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As 2010 draws to a close, it is an opportune time to look back at one of the more dramatic years the industry has ever faced.
The biggest story by far was the reorganization of General Growth Properties, which successfully emerged from Chapter 11 bankruptcy protection as two firms and, in the process, fought off an aggressive takeover effort mounted by its chief rival, Simon Property Group.
But 2010 had much more to it than that. It was a year that saw the beginning of the industry's turnaround. By year's end, true signs of recovery were all around. Retail sales improved. Vacancies seem to have reached a peak. Rents may be at their bottom. Commercial real estate values--depending on who you ask--have either bottomed out or have started to rise again.
In addition, it was a year that witnessed a proliferation of joint ventures among both public and private retail real estate firms. It was also a year when the industry continued to experiment with social media and began to embrace mobile apps. Developments on those fronts promise to continue to alter the retail real estate landscape next year as well.
The CMBS market began to stir. And while the amount of distressed debt mounted throughout the year, the pace of loans going bad slowed in the second half of the year. And lenders finally began to get active again. To be sure, debt is largely only available for the best assets in the best markets for trusted borrowers, but the situation is gradually improving for everyone else as well.
All of that has left many optimistic about what 2011 holds. Retail Traffic already took a look at what 2011 might bring.
But before 2011 starts, here is one last look at the year that was in retail real estate. (And, for a further look back, check our 2009 Year in Review.)
Next Page: January
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January
The new year brings new leadership to several retail real estate firms that had succession plans in place.
Retailers hit a home run with their December same-store sales.
Target reveals big plans for the next five to 10 years. The initiatives include spending $1 billion on store renovations, opening smaller stores and expanding into markets including Canada, Mexico or South America.
The first signs of retailers breaking out of their funk emerge as they become more active in pursuing outlet concepts and up-and-coming chains target big-box space.
The ill-fated Xanadu Meadowlands project faces more trouble.
A study shows that in 2009, the retail real estate industry delivered the lowest amount of space in 27 years.
Colliers International merges with FirstService Real Estate Advisors in a move that creates a brokerage behemoth on par with CB Richard Ellis and Jones Lang LaSalle.
A fight breaks out over Mel Simon's estate.
Burger King experiments with selling beer at some of its locations.
After a bitter fight, a court orders Joseph Freed to hand over Block 37 to creditors.
Movie Gallery files for bankruptcy protection.
Next Page: February
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February
The big drama of the year begins as Indianapolis-based regional mall giant Simon Property Group goes public with a proposal to acquire its rival, Chicago-based General Growth Properties.
General Growth Properties, of course, ran into trouble by building up a debt load of nearly $27 billion in amassing the second largest portfolio of regional malls in the United States. The firm counted on being able to refinance and pay down debt. But then the credit crisis hit. As debt came due, General Growth was forced to file for Chapter 11 reorganization in early 2009. Nearly a year later, a new phase of the drama began. Just when it appeared that General Growth would emerge relatively unscathed, Simon began its pursuit.
Here's how it went down in February:
- Simon Announces Bid for General Growth
- GGP Responds to Simon
- Simon Offers $10B for GGP
- The Industry Reacts to the Potential Merger
- Simon Writes Back to GGP
- GGP Responds to Simon's Response
- Simon Pulls Blackstone Into the Mix
- What We Were Saying Five Years Ago About Simon and General Growth
- Simon Continues Its War of Words on General Growth
- All Indications Point to GGP Wanting to Remain Independent
- Brookfield Readies a Bid to Help Capitalize GGP
- Suitors Jockey for Position
- Report: GGP Would Rather Split Than Sell to Simon
- Simon Blasts the GGP/Brookfield Proposal
- General Growth’s Reorganization Plan Seen as a Rebuke to Simon
- GGP Executives Break Their Silence
Our February cover story posits what a trip to the mall might look like in the future shaped by the emergence of smartphones, tablet computers and social media.
Retailers post solid same-store sales gains in January.
RioCan REIT builds up a stake in Cedar Shopping Centers.
Even though distress mounts, experts provide tips on how tenants can avoid disruptions.
Glenn Rufrano, off his successful stint helping Centro Properties Group manage its debt troubles, is named CEO of Cushman & Wakefield.
A Congressional Oversight Panel ln Commercial Real Estate Losses and the Risk to Financial Stability issues a 189-page report with a dour take on the sector.
Walgreen Co. buys Duane Reade.
Next Page: March
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March
Elizabeth Warren's voices some major concerns about the commercial real estate sector. Warren is worried about midsized banks–about 3,000 of them–that have “dangerous concentrations in commercial real estate lending.”
We present our annual rankings of the Top Owners and Top Managers of retail real estate.
