o m i c s i t u a t i o n m a y c r e a t e e v e n m o r e i n t e r e s t . " A s m u c h a s o u r e c o n o m y a s b e e n i n a r e c e s s i o n , t h e E u r o p e a n e c o n o m y h a s b e e n w o r s e . C o n s u m e r s t h e r e a r e n o t s p e n d i n g m o n e y a n d E u r o p e a n r e t a i l e r s a r e c o m i n g h e r e , " s a y s C h a s e W e l l e s , p a r t n e r w i t h S C G R e t a i l , a d i v i s i o n o f T h e S h o p p i n g C e n t e r G r o u p t h a t f o c u s e o n u r b a n r e t a i l . " T h e a d d e d i n t e r n a t i o n a l c o m p e t i t i o n p u s h e s r e n t s h i g h e r , " W e l l e n o t e s . M a n h a t t a n a l s o a t t r a c t s m a n y t o u r i s t s — w h i c h i n t u r n a t t r a c t s m a n y r e N o r d b l o m C o . D e v e l o p s 3 r d A v e p a g e 1 6 P h i l a d e l p h M a r k e t H i I N S I D E T H I S I S S U E s e e R E T A I L , p a g e 2 6 STUDENT HOUSING BUSINESS ® JAN UARY/ FE B R UARY 2012 PLUS: B i R m i Ng hAm-SoUth E R N'S R E S i d E Nt PR E S i d E Nt towN & CoU NtRY: oFF-CAm PUS d EvE LoPm E Nt tR E N d S th E S h B i NtE Rvi Ew: th E LYN d Com PANY'S dAvi d LYN d 2012-13 LEAS i Ng — d E mAN d & R E NtS Both U P PUShiNg iNNovAtioN oN-CAmPUS 'PRivAt E' dEvELoPERS ARE mAkiNg thEiR mARk oN CAmPUS, BUt whAt'S thE FEEdBACk FRom CoLLEgE hoUSiNg oFF iCERS? B i R t o w N & t h E L Y N d C d E m P L U S : R m i N g h A m - S o U t h E R N ' S R E S i d E N t P R E S i d E N t C o U N t R Y : o F F - C A m P U S d E v E L o P m E N t t R E N d S t h E S h B i N t E R v i E w : C o m P A N Y ' S d A v i d L Y N d 2 0 1 2 - 1 3 L E A S i N g — m A N d & R E N t S B o t h U P www.francemediainc.com Our magazines, newsletters, websites and conferences cover all aspects of commercial real estate. We offer those in commercial real estate the ability to receive content specialized to their geographic area and sector. From restaurant f acilities to medical office and student housing to shopping centers, we cover it all. e r s , w e THE MAGAZINE FOR RESTAURANT MAINTENANCE, OPERATIONS & CONSTRUCTION APRIL/MAY 2012 RESTAURANT FACILITY BUSINESS RESTAURANT FACILITY BUSINESS ® With a new prototype just launched, CiCi's Pizza plans 500 new restaurants by 2020 A Piece of the Pie PLUS w What's New In LED Lighting: 3 Case Studies w Recycling Water In Restaurants w Economic Remodels & Refreshes w Strategic Sourcing In Landscape Maintenance w HVAC Spotlight: Heat Recovery Technology w Benefts Of Unglazed Ceramic Quarry Tile Benefts Of Unglazed Ceramic Quarry Tile N e w Y o t h e t o w o r l d f o r s p o t s o n r a n k e d t h e m t i n a t i o n i n t u n t i l C a u s e w p u s h e d F i f t h p l a c e i n l a s t C u s h m a n & " I n t e r m s Y o r k C i t y i s l o c a t i o n s f o r g l o b a l h i g h — o r h a v e s i s , T o k y o , H s a y s G e n e S p r e s i d e n t w i A n d r e t a i l F i f t h A v e n u e & W a k e f e l d h e l d f o u r s p r e t a i l m a r k e F i f t h A v e n u o f $ 2 , 5 0 0 p e T i m e s S q u a r s q u a r e f o o t ; E o f $ 1 , 1 0 0 p e s o n A v e n u e , s q u a r e f o o t . S p i e g e l m a e n u e w i l l a g r e n t s i n t h e b e l i e v e T i m e t i a l t o r a n k s " J u s t t h i n k a a s t o r e i n t h S q u a r e . " S o m e m a n a m e l y , F i f t a n d S o H o — w a t e r m a r k s i n g r e n t s T H E I n c r e a s e r e t a i l r e B y J a i m e L a c GreenStreet, formerly known as the Houston Pavilions, is one of the many mixed-use developments in Texas currently under construction or renovation. see DEVELOPMENT, page 40 see METROS, page 41 Plaza at Preston Center commands some of the highest rental rates in Dallas. Rates at the upscale shopping destination reached $70 per square foot in some instances. MONITORING THE METROS Retail