Reporting On Over 7,100 major Shopping Centers and Malls In the US and Canada

Announcement: Directory of Major Malls has just released its 2011 dataset and products focused on the over 7,100 major shopping centers and malls throughout the US and Canada. DMM products includes shopping center and mall locations, details, physical features, demographics, tenant lists, site/plans with contact details including name, addresses, emails and websites. Available online, in print, on CD and through licensed datasets.

NYACK, New York (January 20, 2011) - The Directory of Major Malls has already started shipping and providing online access to its 2011 data and products. An aggressive research effort taken on by the research team at Directory of Major Malls over the past 12 months propelled the inventory of detailed listings to over 7,100 major shopping center and mall records and 290,000 store locations. The addition of over 1,190 listings is a 20% increase and coverage of 3.3 billion square feet of major shopping center and mall retail space in the US and Canada.

An important point to highlight in the Directory of Major Malls coverage is the effort toward continuous coverage of major future and proposed retail projects. Over 450 planned/future shopping center and mall locations are included in the comprehensive 2011 Directory of Major Malls dataset. Coverage of these proposed centers totals out to over 248 million square feet of future retail space with an emphasis on the retail shopping centers classified as Lifestyle/Specialty/ Mixed-Use.

In addition to efforts to expand the coverage of listings for major shopping centers and mall with approximately 200,000 sqft of gross leasable retail area, the DMM team has further increased the level of inclusion of site/leasing plans as additional insight into the physical configuration of the centers. Currently almost 50% of the listings include a site/leasing plan image of a level of the shopping center.

Additionally the 54 full-color metro area maps, a mainstay of the DMM products, have been further enhanced to show Urbanized Area imaging within the highlighted metro market areas and the locations of over 2,600 of the major centers pinpointed on the maps. The longitude/latitude coordinates used to determine the locations of the centers are manually verified for these locations as well as the complete dataset of all listings in the Directory of Major Malls products. These coordinates are available as an add-on dataset in the Directory of Major Malls semi-annual CD release as well as within custom licensed dataset used for integration in third-party GIS/mapping and analytics applications.

Another supplemental dataset for the Directory of Major Malls products is the Trend Demographic add-on dataset creating in partnership with Scan/US of Santa Monica, CA. This add-on component is available as both searchable and informative data fields portraying the four trend variables for 5, 10 and 20 mile radii around each of the US shopping centers in the DMM database. Access to this valuable component is available within the recently redesigned online subscription site at http://shoppingcenters.com, the Directory on Computer CD releases as well as custom dataset licensing.

"With over 30 years of active participation in the industry as a dependable source, the Directory of Major Malls products continue as the leading source of this specialized data to the shopping center, retail and financial industries." said Publisher Tama J. Shor. "Our research team has continued to maintain the highest level of accuracy with our existing inventory of listings as well as continually increasing our coverage."

"In these turbulent times for the retail industry," she continues, "it's even more urgent that a source such as DMM is available to provide retail real estate professionals and the financial industry with accurate, current information. With monthly updates to our online subscription site, Directory of Major Malls on the Web and the semi-annual releases of our licensed datasets and CD product, we're doing just that. Our daily mission is to identify and capture the ongoing ownership and personnel changes, store openings and closings, along with any new and redevelopment project activities."

Shor continues, "30+ years ago when the Directory was first developed, it was at a time when major enclosed mall development was in the early stages and the focus of many retail projects. All this time, we've maintained ringside seats and have watched shopping centers grow and transform several times over. The diversity in the types of retail complexes that now comprise this dominant part of the retail community is just amazing."

"Each listing of the 7,100 included in the Directory of Major Malls products is comprised of a variety of details with regard to location, demographics, physical features, a categorized tenants list and contact details in the areas of development, leasing, marketing and management. At this point in time, our brand name is a bit misleading in the sense that well over 50% of our listings are not enclosed malls as our name portrays but in reality the majority of our major shopping center listings are open-air in design and fall into a variety of classifications such as community, power and lifestyle/specialty and value-retail centers," Shor pointed out. "There's also an increasing number of projects that are planned mixed-use communities that have included a relevant amount of retail space mixed in with residential, office, entertainment and hotel space," said Shor.

"We're quite proud of the achievements of our research team and the longevity of Directory of Major Malls as a significant source to the industry for such an extended period of time. Our customer base covers any and all professionals involved in some aspect of the shopping center industry whether it be retail leasing teams, financial investors, development and management sector as well as firms involved in research, design, promotion, marketing and supplier end of the industry. We'll continue to be a dependable resource and look forward to expanding our coverage and expanding our partnerships to increase the exposure of the DMM dataset as an important element for retail analysis." Shor added.

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Directory of Major Malls, Inc. is based in Nyack, NY. It continues to be the leading source of detailed information on the major enclosed malls, open-air shopping centers, and lifestyle/specialty centers for over 30 years. DMM is used by retail real estate professionals, development and management companies, brokers and financial investment firms, service and supply companies, and government and academic research institutes.

