recentpopularlog in

jerryking : reits   10

Why traditional retail hasn’t hit rock bottom — yet
October 4, 2017 | The Globe and Mail | ERIC REGULY.
.....it's fashionable—and not wrong—to blame Amazon for most of the retailers' woes, other factors, from stale retail formats to the new anti-stuff movement, are at play too. Put together, the financial and cultural forces battering the retailers seem relentless.

The outlook is so grim that Bespoke Investment Group of Harrison, New York, invented a "Death by Amazon" list of 54 retail stocks that it thought would get whacked by Amazon and other forces conspiring against the sector......Traditional retailing, of course, is not entirely doomed because only the brave or bone-headed would buy some expensive items—diamond earrings, high-end suits, musical instruments, mattresses, Persian carpets, prescription sunglasses—without hands-on examination. And some shoppers, me among them, like the pleasure of propping up independent stores that sell high-quality goods.

But I don't shop much for general merchandise any more, because I am sick of clutter and, with university fees for my kids, don't have the spending power for non-essential items..... blamed shifting consumption patterns for much of the old-style retailers' distress........ blamed shifting consumption patterns for much of the old-style retailers' distress...money spent on smartphones and wireless services is unavailable to be spent on T-shirts and shoes.....middle-class incomes have stagnated, healthcare costs have climbed, and highly leveraged consumers are more interested in paying off debt than buying new TVs. Something had to give, and it was the department stores, whose shares are down by 40% or more in the last year or so (Macy's, J.C. Penney)......Amazon's endless virtual aisles sells Fiat cars in Italy, Nike shoes and and Sears' Kenmore appliances. Amazon recently bought Whole Foods and dropped its prices, which put the mainstream supermarkets into a panic........ 55% of product searches start on Amazon, far more than the 28% that start on search engines. The popularity of Amazon Prime (which provides free, two-day delivery as well as TV and movie video streaming) and the construction of massive warehouses have accelerated its growth. .....captures an estimated 40% of every shopping dollar spent online and is already the second-biggest apparel seller in the U.S., behind Wal-Mart. No wonder the traditional retail sector is in free fall.
And here's another question: As traditional retailers weaken or go out of business, and anchor stores disappear from North America's crazily over-malled shopping geography, can the real estate investment trusts be far behind? Betting against Amazon seems a fool's game.......
Eric_Reguly  retailers  decline  bricks-and-mortar  shifting_tastes  Amazon  REITs  shopping_malls  bankruptcies  department_stores  seismic_shifts  high-quality 
october 2017 by jerryking
Diversification key for mall developers as retail landscape evolves
Feb. 7, 2017 | Retail Dive | by Kenneth A. Rosen and Eric S. Chafetz.

Traditional anchors like Sears/Kmart and Macy’s are beset by competition from all sides, from freestanding big-box outlets (think Home Depot and Bed Bath & Beyond), to stores attracting fashion-forward yet price-conscious consumers (Target and Kohl’s) to mounting online competition from Amazon and others.

This is leading to the loss of mall tenants, especially anchor tenants, which are major drivers of all-important foot traffic.....Mall owners are (or should be) rethinking the very definition of a mall. New tenants such as high-end restaurants, amusement parks, spas, health clubs, online pickup locations at traditional retailers and upscale movie theaters increasingly are essential components........Reshaping malls into mixed-used developments might run counter to a business model that worked for decades, where mall owners and developers could simply be mall owners and developers. However, these entities must realize that the need for new thinking and investment in new types of amenities and features is greater than ever to drive foot traffic......Technology is also key, with some mall owners now allowing customers to text them questions and get real-time answers. Other malls have implemented mobile apps to provide turn-by-turn navigation from store-to-store in a mall and directions to their parked cars. ........Consider a successful shopping center developer, in this case seeking opportunities for growth. The developer might look to acquire store leases at malls owned by competitors where an anchor has closed and redevelop the space into a cluster of smaller stores or into a mixed-use property (restaurants, movie theaters, urgent care centers, spas, etc.)......The transformation of malls will continue, and usher in changes that would have been unfathomable a decade ago. Last year, two mall owners — Simon Properties and General Growth Partners — teamed up with Authentic Brands and a few inventory liquidators to purchase hundreds of Aeropostale stores out of bankruptcy. The justification from the mall owners was that they were not merely trying to save a tenant, but based on the bargain basement price that they paid, believed they could make a profit. As 2017 unfolds with the expectation of additional retail Chapter 11s and store closures, mall developers and owners also may look at their competitors with an eye toward new opportunities.
diversification  redevelopments  shopping_malls  REITs  department_stores  big-box  cost-consciousness  e-commerce  Amazon  foot_traffic  reinvention  competitive_landscape  mapping  retailers  store_closings  offensive_tactics  transformational 
august 2017 by jerryking
Mall REITs: 1Q17 Recap & 2Q17 Preview - Thasos Group
Key Conclusions

