In the news
Santa Monica, Calif. — California's energy crisis has prompted The Macerich Co. to institute low- and no-cost conservation efforts at its properties in the state. The developer is reducing electrical consumption by 5%-6%, which should free up enough energy to power 552 California homes for one year.
Through its long-term plan, Macerich is committed to increasing efficiency at its more than 40 regional malls across the United States by an average of 15%. The majority of Macerich's air conditioning units will be replaced with high efficiency units.
With these energy-saving enhancements, Macerich anticipates generating an annual minimum savings of 30 million kilowatt-hours.
New York — The current economic slowdown has not dampened the red-hot rents on Madison Avenue. Locally based Sonnenblick-Goldman Co. recently brokered the $22.7 million sale of a 5,167-sq.-ft., ground-level retail space at 777 Madison Avenue and 66th Street. The seller was a Japanese investment group led by Mitsui Real Estate and the buyer was locally based, privately held Friedland Properties. The space, whose sale price breaks down to $4,400 per sq. ft., is occupied by a cluster of luxury tenants including jeweler Fred Leighton, lingerie boutique La Perla, shoe retailer Charles Jourdan and cashmere shop David Berk.
Washington, D.C. — NAREIT has expressed its support for U.S. representative Clay Shaw's (R-FL) effort to shorten the depreciable life of tenant improvements to 10 years. Shaw was joined by 64 co-sponsors in introducing the legislation — H.R. 1030 — earlier this year.
NAREIT President and CEO Steven Wechsler says, “By abbreviating the depreciable life of tenant improvements from 39 years to 10 years, the measure would enable property owners to more easily adapt to the specific floor-to-ceiling needs of new occupants.”
According to Wechsler, commercial leases now average less than a single decade, not four. “Shortening the cost recovery period to match the actual life span of the improvements makes more sense economically. Small businesses, in particular, would benefit because they tend to turn over rental space more frequently than larger companies.”
Markham, Ontario, Canada — Markville Shopping Centre was the setting for Toronto-based developer Cadillac Fairview's unveiling of its new VIP shopper program, “embarq.” This service provides a luxurious private cafe, a lounge and a daycare center for members of the program, who pay approximately $95 per year for privileges. Cadillac Fairview plans to roll the program out to 10 of its centers during the next two years.
Lyndhurst, N.J. — Arlington, Va.-based developer The Mills Corp. is up against some tough foes in the fight to develop its proposed 2.1-million-sq.-ft. mega-mall in New Jersey's Meadowlands. At a recent meeting of the Hackensack Meadowlands Development Commission Environmental Center, acting New Jersey Gov. Donald DiFrancesco asked Mills to withdraw its development plans.
DiFrancesco argued traffic congestion and potential flooding make the project inappropriate for the 90 acre tract for which Mills has permit applications pending. He says his intent is to preserve 206 acres of wetlands that Mills would fill under its current site plans.
Though the U.S. Environmental Protection Agency and the U.S. Fish & Wildlife Fund have joined forces in opposition to the project, the mall does have its defenders. According to ardent supporters at the Meadowlands Regional Chamber of Commerce, the proposed project would bring 7,500 construction jobs and 1,500 permanent jobs to the area and would produce $78 million in state, local and county taxes per year. Mills has stated it will not withdraw its permit applications, but has agreed to meet with DiFrancesco to explore alternative sites.
Ridgewood, N.J. — According to a national telephone survey of more than 1,000 consumers, locally based MOHR Learning found more than 20% of customers walk out of a store without making a purchase and an equal number stop shopping there altogether when they experience poor customer service. Moreover, 26% tell their friends about the experience and urge them not to shop at the store.
“Retailers need to recognize the less visible impact of bad service in the quiet erosion of their customer base,” says MOHR Learning CEO Michael Patrick. The EXCEL Omnibus Survey was conducted by Media, Penn.-based International Communications Research.
Retailer roundup
London — European department store giant Marks & Spencer has announced plans to sell its Brooks Brothers chain. As part of the beleaguered retailer's restructuring program, locally based Marks & Spencer is limiting its operations to the United Kingdom, closing its continental European stores, eliminating its catalog business and laying off almost 4,500 employees. Marks & Spencer purchased Brooks Brothers, which operates 80 stores and 72 factory outlets in the United States, from Allied Stores in 1988.