The 2011 products include over 7,100 major shopping center and mall listings, 290,000+ tenant location,3,300+ site/leasing plans, 54 full-color metro area maps and the portfolios of the Top 50 Owner/Developer and Management companies which control over 70% of the industry.

The Directory of Major Malls data is available in our suite of standard products including subscription based on-line and "pay per record" access, on a semi-annually released CD, a hard copy 2,300 page print directory and through individual dataset licensing and a network of resellers. Details of Directory of Major Malls may be found at www.shoppingcenters.com.

For further formation, contact : Tama J. Shor, Publisher at P.O. Box 837, Nyack, NY 10960, phone: (845) 348-7000, Ext. 200, or email: publisher@shoppingcenters.com

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Staying Ahead Of The Trends: Survival Of The Fittest

Since there are indications that the dealmaking is improving as retail sales increase--and experienced professionals in the industry require the best information to benefit from these positive signs, we are making available our blog to a Guest Columnist specializing in essential data.


By Tama Shor, Publisher of the Directory of Major Malls (guest columnist)

The Internet has completely changed the way we communicate, the way people do business, and the way the public is informed, while compelling businesses to listen to the demands of the consumer.
“Survival of the fittest” is a phrase that has far-reaching implications for most industries. Those that adapt and change their business models and marketing practices in line with changing trends and the effects of the Internet are those that by natural selection will survive. Those that don’t will die off. 

The Changing Retail Real Estate Landscape

We now live in a consumer-driven business world where instant and easy access to information is not only what consumers want – but what they expect. The increased volume of e-commerce sites is a perfect example of how consumer-driven our society has become. A consumer-driven e-Commerce model poses a potential threat to brick-and-mortar shopping centers, but it is possible to mitigate the potential losses to physical stores by modifying marketing and business models to accommodate the effects of these technological changes.

François Ortalo-Magné, Director of Wisconsin School of Business Global Real Estate, cites an example of a brand that is revising its business policies in light of the increased e-commerce site usage. He says:
'There are those companies like SFR who are radically re-educating their store staff so that they have the same level of product knowledge as the clients who come to the shop having surfed the web to find about products. There are those companies who see their flagship stores as communication tools. And there are those companies who haven’t yet decided what to do,' he added. (http://www.propertyeu.info/index-newsletter/retail-sector-split-on-impact-of-e-commerce/)

In addition to the trends leading to more e-commerce sites, the recession has also caused a shift in the retail real estate landscape.
What Does This Mean For The Retail Real Estate Market?
Because business today is information-driven, it is important to be able to acquire, access, and manage data in order to make timely decisions, take advantage of opportunities and/or avert disasters.

How and Why Vertical Markets Need to Stay Informed

In order for the vertical markets within the retail real estate market to stay in the game, they will need to have as much current and accurate data at their disposal to be able to make the wisest business decisions.
Retail chains and up and coming retailers need data that can help them locate and analyze new locations, review existing markets, and hone in on their competition. Specialty and seasonal retailers will benefit greatly from having the necessary data to help them identify major centers with seasonal and temporary leasing programs.

Owners/developers and management companies who build and manage shopping centers and malls need tools to help them analyze the tenant mix of other centers in their area, other locations of stores, and to track what companies oversee other major retail locations.

Financial institutions and investment companies managing stocks owning shopping centers need to react quickly to changes in the industry such as store chain closings and openings, the sale of portfolios of shopping centers and malls, new developments as well as properties affected by natural disasters and regional economic shifts. These investment portfolios are affected on a daily basis by the afore-mentioned activities making it all the more important for the financial and investment companies to have access to the most current and reliable data.

Some examples are: When a major department store chain files bankruptcy or a retailer decides to close all the locations of one of their chains, which centers are affected? Who owns these properties? How much of their property portfolio is affected by closings? What effect will that have on the overall stock value for both the landlord and the retail chain?

Suppliers and service companies who are involved in businesses like the sale of security uniforms, recycling services, energy management, stroller rentals, and gift card programs need to be able to identify and contact new prospects and sales leads at the individual centers, and evaluate the size of a company-based upon the number of listings they oversee.

Marketing and promotional companies who help businesses through publicity campaigns and advertising need a resource for marketing analysis and marketing contacts.

Architectural and design firms of the malls or stores who want to promote their services need to have information about other properties and retail locations.

Construction companies involved in the building and renovation of shopping centers/malls, stores, and parking lots, need to know about proposed centers and those under development as well as those planning a renovation or expansion.

What happens to those companies that are not paying attention to their industry’s changing trends? They will eventually lose out to their competitors who ARE utilizing marketing tools and current, relevant data to make better informed business decisions.

Staying true to our brand promise of maintaining the most comprehensive reference of major shopping centers and malls available anywhere in order to provide you with the most current details possible, we are pleased to announce the release of the 2011, 32nd edition of the Directory of Major Malls®. With over 7,000 detailed shopping center listings and 295,000 store locations, you will have access to the most accurate shopping center data available in order to find the locations you need and make the contacts you want. Pre-order your 2011 Print and CD versions for January.

