The Rich Get Richer

We all know that 2004 was a big year for retail real estate. But it turned out to be particularly good for many of the nation's biggest retail REITs. That's among the take-aways from Retail Traffic's annual ranking of top owners and managers, appearing in the April issue. The issue, which is in the mail this week, ranks the Top 75. Here are some of the highlights -- and some analysis that you won't find in print.

The continuing consolidation of mall companies reshaped the top of our list. The 10 leaders expanded their portfolios 20 percent from 2003. As of Dec. 31, they controlled more than 921 million square feet of retail space, up from 768 million square feet from 2003. Looking back further, the amount of real estate concentrated in the top companies' hands has nearly doubled since 1997, when the top 10 owned 484.5 million square feet.

The growth of some individual firms was startling as well, thanks mostly to acquisitions. Simon Property Group remains No. 1, but after four years with a relatively stable portfolio ranging between 184 million and 190 million square feet, its purchase of Chelsea Property Group sent it over the 200 million-square-foot mark. At the same time, its lead over No. 2 General Growth Properties shrunk. General Growth has ranked second every year since 1998, but in that time has expanded its portfolio from 71.5 million square feet to 180 million square feet. It bought Rouse Co. last year. Overall, General Growth increased in size by 48.8 percent in one year.

Developers Diversified Realty, this year's No. 3 at 107 million square feet, nearly doubled its holdings from 2003 following the purchase of a portfolio from Benderson Development Co. It grew a whopping 97.8 percent over the previous year. In fact, Developers Diversified is now larger than Simon Property Group was seven years ago. Kimco Realty Corp. is also closing in on nine figures (90.4 million square feet) and Inland Real Estate Group, which wasn't even in the Top 10 in 2002, has more than 88 million square feet of shopping center space. CBL & Associates Properties Inc., Westfield America Inc., The Macerich Co. and New Plan Excel all returned to the front of the list. Mills Corp. cracked the Top 10 for the first time, with 47 million square feet.

The biggest jump in the top 30 of the owners list was made by Casto, which moved up 7 slots from 25 to 18. The disappearance of top 20 firms like Benderson, Rouse and Chelsea helped Casto move up, despite the fact that Casto only added 1.8 million square feet to its portfolio from 2003 to 2004. Other big movers in the top half of the list were Garden Commercial Properties, which jumped 6 places, and Developers Diversified and Regency Centers, which each moved up 5 spots.

Lower down the list, SR Weiner & Associates Inc. jumped 12 notches from 39 to 27 and Vestar Development moved from 41 to 28. Those firms each grew their portfolios by about 15 percent and also benefited from the elimination of firms in the top half of the list.

On the manager's side, two firms -- CB Richard Ellis and Urban Retail Properties -- were able to grow their portfolios considerably. CB Richard Ellis jumped from 59.6 million square feet to 79.7 million square feet, moving from 8th to 6th on the list. Urban added 10 million square feet, upping its managed portfolio to 40 million square feet, which upped its ranking from 16 to 12.

Rankings:

---David Bodamer