Saks Owner Seeks Real Estate Spinoff ‘As Quick As Possible’

April 10, 2017 in Latest News

The Canadian owner of Saks Fifth Avenue said it may spin off its real estate assets in a separate public company.

“We have a tremendously valuable portfolio of real estate, which could be monetized in a variety of ways,” Hudson’s Bay Company Chairman Richard Baker said during an earnings call Wednesday. “What we should have done and what we should be doing as quick as possible is IPO-ing our U.S. real-estate portfolio and/or IPO-ing our Canadian real-estate portfolio.”

Toronto-based Hudson’s Bay bought Saks Inc. in 2013. Two years later it formed joint ventures with retail real estate investment trust Simon Property Group and RioCan Real Estate Investment Trust.

Last year Baker said that Hudson’s real estate portfolio is worth around $4.8 billion, and on Wednesday he claimed the figure is still up-to-date.

Hudson’s Bay has been planning a real estate IPO since at least 2015, but initially wanted to wait for further acquisitions. Now it appears to be in a rush, with interest rates set to rise and the real estate market cycle heading for a downturn.

Hudson’s Bay announced earlier this week that it planned to stack apartments and offices on top of its Fifth Avenue Lord & Taylor store. That renovation is expected to cost more than $250 million.

In February, the company was reportedly in talks to buy Macy’s, which has also explored selling off its considerable real estate assets.

 

Source:  The Real Deal

Retail REITs Luring Customers With Rewards Programs

July 11, 2016 in Latest News

spring rewards programConsumers have long demonstrated their fondness for customer loyalty programs across a wide variety of businesses, from major airlines to hotels to coffee shops around the corner.

In a bid to push foot traffic across their portfolios, retail REITs are now turning to loyalty programs that gives customers instant access to promotions and cash-back rewards around their malls and shopping centers.

REITs and their tenants get real-time insight into the spending patterns of their customers in the process.

Last month, Pennsylvania Real Estate Investment Trust (NYSE: PEI), commonly known as PREIT, unveiled its digital rewards program, PREIT Perks, at the Cherry Hill Mall in New Jersey. PREIT plans to roll the program out across other properties in the next several months.

“PREIT is committed to investing in new, innovative programs to better connect and incentivize shoppers and amplify the omnichannel experience,” said Joseph Coradino, CEO of PREIT. He added that the program “elevates the customer experience for shoppers by giving them an opportunity to be rewarded for their loyalty to our properties, and optimizes the retailer-consumer relationship by providing our tenants with real-time insights into shopper behavior.”

PREIT’s partner on the project, Spring Rewards, is familiar around the REIT industry: The Chicago-based startup also counts Simon Property Group (NYSE: SPG), Taubman Centers, Inc. (NYSE: TCO), and Macerich (NYSE: MAC) among its clients.

Customers can connect their debit or credit cards to the loyalty rewards programs through the Spring Rewards platform at mall kiosks or online. As they use their cards in participating malls, their spending is tracked. When shoppers earn rewards, they can apply them at any participating retailer in the mall. Additionally, when a shopper is in the mall, the Spring Rewards platform can trigger promotions for stores in real time. Redemption of rewards is automatically administered by the platform.

Spring Rewards expects programs to be operational at 50 to 70 shopping centers by the 2016 holiday season, and “several hundred” centers are likely to be added next year, according to Bruce Mitchell, co-founder and CEO of the company.

Relationships with Credit Card Companies Key

Spring Rewards’ relationships with the major credit card companies have played a primary role in attracting mall operators. Mitchell told REIT.com that until now, structural challenges prevented mall operators from having direct access to transaction data at their properties. Now that the company’s technology is in place with Visa, MasterCard and American Express, “shoppers will be rewarded and retailers will gain visibility into consumer behavior like they’ve never had before,” Mitchell said.

Simon “has always believed that tying a loyalty program to existing credit cards was the way to go,” according to Ed Vittoria, the mall REIT’s vice president of loyalty marketing and partnerships. Yet, until now, the technology wasn’t user-friendly, he said. In addition to striking deals with the credit card companies, Vittoria noted that Spring Rewards “created a solution that packaged up a whole mall as a single entity.”

Spring Rewards acknowledges that a segment of the population is apprehensive about providing their credit card information for loyalty programs. However, “our partnerships with the shopping mall operators provides an ideal environment to engage with consumers and explain the value proposition tied to connecting a debit or credit card to the network,” said Jason Pope, the company’s senior director of digital marketing.