Access 2011 data online today! The Directory's on-line access site is located at http://shoppingcenters.com. This interactive web site is efficient, easy-to-use, and updated monthly. A subscription to the site allows you to search and view our data (including live links to web addresses and emails) and view and print our site/leasing plans and metro area maps.

Customized reports, mailing lists and VIP contact files are available for downloading for an additional fee for both subscribers and guest accounts. Log on to http://shoppingcenters.com to create a Guest account and run a FREE query today.

Growth In Internet Sales May Impact On Leasing And Development, But Others See It As Another Challenge To Be Overcome

This column, Strolling the Agora, will continue to be written as the mood hits, even though Shopping Center Digest has ceased publication

By Murray Shor

At first glance, the fact that internet sales are booming should have a crushing impact on future dealmaking, already staggered by record-setting vacancies and lackluster leasing and development. This is despite the fact that many soothsayers are seeing signs on the horizon of improvement across-the-board-- and they expect positive holidays sales due in part to the early start of door-busters and deep discounting right after Thanksgiving Day celebrations.

First the hard facts. E-commerce spending is expected to jump 13.7% this quarter up to $51.4 billion. Certainly for many consumers and for many types of merchandise, there are distinct advantages over buying at the store.

The shift from brick-and-mortar to the internet by shoppers, according to some analysts, is to avoid the hassles of crowded malls, long waits, lines at the checkouts, and battling others for very popular “hot items,” the early AM or late-night hours for “special deals,” and the increased stress of limited “deep discount” merchandise in high-demand.

And, they point out, many of these deals are available only on the internet, top retailers are offering free shipping to home or convenient store locations, and free shipping for returned merchandise.

Though many retailers are predicting record sales at the stores beginning late Thanksgiving Day, as many consumers are opting out of battling Black Friday frenzy in favor of hitting their keypads and picking up the deals without stirring out of their homes.

And then, others point to the latest technology being used to drive customers to the stores. “Top retailers like Target, Toys ‘R’ Us, for example, are using new apps on Iphones that enable savvy shoppers to download coupons and sales flyers that are redeemed in the stores,” said one consultant. “It’s all about using every vehicle available to sell merchandise”

To some dealmakers in the industry, the opposing effort to enable customers to shop from home and avoid the stores, could hamper future leasing efforts by reducing the need for brick-and-mortar outlets.

Different Approach

However, one seasoned veteran takes a different approach. “We are so deep into the fecal quagmire which is our current and ongoing economy that it’s impossible to isolate any one factor as an impacting reason for a hit on sales.”

He pointed out that he is currently leasing “a well-located strip center adjoining a new Walmart Supercenter…and a forecast of growing e-commerce will not change my leasing efforts.”

Another leasing executive stressed that “we are constantly improving our language in the lease terms. We had a problem involving overages, for example,” she explained, “where some retailers were deducting from store sales merchandise bought over the internet that were returned to a local store. So we’re defining and refining this area.”

One leading broker in the Mid-Atlantic region said he’s already seen an increase in retail deals over the last month or so. “Granted,” he said, “we’re talking of a small number, but when there had been almost zero deals before, even a little uptick in the last quarter—and compared with last year—is a sign for joy.”

One landlord expanded on the problems of definition in a lease clause when it comes to defining and apportioning online sales. “If we grant any tenant the right to terminate a lease because of tenant’s inability to exceed a particular sales threshold, we require that the definition of ‘sales’ includes online revenue derived from zipcodes.”

Optimistic Future

“Yep, we’ve been going through the toughest period I’ve ever seen in some 40 years,” said one West Coast leasing rep. “But I’ve also been hitting a few dealmaking events around the country and there is a growing optimism for the future of this industry.

“You can’t deny there is an impact from online retailing. But even the strongest proponents of e-commerce admit that there’s no replacement for getting the customer into a store, having the opportunity to take advantage of impulse buying, of the advantages of touching the merchandise, trying it on, instant gratification. You’re never going to get this same impact from a computer and 2-dimensional pictures.”

A New York-based owner with close to 100 neighborhood centers around the country, who has recently acquired several properties, was extremely upbeat on mainstream shopping. “We’re constantly in a state of flux. One period we were all rushing to the suburbs, now there’s a trend to in-fill closer to main population centers, and even into the CBDs of cities. I look at the demographics and the projections showing steep growth, and I can’t see but a strong demand for more stores and centers—once we get out of the economic slump and the high unemployment. Internet sales, just another challenge that we can and will cope with.”

To Reach New Customers, Discount, Outlet And Off-Price Retailers May Soon Be Expanding Their Criteria To Make Deals

This column, Strolling the Agora, will continue to be written as the mood hits, even though Shopping Center Digest has ceased publication

By Murray Shor

Just two months ago we highlighted the trend of more luxury retailers seeking cost-conscious shoppers by looking for stores in areas and locations they once avoided, the outlet shopping centers, and secondary and tertiary markets.