San Francisco — Gap Inc. recently promoted Gary Muto to president of the company's Banana Republic division. Muto will report to Gap president and CEO Millard Drexler. Muto, who previously held the position of executive VP of merchandising at Banana Republic, will oversee all aspects of running the brand.
Troy, Mich. — Kmart Corp. is embarking on a new marketing initiative designed to bolster sales and increase in-store excitement. The linchpin of the new initiative is the revival of the retailer's legendary “blue-light specials.” The revamped blue-light specials, which consist of spur-of-the-moment, limited-time discounts on specific brands and merchandise categories, will be conducted daily in all of the Kmart's 2,109 stores and on its website at bluelight.com. The mass merchandiser first introduced the blue-light concept in 1965, and discontinued the sales in tool in 1991.
“The blue-light special and the phrase, ‘Attention Kmart shoppers,’ have become part of American pop culture,” says Brent Willis, Kmart's executive VP and chief marketing officer. “We are taking the heritage of value the blue light represents for consumers across the country and repurposing it for a new market and mindset.”
Columbus, Ohio — Intimate Brands is rolling out a new store concept — Victoria's Secret Beauty — in 35 new markets this year. The chain has already converted 20% of its existing cosmetics and fragrance stores to the new format, which averages 2,000 sq. ft. and is based on the prototype store that opened late last year in New York.
New York — American Eagle Outfitters, the casual apparel retailer plans to open 73 more locations by the end of 2001, bringing the chain-wide total to 634. The company has its eye on 1,200 mall locations across the United States that fit its demographic requirements.
New York — Gant USA recently opened shop in SoHo, thanks to a deal brokered by Faith Hope Consolo and Joseph Aquino of locally based Garrick-Aug Associates. Gant already leases space on coveted Fifth Avenue, but decided to gain extra exposure with 2,500 sq. ft. on trendy Wooster St. near the Prada and Chanel boutiques. Gant USA, along with apparel retailer Donna Karan, were recently acquired by Paris-based luxury brand cartel LVMH Louis Vuitton Moet Hennessy.
CLARIFICATION
For the March 2001 issue of Shopping Center World's 2001 Top 50 Managers Survey, General Growth Properties should have placed fourth in the ranking. GGP's company listing is included below:
4. General Growth Properties
110 N. Wacker Dr., Chicago, IL 60707
Phone: (312) 960-5000 • Fax: (312) 960-5475
Website: www.generalgrowth.com
Total GLA managed: 126,457,676 sq. ft.
Matthew Bucksbaum, Chmn.; John Bucksbaum, CEO; Bob Michaels Pres./COO; Jean Schlemmer, EVP, Asset Mgmt.; Bernie Freibaum, EVP/CFO; Kevin Moss, CIO, Wally Brewster, VP Corp. Mktg. & Comm.
| Rank & Market | Inventory (Units) | Vacancy Rate % | Under Construction (2000-3) | Forecast Average Annual Net Absorption (SF) (2000-3) |
|---|---|---|---|---|
| 1. Seattle, Wash. | 36,911,000 | 5.8% | 3,895,000 | 854,000 |
| 2. Houston, Texas | 116,500,000 | 7.0% | 11,100,000 | 2,500,000 |
| 3. San Diego, Calif. | 68,150,000 | 6.1% | 5,050,000 | 1,450,000 |
| 4. Portland, Ore. | 35,734,578 | 6.2% | 3,213,828 | 910,000 |
| 5. Minneapolis, Minn. | 48,770,000 | 8.2% | 6,130,000 | 1,770,000 |
| 6. Austin, Texas | 25,858,000 | 9.7% | 4,422,000 | 855,000 |
| 7. San Jose, Calif. | 35,347,000 | 3.6% | 3,708,000 | 789,000 |
| 8. Las Vegas, Nev. | 25,192,710 | 4.2% | 4,880,677 | 3,100,000 |
| 9. Sacramento, Calif. | 32,200,000 | 7.2% | 9,000,000 | 1,276,667 |
| 10. Phoenix, Ariz. | 90,000,000 | 4.5% | 14,500,000 | 3,700,000 |
| (Source: Viewpoint 2001, Integra Realty Resources, Inc., New York) | ||||