experts highlight market fundamentals, activity of Austin, Dallas/Fort Worth and Houston. www.REBusinessOnline.com May 2013 • Volume 9, Issue 3 SERVING THE MASSES Retail developments, redevelopments ref ect population, job growth in Texas. By John Nelson LIKE THE OLD COUNTRY Adriatica Village in McKinney borrows unique design, lifestyle from Croatian f shing village. By John Nelson see ADRIATICA page 44 Quest for yield sparks competition among retail lenders page 30 Winstead PC gives legal update that tenants and landlords need to know page 34 Low supply and high demand makes net-leased properties a hot commodity page 36 INSIDE THIS ISSUE O n the Croatian coast of the Adriatic Sea is a fishing vil- lage called Supetar, which was originally settled in 1577. The cobblestone streets, stone architec- ture and communal living of the villagers inspired visiting devel- oper Jeff Blackard to construct a similar community in McKinney, a suburb of Dallas. Blackard's vision came to life in the form of Adriatica Village, a 45-acre mixed-use devel- opment located at Virginia Park- way and Stonebridge Drive. T he Lone Star State is adding jobs at a high clip, especially in its major metropolitan markets. The Bureau of Labor Statistics reports that total nonfarm employment in Texas is up 3.1 percent year over year, ending on March 31. Three retail brokerages from Austin, Dallas and Houston write about the strong fundamentals and leasing ac- tivity in their territories. The brokers report that retailers and restaurants are benefi tting from the state's job growth and are expanding their presence in the state's major markets. T he spotlight has shone bright on Texas for its growth in employ- ment and its lucrative oil and gas, healthcare and technology industries in recent years. Not discussed as often is the state's escalation in population. According to the 2010 Census, Texas reported having 25.1 million residents, an increase of 4.3 million people when compared to 2000 Census fi ndings. The increase was the largest leap by any state in terms of number of people. Tex- as is the second most populous state, behind only California, and has grown from natural increase (births minus deaths), immigration and migration. The majority of the population is located in or around the major metro- politan areas in Texas, mainly Austin, Dallas/Fort Worth, Houston and San Antonio. According to the University of Texas at Austin, 70 percent of the entire Texas population lives within the Texas Triangle, an area formed by Interstates 10, 35 and 45, and anchored by the state's four main cities. Retail development and redevelop- ment starts are predicated on the de- mand for new products coming on line. The demographics surrounding a new retail development must sup- port the new shops and restaurants. As such, job creation and population growth are among some of the more desirable metrics to retail developers. Marcus & Millichap Real Estate Ser- vices has published its predictions for how much retail supply will be added to the four metros in the calendar year, in addition to how many jobs will be BUSINESS BUSINESS SHOPPING CENTER SHOPPING CENTER L E A D I N G T H E W AY T H R O U G H T H E 2 1 S T C E N T U R Y ® AUGUST 2013 RETAIL IN FLORIdA IS BACk! MENIN dEvELOPMENT CONTINUES ACTIvITY ONE dAYT ONA RACES T OwARd SUCCESS PLUS: NE w PROjECTS HIGHLIGHT BOSTON MARkET wHAT MAkES A SUCCESSFUL STORE? AIRPORT RETAIL TAkE S OFF PLUS: MALLS PUSH ANTI-BULLYING CAMPAIGN ALLOCATING MARkETING dOLLARS TO RETAILE RS S P T r t d s u . S E P T t i e s i t y u p p l y Me rcy Ridge ta kes the LEED on g reen Case Study The ma ny roles of AEW's Beth Bu rnham Ma ce The SHB Interview Health ca re re fo rm's impa ct on industry Management Th ree Living designs with se rvi ce in mind Company Profile H O U S I N G B US I N ESS SENIORS