Same-store sales soar in February.
On the retailer front, American Eagle Outfitters says it will close its Martin + Osa chain, Abercrombie & Fitch plans to shutter 100 underperforming stores over the next three years and apparel retailer French Connection plans to dismantle most of its U.S. store portfolio.
The saga surrounding General Growth's bankruptcy continues:
- GGP Lays Out Plan; David Simon Bemoans Lack of Data
- General Growth Gets Extension as Team of Suitors Continues to Grow
- Ackman, Fairholme Offer to Inject Capital into GGP
- Simon Plans to Raise Its Offer for General Growth
In one of the biggest deals of the year, Inland Real Estate Acquisitions Inc. completed a $424 million acquisition of 16 shopping centers containing 3.5 million square feet, from a joint venture between TIAA-CREF and Developers Diversified Realty.
Glimcher Realty Trust forms a $320 million joint venture with Blackstone.
We get a rare look at what drives David Simon.
The Mall of America bucks the odds and thrives during the Great Recession.
While 2009 was marked by retailers asking for concessions, landlords find that retailers are now asking for permanent changes to their leases in exchange for signing longer contracts or for giving up restrictive clauses. And, overall, it seems the leasing market is beginning to stabilize.
The industry finds that receivership opportunities are slow to materialize.
The net lease market proves to be a rare bright spot.
Shopping center owners continue the push to test social media.
The first talk of a potential Blockbuster bankruptcy emerges.
Barnes & Noble names a new CEO with a strong background in e-commerce.
On the lighter side, a new study reveals that Apple’s Fifth Avenue store has become the fifth-most photographed landmark in New York City.
A study reveals the top brands in commercial real estate.
Next Page: April
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April
In what is seemingly an annual tradition, rumbles emerge that Walmart is once again eyeing New York. In addition, we get a creative look at how Walmart became the behemoth it is today.
Weak comps and an early Easter make for boffo numbers in the March same-store sales reports.
There's a small flurry of new retail real estate joint ventures. Equity One and DIM, Kimco Realty Corp. and the Canada Pension Plan Investment Board and TPG Capital and Caruso Capital Partners LLC all announce tie-ups.
In the month in General Growth news, we have:
- GGP Seeks Court Approval of Reorg
- Fairholme Funds Agrees to Invest in GGP
- Simon Amends Its Offer for GGP
- Simon Lines Up More Capital for GGP Bid and Improves Its Proposal
- Fairholme Makes It Clear That It's Not On Board With SPG Plan
- Simon, Brookfield in a Stand-Off in General Growth’s Reorganization
Some landlords find that the best way to find new tenants in the current environment is to incubate them. However, they are also finding that retailers are increasingly willing to talk about expansions.
The CMBS market exhibits some surprising vitality.
In other retail news Borders receives a new $700 million credit facility that features GE Capital as a co-lender, Urban Outfitters talks about launching a stand-alone wedding brand in spring 2011 and the creative team behind Anthropologie will have a hand in developing the brand. And Japanese apparel chain Uniqlo preps to open a giant store on New York’s Fifth Ave.
Next Page: May
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May
Nordstrom makes its New York City debut. In other retail news, bankrupt movie rental chain the Movie Gallery announces it will liquidate and a private equity firm agrees to buy casual dining restaurant chain Dave & Buster’s for $570 million.
Jeffrey DeBoer, president and CEO of the Real Estate Roundtable in an address at at an industry conference says “Our industry is at war.”
Retailers get a reality check when April's same-store results come in.
In May's General Growth news:
- After Mulling Options, GGP Still Chooses Brookfield
- Simon Raises Its Bid for GGP
- Simon Makes Final Offer; GGP Still Favors Brookfield Bid
- GGP Wins Court Approval of Brookfield Bid; Simon Withdraws
- What's Next for Simon?
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The industry's big show ICSC RECon takes place in Las Vegas. Here's how we covered the show:
- It's Getting Ready to Begin
- ICSC Attendees Report Increased Leasing Activity
- Retail Recovery Will Be Rocky, Edens & Avant CEO Predicts
- Day One Thoughts
- Activity Picks Up as Day 2 Gets Underway
- Managers and Developers Continue to Wrestle With Social Networking
- Firms Slowly Putting Development Back on the Agenda
- Day 2: Feeling a Bit More Like Normal
- RECon 2010 Sound Bites: From CMBS To Wasilla
- 2010 ICSC Marked by Increased Optimism and Activity
- Done Wth the Show and Pretty Much Brain Dead
Westfield announces a $10 billion redevelopment campaign.
Related Co. announces it will make an attempt to revive the Xanadu Meadowlands project.
