Shopping Center Business is the leading monthly business magazine for the retail real estate industry.
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SHOPCORE 138 • SHOPPING CENTER BUSINESS • December 2016 MASS MARKETS Part of ShopCore's new focus will in- clude supporting its existing markets. The company maintains a solid presence in California, Texas, New York, Florida and Pennsylvania, among other states. Petherbridge notes ShopCore has an af- finity for densely populated regions, with an active presence in Philadelphia, New York City, Los Angeles, San Diego, Dallas and Houston. "Population and density matters," he says. "Those are the keys. Population den- sity limits you to the top 40 MSAs [metro- politan statistical area]. You don't have to be in the top two to five MSAs, but maybe in the top 15. It's hard to make money if you're not in one of the top 40 MSAs. It really thins out after that." Petherbridge notes this strategy has led ShopCore to increasingly invest over time in Florida, Boston, the Carolinas and even New Hampshire. He's also closely follow- ing the retail markets in Portland, Oregon, Seattle and Phoenix, where the company currently owns The Promenade. Though much of ShopCore's presence may seem to lie on the periphery of the U.S., in- cluding the two coasts and Texas, Peth- erbridge does not rule out a larger push in the Midwest. The company currently only has one holding in that region, the Streets of Woodfield shopping center in Schaumburg, Illinois. "When I think about the middle of the country, I'm a big believer in the Midwest," says Petherbridge, a native of Australia who was based in a suburb of Cleveland, Ohio, while he was with DDR, but now calls Chicago home. "I think select mar- kets like Chicago and Minneapolis would make sense for us. We really want to find the highest quality locations where we believe retailers of all types will do well." Retailers like Ross Dress for Less, Pub- lix and Dick's Sporting Goods may be some of ShopCore's biggest tenants, but Petherbridge is quick to point out that the firm wants to see local mom-and-pops, as well as rising retail stars, succeed just as much as these national giants. "We're trying to find locations where we believe retailers will thrive," he contin- ues. "It's not just the Targets, Walmarts and T.J. Maxx's that we want to see do well. We want locations where the mom- and-pops can do well." WANTED: NEEDS One of the ways ShopCore is providing support to its mom and pops is by ensur- ing they're surrounded by strong, comple- mentary tenants that can drive business through their doors. The firm has placed a large emphasis on value and needs-based retailers, something Petherbridge refers to as necessity-based value. "Ross is a very good example of where the consumer is moving," Petherbridge says. "Value continues to remain a very key focus. Those tenants that are growing very quickly — Ross, T.J. Maxx, Burlington Coat Factory — do an extraordinary job. We're very optimistic about that specific segment of the market, and we're confi- dent in their growth trajectory." Petherbridge notes he has a specific affinity for T.J. Maxx's parent company, TJX Companies, thanks to its other off- price apparel and discount home fur- nishing stores that can sometimes feel more like local small businesses. These include Marshalls, Sierra Trading Post and HomeGoods. Petherbridge is also a firm believer in grocery anchors, with a specific emphasis on specialty grocers. "Grocers clearly remain a very active segment of the market," he explains. "We're starting to see a significant num- ber of specialty brands, whether Trader Joe's, Whole Foods and 365 by Whole Foods, Sprouts, The Fresh Market or Fresh Thyme, adding a necessity base to centers. They remain a key component to any center, and they allow the daily users to swing by more frequently." The healthy attitude taken by many of the above-mentioned specialty grocers is a trend that has extended into oth- er shopping center tenants as well, as Petherbridge has witnessed. This encom- passes everything from vitamin stores to chef-driven, locally sourced healthy cui- sine and even fitness studios. As with the grocers, Petherbridge is now seeing more local health-oriented concepts gaining steam and growing nationally. The Scottsdale Promenade in Arizona is occupied by Nordstrom Rack and Michaels Arts and Crafts. The Shops at SkyView Center in Queens, New York, is home to tenants including Bed Bath & Beyond, Target, Best Buy, Marshalls, Old Navy and Nordstrom Rack.