The Magazine for Seniors Housing Real Estate and Operations Constru ction in Flo rida he ats u p. The Sonata at Melbourne is a new luxu ry re ntal co ntinuing ca re inde pende nt livin g, assisted living and memo ry ca re. Hot spots ® Development As new construction ticks up across the country, could some markets be heating up too fast? www.REBusinessOnline.com May2013•Volume11,Issue9 The 64-acre Liberty Center development is coming to Cincinnati. page 14 Milwaukee's Great Food Fight Continues page 24 page 32 Rethinking the Retail Supply Chain Developers Restart Retail in Cincinnati page 28 INSIDE THIS ISSUE T en years in the making, Rook- wood Exchange, the $125 million encore to the Jeffrey R. Anderson Real Estate's Rookwood developments in Norwood, a midtown suburb of Cincinnati, is nearing completion. The 12-acre, mixed-use project is slated for a grand opening in 2014. Although Jeffrey R. Anderson Real Estate's vision for Rookwood Ex- change began as early as 2003, the company didn't break ground until 2011. The mixed-use development of- fers a work-live-play environment and features a multi-story, Class A offce building, two new-to-market restau- rants (Seasons 52 & Capital Grille), a health club, a 750-car parking garage and a 123-room Courtyard by Marriott Hotel. "Everybody likes to harp on the idea of live, work and play, but what the The focal point of Rookwood Exchange is an eight-story, 230,000-square-foot building that is currently under construction. Rookwood' S ENcoRE The fnal phase of Cincinnati's Rookwood developments nears completion. By Rachel Goff see DETROIT, page 34 see ROOKWOOD, page 36 E ver since she moved to the city of Detroit 13 years ago, Olga Stella has closely observed the pros- perity enjoyed by retailers and restau- rants that bring their "A game" to the market. "Every retailer that has deliv - ered a high-quality product — either a well-curated shop with beautiful win - dow displays and good product, or a restaurant that has wonderful food and a great ambience — does very, very well in Detroit." Stella is not only a city resident. She also happens to be the business de- velopment manager for the Detroit Economic Growth Corp. From 2009 through 2012, the private, nonproft organization facilitated the creation of 25,000 jobs and $2.1 billion of invest- ment in the city. While much media attention has un- derstandably focused on the growing real estate empire of Quicken Loans founder Dan Gilbert in the city's cen- tral business district, two retail proj- ects nearing completion in Detroit have created a lot of buzz. Filling a void Whole Foods Market, the natural and organic foods supermarket, will open a 21,650-square-foot store in De- troit on June 5. The much-anticipated store, located at Mack Avenue and John R. Road in Midtown, will gen - dowNTowN dETRoiT RESURgENcE The city's growing workforce spawns retail, restaurants and a positive vibe. By Matt Valley T he net-lease sector fnds itself in an interesting place. On one hand, many brokers say a lack of high-quality supply is the biggest issue facing the sector. On the other hand, investors are having no prob- lem fnding deals. Many brokerage frms fnished 2012 with big increases in net-lease transaction activity. Real Capital Analytics reported year-over-year sales increases in nine of the past 10 quarters. However, with little new construction on the horizon, 2013 may see more investors competing for fewer deals. The current net-lease market reads like a textbook example of a sup- ply-demand imbalance. Investors abound, and they are armed with historically cheap debt and the prom- ise of healthy returns. "The problem is that there isn't nearly enough supply on the mar- ket to meet the demand," says Win- ston Orzechowski, research director for Reston, Va.