There is another flurry fo retail real estate joint ventures. Kimco Realty Corp. and BIG Shopping Centers, Cedar Shopping Centers and RioCan REIT and Inland Western Retail Real Estate Trust and RioCan REIT all announce deals.
Our May cover story attempts to gauge what is in the minds of consumers.
Federal Realty talks about its road to success.
Next Page: June
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June
We look back at the controversial Kelo v. City of New London ruling five years on.
Observers call the May same-store sales numbers disappointing.
A report from Blue Vault Partners LLC sheds light on the world of nontraded REITs.
Two more big joint ventures are announced. PCCP LLC, Alberta Development Partners LLC and Walton Street Capital LLC team up in one and join forces in the other.
The recovery in the CMBS sector continues to take hold.
Luxury retailers enjoy a surprising resurgence.
Landlords report that retailer demands for concessions continue to diminish.
Architects share tips on how they've survived the downturn.
Canadian investors become more aggressive in pursuing U.S. investment opportunities.
Mall owners and managers become more sophisticated in mounting online marketing campaigns that make the most of social media and other emerging technologies.
Westfield announces plans to build a virtual mall.
Next Page: July
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July
Bed bugs begin to appear on the Manhattan retail scene. First Abercrombie & Fitch is forced to temporarily close one of its Manhattan stores after beg bugs are discovered and two weeks later they strike at a Victoria’s Secret store in Midtown.
In results many experts see as "mixed," retailers post a 3 percent increase in same-store sales.
We publish our list of the Top Contractors in the retail space in 2010.
NRF presents its annual list of 100 biggest retailers, which remains virtually unchanged from 2009.
Disney unveils a redesigned version of its store, which puts the focus on interactive experience.
Australian REIT Centro secures a $659 million term loan and a $2.3 billion loan extension among its Centro NP LLC, Super LLC and Centro NP Residual Holding LLC divisions.
Retailer representatives express frustration over the fact that many landlords won’t provide traffic counts for their centers.
U.S. developers show increasing curiosity about environmentally sustainable design practices.
National brokerage firm Marcus & Millichap promotes Alan N. Pontius to the new position of national director of commercial leased investment properties.
Next Page: August
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August
A California court rules against what it sees as restriction of free speech at a Westfield-owned mall. It is just the latest in a series of rulings across the country on whether mall owners can limit the kinds of conversations that take place on their properties.
We reveal the winners of our 21st Annual Superior Achievement in Design and Imaging Awards. Many of the winners are enclosed regional malls.
July same-store sales come in tepid and rise by 3 percent.
CoStar Group launches its CoStar Commercial Repeat-Sale Indices.
The Blackstone Group and Glimcher Realty Trust complete their second deal together by acquiring Pearlridge Center in Hawaii for $242 million. It is one of the largest single-property acquisitions of the year.
Cedar Shopping Centers and RioCan buy seven shopping centers from PREIT for $200 million.
The Westfield Group signs a deal with Costco to open stores at its properties in Los Angeles, Sarasota, Fla. and Wheaton, Md.
Centro U.S. CEO Michael Carroll provides an update on the firm’s performance in 2010.
House of Representatives passes the Dodd-Frank Act in an effort to prevent another credit crisis. Sam Chandan, chief economist with Real Capital Analytics, discusses the bill’s potential impact on commercial real estate.
Private equity firms start looking into the retail sector for acquisitions.
Jones Lang LaSalle buys out General Growth Properties’ third party management business.
New retailers, both home-grown and from overseas, appear on the horizon for U.S. landlords.
The City of Westminster attempts to take over control of a privately-owned mall using eminent domain.
ICSC lobbies Congress for legislation to speed up distressed loan workouts.
Barnes & Noble puts itself on the block, sparking worries of potential store closures.
Retailers turn their attention to CAM charge errors in an effort to reduce real estate costs.
Simon Property Group, Macy’s, Best Buy, American Eagle Outfitters and a handful of other retailers partner with smartphone app Shopkick to reward shoppers for visiting their stores. One week later, CBL reveals it’s developing a mobile app for its malls.
Boston Mayor Thomas Menino, Vornado Realty Trust and Gale International clash over the best way to develop Boston’s Downtown Crossing site.
Commercial property owners turn to strategic defaults to resolve loan issues.
Next Page: September
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September
We look at the potential impact of immigration reform on retail in the U.S.
August same-store sales come in stronger than expected and rise roughly 3.2 percent.
Simon Property Group finalizes its purchase of Prime Outlets, giving up some assets to appease the Federal Trade Commission.
Cole Real Estate Investments puts together two IPOs for Cole Advisor Retail Income REIT Inc. and Cole Advisor Corporate Income REIT Inc.