And we stressed that this relatively minor niche of less than 220 projects, by some estimates, is dwarfed by the number of over 100,000 mainstream malls and centers that encompass the shopping center/retail chain world of the US and Canada. To make an impact in this market, retailers must deal with the two main landlords responsible for the bulk of these centers: Simon Property Group with its Chelsea division and Tanger Factory Outlets.

Yet a new approach being taken by one of the poshiest of merchandisers, Neiman Marcus, has the potential to bring this type of retailer into almost every local market available. It could expand opportunities even to every deal-hungry broker in the field.

First, what Neiman Marcus is doing. It is starting a new spinoff of outlet stores to be called Last Call Studio with lower-priced merchandise that never was being sold in its Last Call outlet stores. This outlet merchandise may still be too expensive for many customers. So, the Studio stores will carry clearance goods from its mainstream stores, namebrand apparel, and lower-end merchandise ordered from vendors specifically for these units.

The first protoype store—about half the size of a more traditional unit-- opened recently in Dallas, with others in Rockville, MD, and Paramus, NJ.

Possible Locations

Targeted as possible locations for this division will be suburban areas and strip centers, storefronts, possibly even vacant downtown locations that could never attract luxury retailers because the numbers never added up. However, with high-end shoppers heading for the outlets and discounters—which may still carry too high a ticket for many moderate households—and the reduced clearance merchandise and inventory available from many liquidators and vendors who have cut back on manufacturing, there is pressure to find customers willing to spend limited income for quality merchandise with a high-end label.

As one highly-regarded consultant stressed: “From a modest out-of-sight, out-of-mind liquidation tool, it has now really morphed into a strategic and financial necessity for these companies.”

Another maven pointed to the recession and the insistence by shoppers for even more value-oriented merchandise.

Other luxury retailers, such as Nordstrom, Saks 5th Ave, Lord & Taylor, Bloomingdale’s, and the like, have been operating outlet stores for years, or have recently entered this market.

Great Potential

“Looking at the decision by Neiman Marcus to follow the consumer to where she lives—rather than wait for her to drive an hour or so and make a day of outlet shopping,” one leading broker pointed out, “opens up a great potential for dealmaking. Many brokers have specialized in finding tenants for Moms and Pops, for local operators within a limited market to fill vacancies in very local strip centers. They may never have made a call on a luxury retailer.

“Now, suddenly,” he continued, “it’s a whole new ballgame. If other leading retailers decide to give it a try, the potential number of tenants that can be approached increases exponentially.”

No question, the number of vacancies have been increasing across the board due to the closings of many stores by stressed retailers, and the cutback on expansion by many others as a reaction to the high unemployment and pessimism of consumers. Though it may not be a deluge by healthy apparel chains seeking locations, there is the potential.

“And isn’t this,” said one senior real estate officer, “what drives many dealmakers? The potential.”

Other Interesting Activity

Joe’s Jeans, based in Commerce, CA, says it wants to expand its outlets division, now with 14 stores, in addition to its full-price stores. Contact CEO Marc Crossman.
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General Growth Properties has appointed hedge fund manager William Ackman to become its chairman when it emerges from bankruptcy next month. It is being split into two units; GGP will retain about 185 malls, the Howard Hughes Corp will consist of the master-planned communities and other non-income-producing properties.
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Walmart says it plans to grow its total square footage by between 3 and 4% during the fiscal year, adding up to about 35 million sq. ft. of new stores. It expects its sales growth in 2012 to grow 4-6%.

Higher Vacancies May Be Hurting The Landlords, But It Is Also A Great Dealmaking Opportunity For Discounters And Off-Pricers

This column, Strolling the Agora, will continue to be written as the mood hits, even though Shopping Center Digest has ceased publication.

By Murray Shor

Considering the stubborn, low level of consumer confidence caused by the continuing high unemployment rate, it is no surprise that vacancies have been increasing all around the country, and that some retailers are focusing on Canada where there is a more positive emergence from the recession.

However, selective dealmaking is picking up here in the US in disparate locations as a result of the depressing numbers. Especially for brokers in prime metro areas, the opportunities are there.

First the bad news: According to the market research company Reis Inc, which tracks these data, the vacancy rate at shopping centers in the last quarter rose to 10.9%, the highest level since ’91, and closing in on the record 11.1% set the year before. The rent asked by landlords dropped almost 20 cents per sq. ft. to $19.07, but the effective rents are even lower, $16.58.

For the larger malls, where average rents are hovering around $38, vacancies rose only .2% to 8.6%, down from 9% the previous quarter.

Now The Good News

O.K., now the good news. With the cutbacks from high-end and full-price retailers—who are the foundation of fashion-oriented malls and the CBDs of major cities—there is an accelerated push from the discounters and off-price retailers: TJMaxx, Target, Nordstrom Rack, Syms and its recently acquired Filene’s Basement (now called fbSY), H&M, Century 21. According to one dealmaker “They consider this a great opportunity for discount deals in prime locations they could never afford before, and to reach affluent consumers who shunned them in the past.”