Most REITs operating malls classified as high quality Class A by Green Street Advisors have negative YoY foot traffic on a rolling quarterly basis through May 2017:
Simon Property Group (SPG): -5.4%
General Growth Partners (GGP): -5.7%
Taubman Centers (TCO): -6.2%
High-tech stores such as Apple, Microsoft, and Tesla have no effect in preventing declining traffic.
Malls with destination restaurants such as Cheesecake Factory and P.F. Chang’s underperform by 3.5%.
Malls with high-end department store anchors such as Nordstrom and Macy’s underperform by 3%.
Malls and strip centers with grocery stores and consumer staples outperform by 5%.
location_based_services  shopping_malls  REITs  insights  Thasos  outperformance 
july 2017 by jerryking
Chinks emerge in the armour of prized malls
22 July/23 July 2017 | Financial Times | Miles Johnson.

A defining feature of the financial crisis was a group of hedge funds making vast sums by wagering against supposedly AAA-rated mortgage debt well before markets imploded in 2008.

Now some believe a similar story will play out for US shopping malls — that the most risky investments will end up being those that investors now believe to be the safest. Central to their premise is the idea that too much faith may be being placed in a classification system used for shopping malls that is little known outside of the real estate sector.....investors are also actively leaving the office and conducting field research.

In April researchers from a large US hedge fund travelled to the outer boroughs of New York to a shopping mall that is home to Apple and Armani among other retailers....To their surprise the researchers quickly came across a pop-up shop selling cheaply manufactured stuffed teddy bears and plastic toys. Two months later the store had disappeared....
The stock market has until recently appeared to believe that prime “A” malls are largely insulated from the pain being felt across a US retail sector being shaken by e-commerce.

Shares in Washington Prime, an operator of lower quality B and C classed malls, are down by half since the start of 2015. However, until recently shares in “prime” mall operators Simon Property Group and GGP had held up, underpinned by the belief that their A-quality malls in prime locations were safe from the challenge of online shopping.......Yet there is growing evidence to suggest that these prime malls, which have been treated by investors and lenders alike as rock solid bets in the face of the internet headwinds, are not as protected as once thought.

Shares in Simon Property, the largest Reit in America with a market value of $50bn, are down by almost 30 per cent over the past 12 months, having held up strongly to the middle of 2016. Short interest in Simon, which tracks the amount of shares hedge funds have borrowed to bet that its value will fall, rose to the highest level since the financial crisis last month, with bets worth more than $1bn.....The hedge funds wagering against the highest quality malls believe that the wider market will come to believe these A-quality malls are far more similar to lesser ranked ones. “This idea that there are these magic malls in America that are immune to secular change is a myth,” the US-based hedge fund manager says.

Some argue that the market under-appreciates that A class mall operators and B and C class mall operators all have very similar tenant bases, in spite of being in different locations. L Brands, the owner of lingerie chain Victoria’s Secret, is the largest single tenant for prime operator GGP, according to company filings.....it is also the biggest tenant for the lesser ranked CBL and second largest for Washington Prime.....Russell Clark of Horseman Capital notes the vulnerability malls have to the loss of single big brands, known as anchor tenants, with their departure often triggering a wave of rent loss with other tenants.

“Many tenants have a clause in their lease to reduce rents should an anchor close a store. Thus, even though the loss of rent due to an anchor closing is minimal, the knock-on effect of reduced rents from the remaining tenants is a serious concern,” he noted.....the hunt for opportunities to bet against quality malls outside the US. The share prices of Intu Properties and Hammerson, the UK’s largest publicly listed shopping centre operators, have not yet followed the falls seen in the shares of their largest tenants.
shopping_malls  commercial_real_estate  real_estate  MappedIn  mapping  hedge_funds  primary_field_research  pop-ups  store_closings  pretense_of_knowledge  illusions  under_appreciated  retailers  vulnerabilities  anchor_tenants  REITs  L_Brands  A-class  B-class  C-class  Victoria's_Secret 
july 2017 by jerryking
Sears joins retail’s real estate push
Jun. 04 2013 | The Globe and Mail | MARINA STRAUSS - RETAILING REPORTER.

“Everyone is milking their real estate,” said Jack Klaiman, president at retail real estate adviser Oberfeld Snowcap. “This is the hidden asset. … It’s a smart move.”.... “Real estate has always been a valuable aspect of many businesses, particularly in retail,” he added. “This is the right development opportunity for us to pursue.”

Real estate is a hot commodity in retail as a growing array of foreign retailers look for sites here amid a dearth of locations. Retailers, including Nordstrom, are believed to be interested in some Sears sites, especially its flagship store at the Toronto Eaton Centre, where its head office also is located.
head_offices  commercial_real_estate  real_estate  Marina_Strauss  REITS  retailers  Loblaws  Canadian_Tire  hidden  Sears_Canada 
june 2013 by jerryking

Copy this bookmark:





to read