Pope added that direct relationships with Visa, MasterCard and American Express mean the rewards programs that utilize its platform are fully compliant with industry security standards for protecting payment card information.

More Effective Marketing Tool for Retailers

Taubman Centers recently introduced a Spring Rewards-based loyalty program at the Mall at Green Hills in Nashville, Tennessee, and at the Cherry Creek Shopping Center in Denver. Thus far, shoppers are “drastically increasing” their spending per transaction as a result of earning a reward, according to the company, which is planning other launches across its portfolio during the next 12 months.

The Spring Rewards program is currently live at eight Simon malls, with plans to slowly expand to additional properties. So far, “we’re pleased with the numbers signing up, and the reaction from consumers,” Vittoria said.

Simon is now working with Spring Rewards to communicate to retailers “that we’re introducing this program as a marketing program that we believe is going to be more effective than traditional methods,” Vittoria said.

 

Source: REIT.com

Mall Landlords Turn To Tech To Evolve And Survive

June 13, 2016 in Latest News

mall landlordsMall owners have taken pains to defend the shopping model, even as traffic has fallen and some traditional mall retailers falter.

Simon Property Group chairman/CEO David Simon in April pushed back against the widely-held notion that American malls are dying, while Taubman Centers COO Bill Taubman last month said that the biggest problem facing U.S. malls is under-performing retailers. While some destination and many class A malls seem to be thriving, others are struggling as anchors like Sears and Macy’s falter or close.

Others, including software and data companies, are also coming to malls’ rescue. They say the model is not so much doomed, but changing, in sometimes fundamental ways. After lagging when it comes to technology, mall owners are now increasingly leveraging software tools to also transform it.

Unlike the early days of North American malls, when retailers and mall owners purposely made it difficult to navigate a shopping center so that shoppers would discover more stores (and opportunities to spend money), these days that’s too much to ask. Malls today need a system for offline “search” akin to online search capabilities, according to Hongwei Liu, CEO/co-founder of Mappedin, an indoor wayfinding platform for premium North American malls.

“Today, consumers have more choice than ever, and not a lot of time. They need search in malls that that respects their time,” Liu told Retail Dive.

Liu compared Mappedin’s capabilities to a brick-and-mortar version of Amazon’s search. That comparison to Amazon is also found in the Wall Street Journal’s description of the wide variety of software tools and services available to malls, including tools to analyze foot traffic.

“We’re bringing the same analytics Amazon used to crush bricks-and-mortar retailers into the real world,” Sysorex chief marketing officer Sage Osterfeld told the Wall Street Journal.

 

Source:  Retail Dive

Brick-and-Mortar Shopping More Sustainable Than Online Shopping

March 14, 2016 in Latest News

simon-property-groupBrick-and-mortar shopping represents better sustainability performance compared to online shopping, according to a new white paper released by Simon Property Group (SPG).

The study, conducted by Simon in conjunction with Deloitte Consulting, created a “cradle-to-grave” Lifecycle Analysis (LCA) that examines the environmental impact of all material, energy and fuels attributable to a product in its life cycle.

The LCA assumes consumers purchase the same basket of goods online as they would in a brick-and-mortar location. According to the LCA, every year online shopping has a 7% greater environmental impact versus brick-and-mortar shopping.

Some of the other main findings of the report include:

  • Customers travel to the mall in groups, which lowers the environmental impact per product bought.
  • Shoppers tend to return about 33% of products purchased online versus 7% for brick-and-mortar stores.
  • Packaging used for the delivery of online orders has a greater overall environmental impact.

“In an age when consumers are increasingly demanding same-day or fast delivery…the negative impact of online shopping is likely to worsen even more,” said Mona Benisi, senior director of sustainability at Simon.

Source:  Bisnow

Three Powerhouses Announce Partnership

April 27, 2015 in Latest News

brickell city centreSwire Properties Inc., Whitman Family Development, developer of Bal Harbour Shops, and Simon Property Group have announced a three-way partnership to jointly develop the retail component of Brickell City Centre.

Under the partnership, Swire Properties will remain the primary developer of the mixed-use project, while Simon Property Group and Whitman Family Development will share the role of co-developer for the retail component. Whitman Family Development and Swire Properties entered a partnership in January 2013 to co-develop Brickell City Centre’s 500,000-square-foot shopping center.

Simon Property Group will bring more than 55 years of international experience in the premium and high-end retail market as well as a highly successful South Florida portfolio, having developed a number of premium shopping centers in the Miami area.

