PAY SCALE WHO SPENT HOW MUCH ON WHAT?

$12.6 billion
General Growth Properties acquires The Rouse Co.

$1.3 billion
Mills Corp. pays General Motors Pension Trust for full interest in three malls and 50 percent interest in five more.

$1.2 billion
Cerberus Capital Management, Lubert-Adler and Klaff Partners and Sun Capital Partners form a partnership to buy the Mervyn's chain and its 257 stores from Target Corp.

$520 million
The Inland Real Estate Group of Cos. buys 22 properties across the United States.

$234.8 million
The Westfield Group buys 50 percent stakes in three Australian retail centers from locally based Deutsche Diversified Trust.

$117 million
Regency Centers buys six grocery-anchored Chicago centers from Great Lakes Principals.

$103.1 million
Bromont Investments and Dolgen Ventures buy 25 open-air and single-tenant properties from Glimcher Realty Trust.

TOWN & COUNTRY

Most U.S. migratory analysis focuses on Baby Boomers' eventual Frost-Belt-to-Sun-Belt tsunami. But an under-the-radar trend shows a quieter exodus crossing the grain, bypassing the 'burbs and sunny climes for more rural, less subdivided environs. Older Gen Xers and younger Boomers have begun to bolster populations of smaller, less harried cities. The trend portends a waning gravitational force of the long dominant metropolitan industrial/commercial nexus.

Onward And Upward

GROWTH OF SMALL CITIES VERSUS REGIONAL GROWTH 1990-2000
Small City Growth Regional Growth
Northeast -3% 6%
Midwest 34% 8%
South 13% 17%
West 32% 20%
source: National League of Cities

Getting Out Of Town

On average across the United States, just under one in every three Americans plans on moving. Of those planning to move, the vast majority are looking to stay away from cities, with an average of 73 percent intending to relocate to the country, suburbs or a small town.

RETAIL SPACE VALUE ON THE RISE

Now, more than ever, real estate holdings play a huge part in the overall worth of retailers. Recent transactions, such as Home Depot's purchase of 24 Kmarts for $160 per square foot, bear this out.

REAL ESTATE VALUE OF RECENT TRANSACTIONS
Deal Total Consideration # of Stores Avg. Store Size Price Per sq. ft. Implied Rent
Kmart to Home Depot $365 million 24 95,000 $160.90 $12.81
Kmart to Sears $621 million 61 110,000 $92.55 $7.4
Marshall Fields $3.24 billion 62 233,000 $224.28 $17.94
Kids ‘R’ Us to Home Depot $197 million 124 20,000 $79.44 $6.35
Office Depot to Petco $45 million 20 20,000 $112.50 $9
Total/Average $4.468 billion 291 90,433 $169.78 $13.58
source: Company reports. Deutsche Bank Securities

THE BIERI REPORT: PHOENIX

PHOENIX FOOT TRAFFIC
SHOPPING CENTER RANKING
Arizona Mills A
Arrowhead Town Center B
Biltmore C
Chandler Mall B
Fiesta Mall B+
Kierland Commons C+
Metrocenter B
Paradise Valley B-
Scottsdale Fashion Square A
Superstition Springs B

Phoenix has never-ending growth. There is always new development on the horizon in Phoenix, with older centers falling by the wayside, and recently, Westcor announced four future regional mall sites. Kierland Commons has become one of the country's most productive lifestyle centers, and now competition is on the way. Scottsdale dominates the high-end tenants and since Macerich has purchased Biltmore more couture tenants will be headed to Scottsdale. Chandler Mall has also been successful. However, the downtown area has been unable to provide meaningful retail, even though sports and entertainment venus are in place. Desert Ridge is a unique big-box center with many restaurants and a great selection of junior stores. Look for more Kierland type developments in years to come.

LONG WALK ON A SHORT PIER 1

Ft. Worth, Texas-based Pier 1 Imports was once a unique concept, accounting for 50 percent of total specialty home goods stores in 1999. But today, the retailer accounts for less than 40 percent, says analyst Michael Baker of Deutsche Bank. He says the chain is steadily losing ground to mass merchants such as Target and Wal-Mart, and newer specialty chains such as Williams-Sonoma and Linens N Things.

MARKET SHARE OF SPECIALTY HOME GOODS RETAILERS
Retailer 2002 Sales 2002 Market Share 1999 Sales 1999 Market Share Change in Market Share
Bed, Bath & Beyond $3.6 billion 30% $1.8 billion 25% 5%
Williams-Sonoma $2.2 billion 18.10% $1.3 billion 18.40% -0.30%
Linens N Things $2.1 billion 17.90% $1.2 billion 17.30% 0.60%
Pier 1 Imports $1.6 billion 13.90% $1.1 billion 15.10% -1.20%
Crate & Barrel $831 million 6.80% $581 million 7.70% -0.90%
source: Deutsche Bank Securities

NET LEASING BIG BOXES

The big-box retail market is not dominated by a few tenants. Of the 21 tenants tracked by The Boulder Group, only two control more than 10 percent of the properties available for net lease. Circuit City has the most big-box locations available for investment, with 21 percent of all big-box properties. WInn-Dixie has the second highest number of available locations, with 14 percent. And with just less than 8 percent of all big-box properties on the market, Borders comes in third.

Market Share of Specialty Home Goods Retailers
Chain Market Average CAP Average Price Per Sq. Ft. % of All Big-Box On
Lowe's 0.00% $139.55 1.32%
Petco 5.5% $981.67 1.32%
Home Depot 6.63% $49.02 3.95%
Linens N Things 6.91% $296.93 2.63%
Sam's Club 7.0% $162.09 1.32%
Bed Bath & Beyond 7.5% $460.04 1.32%
Staples 7.8% $223.13 1.32%
Circuit City 7.87% $291.32 21.05%
Babies ‘R’ Us 8.0% $221.42 1.32%
Best Buy 8.09% $276.20 5.26%
Borders 8.18% $368.01 7.89%
Wal-Mart 8.22% $114.73 3.95%
Office Max 8.35% $185.51 2.63%
Sears 8.52% $151.46 3.95%
Kmart 9.75% $98.31 7.89%
Dick's Sporting Goods 9.83% $117.69 2.62%
JC Penney 12.88% $13.26 1.32%