-based Calkain Cos., which specializes in net-lease invest- ments. The reasons for this situation are threefold. First, the relative secu- rity of net-lease properties has made them a hot investment. According to NE T LEA SE TURNS UP T HE HEAT Net-leased properties are a hot commodity due to dwindling supply and high demand. By Coleman Wood see NET LEASE, page 37 www.REBusinessOnline.com May2013•Volume14,Issue2 Investor interest intensifes in Miami's offce market. page 27 Net Lease Turns Up Heat page 30 page 20 Hotel Markets to Watch in Southeast Consumer Spending Binge Ends page 32 INSIDE THIS ISSUE see Q&A, page 38 Medical offce sales, construction to accelerate going forward, according to experts. By Liz Burlingame Tommy Tift President and CEO of HealthAmerica Realty Group John Willig Principal of Ackerman Medical at Ackerman & Co. Lee Asher First Vice President with CBRE's Healthcare Capital Markets Group T he healthcare real estate sector is set to rank as one of the most ro- bust property types this year as acquisitions across the Southeast con - tinue to rise. Medical offce sales vol- ume in Florida rose to $242 million in the fourth quarter of 2012, up from $112 million during the same period a year earlier, according to data from Real Capital Analytics. In North Carolina, medical offce sales volume in the fourth quarter reached $77.8 million, up from $7.5 million the same time the year before. The data includes both property and portfolio transactions valued at $2.5 million and up. Tommy Tift, founder of Atlanta- based HealthAmerica Realty Group, says he expects greater confdence, growth and demand in the health- care industry this year. Demand for space will be driven by M&A activity, the adaptive reuse of other types of buildings, such as offces for medical use — which allows health systems to more quickly and cost-effectively go to market than if they were to build a new facility — and the aging baby boomer population. "Every day you have 10,000 people turning 65," says Tift. "With baby boomers, it's like a freight train each year — there's more people in that category of 65-year-olds, which is where a majority of the healthcare demand comes from." Healthcare real estate construction is expected to be highly active, too. LUXURY BRANdS SET UP SHoP i N Mi AMi High-end retailers are branching out into the city's neighborhoods amid increasing sales. By Liz Burlingame At nearly 3 million square feet, Miami's Brickell CityCentre project will include offce, retail, residential and hotel space. The frst phase of the project is scheduled for completion in 2015. Rendering courtesy of Swire Properties F or decades, Miami shop - pers craving Dior perfume or Hermes' leather handbags were limited to one retail destination: Bal Harbour Shops. The open-air mall has remained largely unchallenged in the area's luxury market, and was lauded as one of the most proftable centers in the country last year. In August, the center recorded sales of $2,555 per square foot, nearly six times the estimated $451 per square foot industry average, according to an annual survey by the Interna- tional Council of Shopping Centers (ICSC). The center is home to a large collection of luxury shops, including Brunello Cucinelli, Chanel and Dolce & Gabbana. But a shift in Miami's retail market- place has started to bring some stiff competition. Based on the city's rising see RETAIL, page 35 HEALTHcARE REAL ESTATE'S Big di LEMMA: dEMANd FAR gREATER THAN SUPPLY n e t - l e a s e s e c t o r f n a n i n t e r e s t i n g p l a c h a n d , m a n y b r o k e r s g h - q u a l i t y s u p p l y i s t f a c i n g t h e s e c t o r O n i n v e s t o r s a r e n d i n g d e a l s . n y b r o k e r a g e b i g i n c r e a s e s i n i v i t y . R e a l C y e a r - o v e r - y o f t h e p a s t t h l i t t l e n e z o n , 2 0 1 3 m p e t i n g f o r u r r e n