A prime example, of course, is Wal-Mart Stores, which will be opening dozens of smaller units of 30-60,000 sq. ft. in cities around the country, eventually rolling out the concept of focusing on food and consumer basics to hundreds of these units. And then, who knows?

These promotional tenants have greater access than ever before to luxury- and designer-branded merchandise because vendors have excess inventory and limited outlets for distribution. One estimate is that the number of top designers now selling to TJX Companies has jumped 25%. The off-pricers and discounters, therefore, are buying this top-quality merchandise, and using it to draw in customers in new stores along New York’s Fifth Avenue—and even Harlem—Chicago’s Miracle Mile, Beverly Hills, and maybe even Rodeo Drive. Certainly in the plushier malls in Las Vegas, they’ve been operating for some time now.

Educating The Affluent

These merchandisers are educating their new, fashion- and trend-oriented customers that they can continue to buy quality and at a cheaper price, and strengthen customer loyalty for the future, when the economy—hopefully—returns to what we consider normal. In the meantime, they have locked-in prime real estate at discounted prices—though they may be paying some of the highest rents they have ever paid before--and helped tear down the old barriers blocked them from locating in the A and A+ plus malls, or fashionable locations in some of the most prime urban centers. Though they much prefer long-term deals, in some instances they are willing to settle for six months, with options and some built-in increases.

These stores could be considered “pop ups”, which are becoming a more common trend.

As we’ve pointed out several times in the past, these locations are becoming more common, and the type of deal that appeals to both landlord and tenant. For the landlord, it provides a rent-paying tenant in a vacant store, that can be converted to a long-term tenant, either this retailer or another, perhaps even a competing merchant, at the expiration of the short-term lease. For the tenant, an inexpensive way to test a new concept, polish and refine the presentation, and react to feedback from customers before rolling it out in a mass expansion. Or kill the concept before it does too much damage.

And, of course, they are ideal for retailers that can exploit special events or holidays: Halloween, Back To School, Presidents Day, etc.


Other Interesting Activity

Dollar Tree says it will buy Canadian retailer Dollar Giant for about C$52 million, adding 85 units to its 3,961 stores in 48 states. VP of leasing is Todd B. Littler, (757) 321-5283, tlittler@dollartree.com .
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GNC Acquisition Holdings is planning an IPO to raise some $350 million to add about 4,800 company-owned and franchised vitamin and herbal supplement shops; future plans are to expand to China. The Pittsburgh-based chain’s website is www.gnc.com , 1-800-766-7099.
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Loblaw Companies is launching The Mobile Shop in more than 500 of its supermarkets across Canada in a bid to become a major retailer of mobile phones. Contact Maria Forlini, VP-Telecom, (905) 459-2500, www.loblaw.ca .
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Gymboree Corp, which operates some 650 children’s apparel stores, has accepted a bid to be acquired by Bain Capital for $65.40 per share, or about $1.8 billion. Director of real estate is Kathleen Hinkley, (415) 278-7993, Email: Kathy Hinkley@gymboree.com .
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Investors are being drawn to a number of real estate investment trusts that are outperforming most stock market offerings, especially those involved in shopping malls, office building and apartment buildings. In our industry, the top performer is Taubman Centers Inc, which during the third quarter returned 18.5%.

Is There A Trend For Supermarkets To Become Regular Tenants In A Regional Mall? Don't You Believe It

This column, Strolling the Agora, will continue to be written as the mood hits even though Shopping Center Digest has ceased publication

By Murray Shor

Been hearing a little rumble here and there about supermarkets becoming important tenants in regional malls, taking advantage of the large number of big-box vacancies available and seeing that as an opportunity to expand their base. Don’t you believe it.

I don’t doubt that in some isolated instances it could happen, such as discounter Aldi now
taking several locations in the Chicago market. Nor do I dispute that some surveys report those in a trade area may put a supermarket high on their list of tenants they’d like to see in their neighborhood mall.

However, what people say is not what people generally do, especially when answering a survey. But, go on to reality.

First, people shopping for their weekly groceries are not going to push a shopping cart loaded with perishables such as meats, frozen foods, milk and butter through a mall while checking out the latest fashions at Victoria Secrets or Ann Taylor. Nor would any of these stores want a customer browsing through the racks with a cart of melting ice cream.

And maneuvering those carts up an escalator?

Little Cross-Shopping

Result: There would be very little cross-shopping—even if the mindset were there. Supermarket shopping is a chore; mall cruising and browsing, entertainment—except, maybe during the stressful holiday seasons. Just one minor reason mall landlords may not welcome these tenants with open arms.

Now get into the logistics, for a moment—and the high value placed mall management places on parking spaces, especially those nearest to store access and the main entrances to the main mall. Supermarkets require heavy traffic, and their customers require substantially more parking spaces than those normally shopping at a mall; the distance between the car and store has to be substantially shorter. Question: Know anyone willing to push a loaded cart 200 yards to a parked car?