Experts warn borrowers against using strategic defaults as a bargaining tool with lenders.
Mall owners look into mobile apps, their own social networking sites to connect with consumers.
A Brazilian private equity group buys Burger King. Industry expects real estate to play a major role in the transaction.
Supermarkets start coming back into malls.
Xanadu Meadowlands lenders pick Jones Lang LaSalle to manage the property.
Retail expansion potential reaches an 18-year high, according to Marcus & Millichap.
Borders tries to tries to remake itself into a lifestyle brand.
New York’s Union Square becomes the poster child for mixed-use.
Toys ‘R’ Us, Sears try to take back toy market share from Walmart.
GNC announces a $350 million IPO, plans to open more than 4,000 stores.
Next Page: October
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October
Retailers get ready for changes in lease accounting rules. Real estate brokerage and management firms publish guidelines on how to deal.
The Bucksbaum family gets left out of General Growth’s board of directors. The new board includes GGP CEO Adam Metz and Brookfield Asset Management CEO Bruce Flatt.
Retailers have a solid month in September as same-store sales grow 2.6 percent.
A bankruptcy judge confirms GGP’s plan of reorganization.
Former Vornado exec Sandeep Mathrani agrees to become GGP's new CEO.
Bill Ackman buys a stake in J.C. Penney Co.
Coventry Real Estate Advisors, Urban Retail Properties win a big leasing assignment.
Realty Income agrees to buy 136 net lease properties for $250 million.
Taubman Centers hires Rene Tremblay to lead its Asia division.
The Shops at Atlas Park, a foreclosed lifestyle center in Queens, takes the spotlight for poor tenant selection.
Retailers get ready for the holidays with a frenzy of pop-up leasing.
Urban Land Institute warns of an era of less in commercial real estate. A report put together by ULI and PwC talks of a a smaller real estate industry, lower returns and a dearth of new development.
CBL & Associates dips its toe into outlet center development. Other mall owners expected to follow suit.
Aeropostale opens a 20,000-square-foot store in Times Square.
Next Page: November
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November
Texas Pacific Group and Leonard Cohen purchase J.Crew for approximately $3 billion.
Republicans gain a majority in the House in the mid-term election, which is likely to result in political gridlock. Is that good news for commercial real estate industry?
October same-store sales rise 1.5 percent, with retailers blaming warm weather for lackluster performance.
Investment sales activity picks up in the third quarter.
Cole Real Estate Investments buys a portfolio of Albertsons stores in a sale-leaseback deal valued at $266 million.
General Growth Properties exits bankruptcy. The industry expects the reorganization to spearhead a recovery in the sector. Later in the month it closes a public offering of 135 million shares at a price of $14.75 apiece. Meanwhile, GGP’s spin-off, Howard Hughes Corp., announces its line up of top executives.
REIT executives proclaim that the crisis has passed at NAREIT conference in New York.
The U.S. Green Building Council unveils designations for LEED Retail and LEED Volume.
The lending market is back and running according to participants at ICSC’s Capital MarketPlace Conference in New York.
Black Friday 2010 delivers respectable results.
Overseas developers experiment with innovative mall designs.
Next Page: December
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December
After failing in its bid to take over General Growth Properties earlier in the year, Simon Property Group sets its sights on a new target: Britain's Capital Shopping Centres.
Simon, which already owns a stake in Capital, first challenges Capital's proposed acquisition of the Trafford Centre. It sends a series of letters and then offers $4.8 billion for the company. Capital rejects Simon’s bid. British regulators give Simon a deadline of Jan. 12 to come up with a legitimate offer.
November same-store sales come in strong, growing by about 6 percent. The results boost expectations for the holiday shopping season.
GGP CEO Adam Metz, president Thomas Nolan leave the company post reorganization.
Vestar Development and Rockwood Capital buy out Arizona’s Tempe Marketplace from a business partner for $280 million in what may be the largest single-property retail transaction of the year.
Charter Hill Retail REIT sells a 60 percent stake in its U.S. portfolio to Desco Group and Regency Centers for $168 million.
Mall owners get savvier about instituting teen curfews at their properties.
Retailers compete with real estate investors for big box assets.
Inland, Centro subsidiaries form a joint venture to invest in shopping centers.
The industry forecasts more store openings and fewer closings in 2011.
The mood turns positive at ICSC’s New York conference in December.
Borders’ shareholder Bill Ackman proposes a merger between his chain and Barnes & Noble.
We take a stab at comparing three major commercial real estate indexes and how they work.
Mall of America owner Triple Five Group signs an agreement to take over Xanadu Meadowlands in New Jersey.