“We are delighted to have Simon Property Group join us and Whitman Family Development on this exciting venture,” said Stephen Owens, president of Swire Properties Inc. “Brickell City Centre is on its way to redefining urban living in the Brickell neighborhood, and we feel that this partnership will further enhance its retail component to offer an unparalleled lifestyle experience in Miami. Simon Property Group’s and Whitman Family Development’s expertise and proven track record of success in developing and managing high end shopping centers in the United States promises to broaden Brickell City Centre’s appeal to a wide spectrum of visitors, including  Miami’s high-net-worth residents and international clientele.”

“We welcome Simon Property Group to the team and are excited to combine our strengths to deliver a diverse and dynamic retail program for the downtown Brickell district,” said Matthew Whitman Lazenby, president and chief executive officer of Whitman Family Development. “This exciting collaboration allows us to further fulfill our shared vision and bring the right mix to Brickell City Centre,” he said.

“We look forward to working with Swire Properties and the Whitman Family to bring a unique and highly desired shopping center to the Brickell community and urban Miami,” said Richard Sokolov, president and COO of Simon Property Group. “We have already seen strong interest from retailers who have enjoyed great success with us around the country and who are very excited to join us at Brickell City Centre.”

Brickell City Centre has seen several milestones in recent months, including the signing of Saks Fifth Avenue as its luxury retail anchor and the topping off of EAST, Miami hotel, Swire Hotel’s first US venture. The first residential tower, Reach, is now over 80 percent sold, and it was announced that Brickell City Centre will also house the Mexico-based ultra-luxury dine-in theater, Cinemex.

 

 

Are Off-Price Retail Centers Set For A Building Boom?

February 23, 2015 in Latest News

rackAs mall REITs head into 2015, retail outlet centers continue to take center stage as the name of the game in new development.

The push comes at a time when the focus for regional mall owners and operators has been on redevelopment rather than ground-up projects and many retail tenants are expanding their off-price store presence as a way to feed the consumer appetite for value and lift sales and profits.

“It appears that the environment for outlet centers remains strong, or at least the enthusiasm on the part of developers and owners remains,” Ryan Severino, senior economist for commercial real estate tracker Reis, told IBD via email. “Outlet centers are a much more prominent part of the retail landscape than they were just 10 or 15 years ago.”

While high-end mall owners and quality shopping center operators are expected to perform well this year, in a recent report Stifel analyst Nathan Isbee said most of the new development among the mall REITs has been focused on outlet centers.

“The outlet center industry is experiencing a building boom, delivering eight outlet center openings in both 2012 and 2013 and another six in 2014, well above the historical average of (two to three) centers,” he wrote.

Simon Property Group and Tanger Factory Outlet Centers are the two “dominant” outlet center developers, he adds, noting both have “robust” development pipelines in the U.S.

Last month, Tanger and its 50/50 joint venture partner started construction on the newest Tanger Outlet center in Southaven, Miss., which is located four and one-half miles south of Memphis, Tanger said in a press release announcing fourth-quarter results Tuesday. Tanger expects the center to be completed in time for a holiday 2015 opening.

Construction of the other new developments the company intends to open in 2015 is “ongoing,” it said.  Current plans include an April 2015 opening at Tanger Outlets Savannah; a May 2015 grand opening at Tanger Outlets Foxwoods, at Foxwoods Resort Casino in Mashantucket, Conn.; and a third-quarter 2015 grand opening at Tanger Outlets Grand Rapids, in Grand Rapids, Mich.

The company and its 50/50 joint venture partner expect to be able to start construction of Tanger Outlets Columbus, a pre-development stage project in Columbus, Ohio, in time to complete construction and open the center in the first half of 2016.

Most of Simon Property Group’s new development activity is concentrated in the outlet center sector, Isbee said. The REIT opened three outlet centers in 2014. It has four new outlet centers currently under construction, including ones in Gloucester, N.J.; Tucson, Ariz; Tampa, Fla.; and Vancouver, British Columbia, which will come online in 2015, Isbee says.

High-end retailer Nordstrom is among the store operators expanding its off-price concept, Nordstrom Rack. Nordstrom has 167 Nordstrom Rack stores and has announced plans to open 26 new stores in 2015, spokesman Dan Evans Jr. told IBD in an email interview.

Among the openings planned for this year is a Nordstrom Rack at The Mall of Louisiana in Baton Rouge, La. The roughly 30,000-square-foot store is scheduled to open in fall 2015. The mall is owned and managed by General Growth Properties.