Then comes the large number of 18-wheelers coming in to replenish a supermarket
on a daily basis; this traffic is much heavier than similar vehicles replenishing merchandise for other tenants because some stock turns at foodstores go into double-digits; some departments require daily replenishment. These vehicles have to be kept away from the large numbers of personal SUVs; the result is a completely different and more demanding traffic pattern.

Those adherents saying it’s a good idea for this type of tenant to head for the malls point to some of the big-box discounters, warehouse clubs, and other promotional merchants carrying groceries who are already common in malls—Target, CostCo, Walmart, BJ’s, and the like. Yes, they carry groceries among their merchandise, but not a full-line of products: meats, fresh fish, frozen foods, produce, etc., etc.

It’s true that some of these big-box users are attached to the mall, but many of them do not have direct access, and their parking spaces essentially just serves their stores. In this situation, a supermarket could be a likely candidate to take the space.

We’re talking here, however, of a supermarket being an integral part of the mall, rather than an add-on.

How It Can Work

Supermarket operators are not known for paying high rents. The average mall rent paid across the nation for non-anchor tenants is around $38 per sq. ft. And to this add one-third to cover the CAM charges and other ad-ons—another item supermarketers are not known to contribute to without complaint. If you know a supermarket chain willing to pay those dollars, lemme know and I have a number of great mall locations they should look at.

No way these experienced, tight-fisted operators would agree to these expenses, and whatever else may be included in the Reciprocal Easement Agreements made between the owner-developer and the department store anchors.

Landlords do understand supermarket customers hit their shopping centers on a weekly basis, much more frequently than they would if it were a regional mall. So they’d like to build on this loyalty to place and bring the customer to their properties more frequently. This is why many malls have a separate, service-oriented strip center next to their major malls, and containing a supermarket, maybe a liquor store, barber shop/beauty parlor/nail salon, stationery store, dry cleaner, and the like.

Separate access, but visible, lower rental and operating costs than locating in a mall, less hassle for shopper merchant and landlord, and a win-win for all concerned.
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Other Interesting Activity

American Theatre Corp and Cinema Grille are looking for big-box vacancies in shopping centers that are suitable for theatre use. Contact David Postle, depostle@msn.com .
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Doctors Express, a health-clinic franchise based in Towson, MD, recently made some 74 franchise agreements in 21 states and expects to have 35 operating by year-end. A visit to a hospital’s Emergency Room costs about $575; at DE’s urgent-care centers, the cost is about $125.

Sites are being sought mainly in community and neighborhood centers. Contact Jennifer Watson, Baum Realty Group, Jennifer@baumrealtygroup.com .

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JC Penney Co says its new-store expansion over the next five years will be targeting mall and off-mall locations, and expects to boost its sales by $1 billion over the next five years. It had opened about 150 of these units before the recession hit, and has an ongoing program to complete renovations of about 400 units by the year 2014.

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General Growth Properties will no longer have a member of the founding family, the Bucksbaums, since brothers Martin and Matthew built their first center in their home town of Cedar Rapids. Those running the bankrupt development company chose not to give Chief Executive John Bucksbaum a seat on either of the two new boards being created; the reason given is that he failed to inform them that the family trust failed to inform them of the $100 million of loans made by the family trust to two GGP executives to cover margin calls on their company stock.

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More information on Expanding Retailers, Directory of Major Malls, and products that can improve your dealmaking, marketing, and operations may be obtained from our website, www.shoppingcenters.com .

After 37 Years Of Focusing On New Developments And Expansion In The Industry, Shopping Center Digest Suspends Publication

This column of Strolling the Agora appears in the September 27, 2010 issue of SHOPPING CENTER DIGEST.

After a long and successful journey of 37 years, full of great times, personal connections and fascinating memories, we have decided it’s time to flick the switch and say “Good night, Mrs. Calabash, wherever you are.” This will be the last issue of Shopping Center Digest “The Locations Newsletter,” as we decide to go on to other things.

It was our good fortune to enter this industry during its vibrant heyday, when “every cornfield had the potential to become a new mall” and we were lucky enough to experience a part of this exploding growth.

Some comments from our archives: John Z. Stec, VP, Fabric-Centers of America: “When I joined Fabri-Centers of America, Inc. I was a one-man Real Estate Department and I couldn’t have done without the help of SHOPPING CENTER DIGEST. Now that we have grown to over 693 fabric stores and will open 25-30 superstores this year, we depend even more on your newsletter than ever before.”

Or, Charles R. Lebovitz, President & CEO, CBL & Associates Properties, Inc: “You have eliminated the frills and are giving us the nuts and bolts of what is happening in our industry. We make certain that our key personnel see each issue so they can take advantage of the information…If something new breaks, we can find it first in SHOPPING CENTER DIGEST.”

