RT: How concerned should the industry be about the decline of the middle class?
The industry should be very concerned. The middle class is getting squeezed. Costs are increasing. If you just look at health costs, expenses day-in and day-out, housing, etc., it speaks for itself. As a result, this has to squeeze on discretionary income. People are going to spend less, so it will have more of an impact on the necessities and less on frivolous items. The other thing is that globalization has taken its toll relative to the squeeze. Things produced abroad are much cheaper than in the United States. Outsourcing is a reality. If you take a real look at job figures, how many new jobs are in the service industry? How many people are still vulnerable? How many jobs out there are sustainable jobs?
RT: Should industry leaders be addressing this economic problem?
We need to get some real thinking involved in this. If you look at the problem from this perspective, that the shopping center industry really touches every community in this country, we need to be in partnership with government entities all the way down to the smallest villages. We've got to go into these markets, sit down with leadership and say, “We both have a vested interest in making things happen in a prudent manner and this is a concern.” I've been preaching the same thing on the issue of poverty. Poverty in this country is a very real concern.
RT: Urban Retail has had quite a bumpy ride the last few years, going through mergers, being a subsidiary, and now finally once again an independent company. What's next?
We're approaching 40 and we've morphed so many times into a different variety of vehicles. But at the core we've always been development-based. Even when were owned by Westfield, Simon and Rouse and then General Growth, and were not allowed to acquire and develop, we kept that competency in house. In Las Vegas you'll see from us six new ground-up developments that we have announced. We've also got a major joint venture with a Hollywood film studio to do all their global work. By virtue of the partnership forged, you'll see thinking outside the box from our perspective.
RT: How would you like people to view Urban Retail as a company?
We're wholly-owned and independent again. We have a wealth of history in development and third-party management in all asset classes. We can do vertical mixed use, like with Copley Place and Water Tower. If you go back to the definition of lifestyle centers I think we had a hand in facilitating something that's become commonplace when we built Old Orchard and Oak Brook. We're multifaceted, nimble, very smart, and have the ability to acquire, lease and manage. We are also very socially conscious and think we have responsibility to act on that.
RT: What will the shopping center of the future look like?
I think it will evolve into the new town square, with a new sense of space. It will be the central business district with a good demographic profile that caters to all. It really has to take into consideration where the center of gravity in a community is and sustain and grow and change and deal with the competition it's up against as time passes. All attributes should be there. It should go beyond retail to service. It should establish a place that sustains itself in terms of design and is really built into the fabric of the communities. That's what the shopping experience of the future will be.
Chairman and CEO of Urban Retail Properties Co.