“The Rack is a great fit for our overall strategy to serve more customers in more places in more ways,” said Evans. “The Rack also allows us to introduce the Nordstrom brand to customers who have never shopped with us. We serve customers through four channels: Nordstrom and Nordstrom Rack stores, online full price at Nordstrom.com, and online off-price at Nordstromrack.com and HauteLook. We hope that by focusing on the customer and making it as easy, convenient and relevant for them, we are able to improve their experience with Nordstrom wherever they choose to shop with us.”

While the Rack is a “growing part” of Nordstrom’s business, online — primarily Nordstrom.com — continues to be the fastest-growing, Evans said.

Simon Property Group, General Growth Properties and Tanger Factory Outlet are part of IBD’s Finance-Property REIT industry group. Simon Property Group has an 88 Composite Rating out of a possible 99 and General Growth Properties has a Composite Rating of 85, while Tanger Factory Outlet has a 77. The ratings factor in several metrics, such as earnings growth and stock price gains. Nordstrom is a part of IBD’s Retail-Department Stores industry group. It shares the group’s highest Composite Rating of 85 with Dillard’s.

 

Source:  Investors.com

Simon Spin-Off Buys Glimcher Realty Trust In $4.3B Deal

September 22, 2014 in Latest News

washington prime groupWashington Prime Group, a retail REIT formed earlier this year as a shopping center spin-off from mall giant Simon Property Group, agreed to acquire mall owner Glimcher Realty Trust in a deal valued at approximately $4.3 billion, including debt assumption.

The combination will consolidate ownership of 68 million square feet of retail space in a combined portfolio of 119 properties.

Although Washington Prime is the buyer, the combined company will keep Glimcher’s headquarters in Columbus, OH, and Glimcher Realty’s chairman and CEO Michael Glimcher will become CEO and vice chairman of the combined firm, which will be renamed WP Glimcher. The combined company will keep Washington Prime Group’s current ticker symbol of WPG.

Washington Prime CEO Mark Ordan, will become executive chairman of the firm’s board, and Glimcher will report to him.

Under the terms approved by both REIT’s boards, Glimcher shareholders will receive $10.40 in cash and 0.1989 of a share in WPG stock at closing for each GRT share.

In an interesting twist to help fund the transaction, Simon struck a separate deal to acquire a pair of malls from Glimcher, Jersey Gardens in Elizabeth, NJ and University Park Village in Ft. Worth, TX, for $1.09 billion. The sale of the two malls to Simon will occur with the closing of the acquisition of Glimcher by Washington Prime.

The sale of Glimcher Realty is expected to close in the first quarter of 2015. Washington Prime expects to fund the purchase through asset sales to Simon, joint ventures with institutional partners, other assets sales, capital markets transactions, and tapping a $1.25 billion fully committed bridge loan provided by Citi.

Washington Prime was spun off as a separate REIT by Simon to separate its main upscale mall business from the strip centers and smaller enclosed malls in 23 states. General Growth Properties made a similar move a few years ago, spinning off its lower quality Class B and C malls to a separate entity, Rouse Properties.

Earlier this month, Washington Prime added Butch Knerr to its executive team, as executive vice president and chief operating officer. Knerr transferred from Simon where he had been executive vice president of leasing.

In a presentation on the proposed transaction, the two companies said they expect to realize substantial cost savings from reduced public company costs and the integration of property management and back office support currently provided to WPG by Simon.

Following the acquisition, the companies plan to integrate senior management and corporate support functions and transition property management to Glimcher. They also plan to finalize potential joint venture arrangements and review their combined portfolio to identify non-core assets for disposition.

 

Source:  CoStar

Aventura Mall To Rank Second-Largest In US With Expansion

February 24, 2014 in Latest News

aventura-mallPlans to expand America’s third biggest shopping center could push the Aventura Mall into the nation’s No. 2 slot.

The owners, a partnership between Turnberry Associates and Simon Property Group, want to add a 3-story, 241,000-square-foot retail wing and a 1,400-space, 7-story parking garage.

The mall, at 19501 Biscayne Boulevard just south of the Miami-Dade and Broward county line, already boasts 2.7 million square feet, and occupancy was near 100 percent in September.

The new garage would featuring a built-in transit facility for buses, shuttle vans and taxis to help serve the mall’s 28,000 yearly visitors, according to Joanne Carr, the director of development in Aventura.

The expansion plan is under city review. The final plan must meet zoning requirements for the site or will need a variance approved by a vote of a city board.

 

Source:  The Real Deal