Road trips are one of the best ways to see, firsthand, how America's retail landscape is changing.
My recent travels have taken me to the front doors of many real estate companies, but two in particular — CBL & Associates Properties and Edens & Avant — have adopted amazingly similar corporate strategies despite their focus on different property types.
CBL is America's third-largest mall REIT and among the current crop of REIT darlings (see our REIT update on p. 56). Its brand-new corporate headquarters outside Chattanooga, Tenn., overlooks the company's first major retailsite, where the Hamilton Place Mall now stands.
Stephen Lebovitz, company president and one of three sons of CBL founder Charles Lebovitz, is committed to the company's strategy of redeveloping older mall properties in secondary. But still, he wants to position CBL as a more national player in a big way. “Size does get attention,” says Lebovitz. “Obviously the bigger you are, the greater your access to capital and you get on a lot of peoples' radar screens.”
It took a big step in that direction when it recently absorbed 21 malls from The Richard E. Jacobs Group. But Lebovitz is on the prowl for more, particularly in the Midwest and West, farther afield from the company's Southeastern roots.
Edens & Avant, one of the country's largest owners, managers and developers of grocery-anchored shopping centers, makes its home in the Bank of America high-rise office building in downtown Columbia, S.C. In May, founder Joe Edens tapped 40-year-old Terry Brown to be his successor as CEO. Edens remains chairman, while Jodie McLean shares management duties as company president and chiefofficer.
E&A, which uses the “Necessity Retail”moniker to reflect the nature of its core business, is pursuing an aggressive growth strategy these days. Brown makes no secret that he wants to nearly double the size of the $2 billion company in the next few years. “In five years, we will be the largest owner of food-anchored shopping centers in 13 markets,” he predicts.
To do that, he and McLean will stray from the Southeast and focus on buying and developing properties up and down the East Coast from Boston to Miami. The first step — in August, E&A opened an office in Boston to help handle the recent acquisition of Konover & Associate's Northeast portfolio of 36 strip centers, through a joint venture with Boston-based Samuels & Associates.
While these two firms are playing in two different retail real estate niches, central to both their strategies is an emphasis on short-term growth — in both the mall realm and in the strip center business. Clearly they seek differentiation from their peers, but they're also after something more — greater attention from investors and retailers alike. We'll be watching.