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jerryking : anchor_tenants   5

European Mall Landlords Coping With Online Competition Better Than U.S. Owners - WSJ
Sept. 5, 2017 | WSJ | By Esther Fung.

Malls need to shift emphasis away from department stores and toward retailers that are less susceptible to competition from e-commerce........On average, department stores still occupy about 50% of the gross leasable area of shopping malls in the U.S., while similarly beleaguered apparel and accessory retailers take an additional 29%, said the CBRE report. Retail sectors that are growing, include restaurants, beauty and home furnishings, account for only a small percentage of the typical mall.

The traditional mall model, developed seven decades ago, is heavily dependent on categories that are no longer fast-growing or meeting today’s consumer demands,.....“Converting malls’ tenant bases to include more of the categories that in-person shoppers now favor won’t be an easy or quick fix,” ..... “But it is a necessary evolution for the mall industry to maintain its place as a cornerstone of American retail.”

One of potential obstacles is getting the buy-in of department stores, which usually hold contracts that hinder major changes to malls without their consent.

“Many department store chains gradually have become more accepting of change, but it isn’t a given. Those who reject change may do so at their own peril: There is a growing trend of mall owners buying out department store leases and redeveloping the space into restaurants and specialty stores,”
redevelopments  shopping_malls  landlords  Europe  restaurants  anchor_tenants  department_stores  CBRE 
september 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
The Internet Isn’t Killing Shopping Malls—Other Malls Are - WSJ
By Esther Fung
April 18, 2017

One common hallmark of a dead or dying mall is the closure of an anchor store. When that happened, fewer customers tended to visit, resulting in more store closures, which led to even fewer shoppers, and so on......Landlords have grappled with numerous threats over the years. Two decades ago, Blockbuster was eating into the revenue of movie chains, while big-box stores were battering smaller stand-alone retailers, noted Sandler O’Neill Partners analysts in a recent report.

This time, factors such as consumers being more thoughtful about their purchases after the recession, the overbuilding of retail centers and retailers’ focus on investing in more online shopping channels are pressuring mall landlords.

Property owners generally try to court trendier brands and avoid outdated retailers. In recent years, they have started shaking up their tenant mix more radically, moving away from full-price apparel brands and toward entertainment and food offerings.

That is resulting in a more dramatic separation of the strongest and weakest malls, with top-tier malls in cities with strong population and income growth receiving more investment and weaker malls suffering from neglect.
shopping_malls  competition  e-commerce  landlords  commercial_real_estate  retailers  anchor_tenants  top-tier 
april 2017 by jerryking
Mall makeover: A new retail fight heats up - The Globe and Mail
TARA PERKINS AND MARINA STRAUSS Jan. 28 2014,

"I said to him, 'Look, you're missing an amazing opportunity,' " Mr. Sullivan recalls. "'We have a mall [the Eaton Centre] that has 50 million people a year walk through it. We are going to announce that we've got a Nordstrom deal shortly. And you have a great store at the other end, the Bay, which you've done a terrific job re-engineering. Why don't you think about putting a Saks in as part of that?....Dramatic changes in the retail landscape are providing a wake-up call for mall landlords, prompting them to replace tired retailers with new ones and leading Cadillac Fairview to launch a makeover of its Eaton Centre. There has been an influx of savvy foreign retailers, and every mall wants to be the first to attract the next big brand that migrates to Canada....."The ultimate goal is to have the right mix of anchors and small shops such that you maximize traffic, you maximize sales, and everyone wins."
Cadillac_Fairview  shopping_malls  HBC  Saks  Nordstrom  Marina_Strauss  retailers  product_launches  makeovers  anchor_tenants  store_within_a_store  luxury  landlords 
january 2014 by jerryking
Big-box competition forces malls to shape up - The Globe and Mail
Aug. 23, 2010 | Globe & Mail | by Sarah Boesveld.

Everyone in retail knows the customer is king. But malls that are shedding tenants have likely lost sight of the people they need to attract.

These malls must look far beyond current shoppers and target the ideal customer, says Mark Healy, partner at Satov Consultants, a Toronto-based management consultancy. Promoting cross-shopping - with a solid mix of retail that includes fashion, pharmacy, music, shoes and so on - can help attract families that may have fatter wallets than the senior citizens and teenagers who might be the more frequent customers as the mall declines, ......"It was 'Let's re-conceptualize what the mall is: Not simply a shopping destination, but a community hub.'" Enticing local physicians, community programs or the municipality to open offices in the mall can almost guarantee a boost in foot traffic, Mr. Healy says. "Look at everything from church groups to minor league soccer to parades and say, 'How do you leverage the mall as an anchor place?'"

Paired with a good mix of stores, it's a great way to get soccer moms roaming the malls when they pick up and drop off their kids, he adds. But the "mall as community hub" is more than just a strategy to drive traffic, he says. It gives the place an identity and builds a connection with shoppers, one that can be further forged if you try to weave local entrepreneurs into the mix of higher profile retailers,
anchor_tenants  big-box  cross-shopping  foot_traffic  reconceptualization  retailers  shopping_malls 
august 2010 by jerryking

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