t n e t - l x t b o o k e x a i m b a l a n c e y a r e a r m e b t a n d t h e p r o b l e m i n o u g h s u p t h e d e m a n w s k i , r e s e V a . - b a s e d C e s i n n e t - l e e a s o n s f o r d . F i r s t , t h e p r o p e r t i e s s t m e n t . A c c a g e c a p i t a l i t a i l p r o p e s e e N C o m p a n i e O P - H u d s B o M a r e b i c t i d y e o w i t o r i z o m p c u t e x n d h e y d e n s . e p y e n e e t h o w n , V a l i z e r e o l d a s e v e s v e r a r e t e r C L O O w a 8 f n d s i t s e l f c e . O n o n e s a y a l a c k t h e b i g g e s t n t h e o t h e r m a r k e t s b e h e a t i n g u p t o o f a s t ? THE MAGAZINE FOR RESTAURANT MAINTENANCE, OPERATIONS & CONSTRUCTION APRIL/MAY 2012 RESTAURANT FACILITY BUSINESS RESTAURANT FACILITY BUSINESS ® With a new prototype just launched, CiCi's Pizza plans 500 new restaurants by 2020 A Piece of the Pie PLUS R E S F A C I R E S F A C I F A F A A P R I L / M A Y 2 0 1 2 I N E S S I N E S S i t h a n e w p c h e d , C i C i ' s e w r e s t a u r a A P t h e A s the tech sector booms and creative offce space becomes all the rage, WREB decided to reach out to cor- porate real estate executives to learn about what's important to their clients now. What types of companies are currently most active in the corporate real estate arena? We see a wide range of companies active in corporate real estate, including many of our clients in the technology, consumer THE HEA dQUARTERS: A PHoENiX RiSES iN SAN di E go By Lori Putnam Like the legendary phoenix, the Old Police Head- quarters complex will rise again thanks to a $40-mil- lion transformation. Terramar Retail Centers has turned this complex, which has earned a listing on the National Register of Historic Places, into a 100,000-square-foot retail, dining and entertainment destination that will open this fall. It is located at 789 West Harbor Drive, just steps from the waterfront in San Diego's Seaport District. It is also within walk- ing distance of the San Diego Convention Center, several waterfront hotels, the Downtown business core and high-rise residences. The former Old Police Headquarters was built in 1939 and designed by Charles and Edward Quale and Alberto Treganza. When the property makes its new debut, however, visitors will notice that the structures have retained their original mix of archi- tectural styles, including Spanish Colonial, Pueblo, Mediterranean and Classic Revival. The Headquarters is composed of four structures set around a large central courtyard that will fea- ture fountains, trees and colorful landscaping. This space will also serve as the venue for a variety of outdoor entertainment. The buildings, which used to house fve courtrooms, a law library, crime lab, indoor shooting range, emergency hospital, jail and coRPoRATE TENANTS' EVoLV i Ng NEE dS Five of the West's top corporate real estate experts discuss what their clients are seeking in offce space. By Nellie Day see CORPORATE, page 52 see RETAIL, page 49 RE dEF i NiNg RETAiL A look at some of the biggest issues facing the retail market out West. Compiled by Nellie Day Colorado Market Highlight page 24 page 38 Net Lease Turns Up The Heat Healthcare Real Estate In The West page 34 www.REBusinessOnline.com May2013•Volume10,Issue9 H. Hendy Associates worked on the offces of Telogis, where transparent, open areas encourage workplace collaboration. Heidi Hendy H. Hendy Associates in Newport Beach, Calif. Terramar Retail Centers is turning the Old Police Headquarters complex in San Diego into a retail, dining and entertainment destination called The Headquarters. A s the new economy takes hold, the old rules for retail are out. They've been replaced by a market that is largely dominated by online shopping, experience-oriented retail centers, luxury-seeking tourists and investors