Or, Ronald H. Erickson, VP-Real Estate, Friendly Ice Cream Corp: “I am glad there is somebody in our industry like yourself willing to call it like it is…Keep calling it as you see it—somebody has to speak up!”

Many Deals Offered

However, every trip has a beginning, a middle, and an end. And there is a welcome freedom—after some 40 years of pressure from demanding deadlines, the herding and hassle of business travel, being held captive too often in exhibit booths, that it’s time to listen to another drummer.

So as I review this passage from the late ‘60s, I recall the brainstorm that brought me to Al Sussman—the first head of the International Council of Shopping Centers—and showed him a dummy for a new magazine concentrating on all aspects of our shopping center/retail chain industry, and a proposal to partner in this endeavor. He reached into his desk drawer to bring out a similar dummy for a publication he had envisioned before heading the trade association; he couldn’t act on it then due to the then thought that a not-for-profit trade association shouldn’t publish a profit-making magazine containing advertisements.

However, the concept was quickly picked up then by Joseph Shore (no relation) of Communication Channels, Inc, and we partnered for a couple of years on Shopping Center World, now known as Retail Traffic. Then came the inspiration to go on my own with a newsletter focusing only on development and leasing with a faster, more organized delivery of information; and so was born the twice-monthly Shopping Center Digest. Several years later, attitudes changed and ICSC began publishing Shopping Centers Today.

Not Possible Today

The industry has changed numerous times over the years, and I recall numerous flashbacks and snippets resulting in deals that could not happen today.

I remember a flight sitting between Herb Brown, then head of real estate for Kinney Shoe, and a developer neither of us knew, who was planning a new shopping center. My lap served as the table for his leasing plan. By the time we landed, the “deal was done:” location, rent, fixture allowance, and leaving it up to the home offices to tie down the remaining minor details.

Or the cabanas around the pool at The Fountainbleau in Miami, with landlords and tenants concentrating on site plans and leasing plans, wheeling and dealing in their bathing suits, and then jumping into the water to cool off before heading to their next appointment three cabanas down.

Or when Spring Conventions moved annually in a triangle from North to South To West, and when the number of attendees was small enough that ICSC one year bought out Disneyland for one night of free entertainment as an event for all registrants. Or in Toronto when some of the larger landlords were unhappy with the accommodations and set up their leasing suites out of the city at Inn on the Park and ICSC was forced to run regular buses for registrants. Some later left the organization and it took years before they were all lured back.

Strong-Minded Individuals

And the creative, strong-minded individuals who built the foundation for this industry. Those earlier years were ones of zest with flamboyant, self-motivated, hard-driving individuals who towered over other entrepreneurs.

Len Farber and his “If you have an idea, and I have an idea, we share them and now we both have two ideas.”

After moving to Florida from the North, he headed on his yacht to summer around Martha’s Vineyard and Nantucket, having his captain drop him off at strategic points along the Inland Waterway and picking him up further north at the end of a day’s “wheeling and dealing.” And when he sold his last shopping mall: “Now I can afford to live the way I always have.”

Mel Simon, relocating from New York to Indianapolis to begin brokering deals on strip centers, then sending for brothers Fred and Herb to begin building their empire founded on strong relationships; this later became Simon Property Group. An important thank-you event was their annual, two-day Christmas Party, one day for the company, close friends and locals, and the other for the rest of the industry, including some competitors if they wanted to show up.

And there was Ed DeBartolo Sr. of DeBartolo Properties Management, with his annual weekend golf outing in Tampa for retailers, where business was not discussed—unless the tenant really insisted, and then out came the leasing plans. This was when leasing people for landlords got “a piece of the action”—usually 1%; so when the company sold a mall for $40 million and Ed Sr. dropped $400,000 in cash on Cal Gaeta’s desk, he was very thankful, knew he couldn’t go further up in the organization—and used the money to start his own company.

Or Al Taubman of Taubman Development Co, who other landlords credited with “teaching us how to build two-level malls.” To him, no big deal: “Put a one-level mall over another, cut a few holes in the floor between the levels for visibility, and put in some staircases and escalators for vertical access.”

Or the class act of Bill Cafaro of The Cafaro Company. You went into his hospitality suite at the Spring Convention and it was immaculate with linen napkins, tablecloths, silverware, fine dining and service, “the place experienced dealmakers went for lunch.”
You were a guest in his home.

And the kindness and helping hand of George Zamias, who began his career shining shoes, and when Marc Greenberg hit the age of passage when he “had to start his own thing”—and couldn’t convince him to reconsider, said “OK, I understand. Now, what do you need and how can I help you?”

And Milt Cooper of Kimco, when even though developers were willing to pay 21% interest during the recession of 20 years ago, they still couldn’t get traditional lenders to finance new projects; he went to Wall Street and engineered the re-birth of Real Estate Investment Trusts for shopping centers—which began major mergers and acquisitions leading to the formation of today’s behemoth owner-developers.

The Leasing Women

In the earlier days there were few women involved in dealmaking; this was really an all-male, old boys’ network. But there was Ann Hicks, a tough, direct women with Homart Development Co—shopping center arm of Sears—who turned down the offer to head the division because she didn’t want to relocate to Chicago from Dallas. And “I had to be as tough as you guys or you would’ve cut me off at the knees.”

And Elizabeth “Betty” Jarvis, who credited her years of training under a demanding Al Taubman while heading his leasing department with giving her the experience, and guts and strength to become the industry’s first female mall developer.

The route into the more rewarding responsibilities of dealmaking for women then usually began at the mall level through the marketing departments; today they come into this venue from many different doorways, and there may be as many hard-driving, creative women on both sides of the negotiating table as there are men.

And So Many Others

Irv Wolf at Monumental Properties, who referred to his office area as the Zoo, because the other offices in his area were manned by people named Fox, Katz, and Lyons. He spent his last years as a top expert witness, as he said, “testifying against some of the deals I made.”

He also mentored Rene Daniels, who did such a great job filling vacancies at all their malls that he “leased himself out of a job;” the projects became so valuable to investors that Monumental sold them all and Rene started his own consulting firm representing owner-developers, and gives back to the industry by teaching each year at ICSC’s University of Shopping Centers.

Dick Shur at Spencer Gifts and then Waldenbooks—the very funny, frustrated Borscht Belt comic who never introduced himself when you picked up the telephone, just started on his latest joke. But was also one of the toughest, most knowledgeable dealmakers on the tenant side.

Ken McGuire of Bresler’s 33 Flavors, who insisted he was not in the ice cream business but was a real estate guy working for an ice cream chain. After we started SCD, he told me, “Murray, you should take advertising” and then reserved the front cover for each of our magazine format issues until the company was sold about 15 years later.

Don Fitch of Zale Corp, very laid-back and low-key, who made more deals while on the golf course than any of his competitors who spent 10-12 hours at their desks and telephones.

Bob Congel of The Pyramid Cos, who said lawsuits from citizens fighting his projects were “just a normal part of doing business,” and once started construction on a regional mall before obtaining control of the property, and opened it within 11 months of groundbreaking.

Andy Murphy, Joe Moss, and the others of The Rat Pack who needed only one drink and a cigar to launch into “Danny Boy” and “Irish Eyes Are Smiling”—and were always eager to drop everything to talk the deal.

And on, and on, and on.

Important Events, Changes

The period beginning early in December was a milestone-- as important for dealmakers each year as the Spring Convention; it was another opportunity to build relationships and informal networks. Monday night in New York was scheduled for separate strategy and social dinners for landlords and retailers, then getting together for New England Development’s dessert party. Tuesday was the Kinney Party for “just a few thousand of your closest friends,” followed that evening by The Brown Boys’ reception (Herb and Howard), then the next day by Melville’s Party at Tavern on the Green, with limited seating, a small enough restaurant that there was a legitimate reason to limit the number of invitations.

Whereas a good portion of the industry now closes down that month as far as dealmaking is concerned, and attention focuses on holiday sales to determine expansion plans and how many new stores retailers will open the following year, in the past this period was busy, fertile territory. Leasing and development was an ongoing process; during these weeks was the time to correct lease problems, maybe try a new clause or approach, run it up the flagpole to see if anyone salutes.

And so it went during the ‘60s, ‘70s, ‘80s.

Ancients And Dinosaurs

Today, with decision-making on new locations now being determined by “the head office” and real estate committees, where responsibilities and much of the heavy-lifting have been farmed out to local brokers and numerous real estate networks that don’t know what’s going on outside their immediate trade area, where the location goes to who’s willing to pay the most without regard to its impact on the entire project, and you can’t understand the deal without looking at a computer printout, a transformation has taken place.

However, one cannot ignore what’s taking place in around our industry; there’s the economy, the fact that stubborn, high unemployment has caused consumers to stop spending, retailers to fold and cut back on expansion, that there are so few new markets left that are ripe—at this time—to support new development, and that there are so many other, less risky opportunities in foreign countries. Admittedly, there is a diminished relevancy to focus on new and expanding shopping centers, and expanding retailers.

Dealmaking today has become more business-like, more routine, more dependant on numbers spit out by the software program, more de-personalized. And certainly less creative.

Or, as those few ancients and dinosaurs still active say, “It’s not as much fun anymore.”

(And one final note of clarification. Shopping Center Digest has been closely aligned with the Directory of Major Malls since its inception over 31 editions ago. But it is now—and for many years—a completely independent publication separate from Shopping Center Digest. It is a primary Source to the shopping center/retail chain industry and continues to expand its depth of research and detail on its coverage of the major shopping centers and malls throughout the US and Canada—the ONLY such resource now available. Please visit www.shoppingcenters.com for online access to the almost 7,000 major shopping center listings and the latest product announcements from the Directory of Major Malls.)

To find out more about Expanding Retailers, Directory of Major Malls, or our other products, please go to our website, www.shoppingcenters.com .