who all want a piece of the triple-net pie…even if those "pieces" look more like crumbs. Orange County's Retail Rebound INSIDE THIS ISSUE page 42 France Media is committed to bringing our readers unlimited content through our various delivery channels: you can count on us to deliver the who, what, when, where, why and how much of commercial real estate from coast to coast. M i l w a u k e e ' s G r e o o d F i g h t C o n t p a g e N S I D E T H I S T e n y e a r s i n t h e m a k i n g , R o o k - w o o d E x c h a n g e , t h e $ 1 2 5 m i l l i o n e n c o r e t o t h e J e f f r e y R . A n d e r s o n R e a l E s t a t e ' s R o o k w o o d d e v e l o p m e n t s i g h t - s t o r y , 2 3 0 , 0 y r a l b u s i n e s s d i c t s n e a r i n g c a v e c r e a t e d a l F i l l i n g a v o i d W h o l e F o o d s n d o r g a n i c f o o p e n a 2 1 , 6 5 0 - s q r o i t o n J u n e 5 . t o r e , l o c a t e d a o h n R . R o a d i U R g E t s a n d a p M F o I N i n N o r w o o d , a m i d t o w n s u b u r b o f C i n c i n n a t i , i s n e a r i n g c o m p l e t i o n . T h e 1 2 - a c r e , m i x e d - u s e p r o j e c t i s s l a t e d f o r a g r a n d o p e n i n g i n 2 0 1 4 . A l t h o u g h J e f f r e y R . A n d e r s o n R e a l E s t a t e ' s v i s i o n f o r R o o k w o o d E x - c h a n g e b e g a n a s e a r l y a s 2 0 0 3 , t h e c o m p a n y d i d n ' t b r e a k g r o u n d u n t i l 2 0 1 1 . T h e m i x e d - u s e d e v e l o p m e n t o f - f e r s a w o r k - l i v e - p l a y e n v i r o n m e n t a n d f e a t u r e s a m u l t i - s t o r y , C l a s s A o f f c e b u i l d i n g , t w o n e w - t o - m a r k e t r e s t a u - r a n t s ( S e a s o n s 5 2 & C a p i t a l G r i l l e ) , a h e a l t h c l u b , a 7 5 0 - c a r p a r k i n g g a r a g e a n d a 1 2 3 - r o o m C o u r t y a r d b y M a r r i o t t H o t e l . " E v e r y b o d y l i k e s t o h a r p o n t h e i d e a o f l i v e , w o r k a n d p l a y , b u t w h a t t h e T h e f o c a l p o i n t o f R o o k w o o d E x c h a n g e i s a n e i t h a t i s c u r r e n t l y u n d e r c o n s t r u c t i o n . s e e R O O K W O O D , p a g e 3 6 E v e r s i n c e s h e m o v e d t o t h e c i t y o f D e t r o i t 1 3 y e a r s a g o , O l g a S t e l l a h a s c l o s e l y o b s e r v e d t h e p r o s - p e r i t y e n j o y e d b y r e t a i l e r s a n d r e s t a u - r a n t s t h a t b r i n g t h e i r " A g a m e " t o t h e m a r k e t . " E v e r y r e t a i l e r t h a t h a s d e l i v - e r e d a h i g h - q u a l i t y p r o d u c t — e i t h e r a w e l l - c u r a t e d s h o p w i t h b e a u t i f u l w i n - d o w d i s p l a y s a n d g o o d p r o d u c t , o r a r e s t a u r a n t t h a t h a s w o n d e r f u l f o o d a n d a g r e a t a m b i e n c e — d o e s v e r y , v e r y w e l l i n D e t r o i t . " S t e l l a i s n o t o n l y a c i t y r e s i d e n t . S h e a l s o h a p p e n s t o b e t h e b u s i n e s s d e - v e l o p m e n t m a n a g e r f o r t h e D e t r o i t E c o n o m i c G r o w t h C o r p . F r o m 2 0 0 9 t h r o u g h 2 0 1 2 , t h e p r i v a t e , n o n p r o f t o r g a n i z a t i o n f a c i l i t a t e d t h e c r e a t i o n o f 2 5 , 0 0 0 j o b s a n d $ 2 . 1 b i l l i o n o f i n v e s t - m e n t i n t h e c i t y . W h i l e m u c h m e d i a a t t e n t i o n h a s u n - d e r s t a n d a b l y f o c u s e d o n t h e g r o w i n g r e a l e s t a t e e m p i r e o f Q u i c k e n L o a n s f o u n d e r D a n G i l b e r t i n t h e c i t y ' s c e n - t r e c h a F a n o p t r s t J o d o w N T o w N d E T R o i T R E S U T h e c i t y ' s g r o w i n g w o r k f o r c e s p a w n s r e t a i l , r e s t a u r a n t B y M a t t V a l l e y

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