Regional mall owner Starwood Retail Partners has a new CEO—REIT industry veteran Michael Glimcher. Glimcher, who spent 27 years, including 12 as CEO, at Glimcher Realty Trust, will now be responsible for running Starwood Retail’s portfolio of 30 malls and lifestyle centers.
The company is a division of global real estate investment firm Starwood Capital Group, run by noted investor Barry Sternlicht. Starting in 2012 and continuing through 2016, the company had been assembling a sizeable mall portfolio, buying assets from operators like the Westfield Group (it has since been trying to dispose of some of those malls, according to Bloomberg).
Glimcher resigned from his previous position last year, after Glimcher Realty Trust merged with Washington Prime Group and formed a new REIT entity. He referred to the SEC filing about his resignation when asked about the reasons for his departure, declining to go into detail. The filing states that Glimcher and the REIT’s board of directors had no dispute, and simply had “differing views as to the strategic direction of the company.”
NREI recently spoke with Glimcher about his new position, his outlook for the retail real estate sector and where he envisions taking Starwood Retail Partners. This interview has been edited for style and clarity.
NREI: How did the opportunity with Starwood Retail come about?
Michael Glimcher: I heard from an industry friend that there was an interest in having a conversation and for me the opportunity to work with such a great organization and a visionary leader like Barry Sternlicht was really exciting. I’ve never met him before and I took the time to meet him and it got me excited about the company.
NREI: What in particular appealed to you about working with Starwood and Sternlicht?
Michael Glimcher: I was really impressed with the group of assets they had put together, and with what the opportunity was to take them forward, and with [Barry Sternlicht’s] historic track record. Great assets, well-located, smart people—for me, the combination of all those things was very exciting.
NREI: Starwood Retail is part of the larger Starwood Capital organization. How much freedom will you have taking the company in the direction you want and what is your vision for its future?
Michael Glimcher: For the first question, I am the CEO, so I am running the organization. It’s no different than a public company; we have investors, who are our shareholders. We are really here to serve the owners.
The vision is really about densification, opportunities to add other uses to the sites—anywhere we can add hospitality, we can add apartments, entertainment, food. We are trying to think as much like a mixed-use platform as possible, [rather than simply a mall] platform. We are heavily focused on food and entertainment. It’s not necessarily us doing those things, but finding other developers to partner with us who want to build on our sites and add to our density.
NREI: This is a challenging time for the retail real estate sector in general, with a lot of store closings and bankruptcies. How do you plan to cope with those challenges?
Michael Glimcher: There are headlines and then there’s reality. Our properties are mostly full. The demographics of our assets are really good, we are in great markets, we own great real estate. Not just malls, we own great real estate, and every site is really unique. We are looking to add opportunities to these.
Part of it is consolidation of space. We are adding big-box retail—we are adding a number of sports retailers, we are adding a number of H&Ms, we’ve added a number of Planet Fitness locations. We are eating a little of the in-line space with other uses. Our malls are mostly full, so if we can absorb 10-15 percent of the space into big-box and entertainment uses, then the rest of the retail fills up the rest of the space.
In general in the industry, you are seeing more junior anchors, you possibly will see fewer department stores, and you will see other uses. We think our properties—they are well-located, they have great infrastructure and roads in place. Everything we are doing is really exactly where we see things going in the future. If we lost a tenant, we don’t see it as a challenge, we see it as an opportunity. We haven’t lost any anchors.
NREI: Do you foresee any major acquisition/disposition campaigns in Starwood Retail’s future?
Michael Glimcher: For me, in the short term, my focus is really inside our four walls. My focus is on taking care of what we have. There is a lot of opportunity and a lot to mine from what we have. I’ve only been here two months. Buying and selling is really not on my radar right now.
NREI: Are there any significant differences between running a publicly-traded REIT vs. a privately-held company?
Michael Glimcher: The mission is to make the assets better and to make them more valuable. It’s really in that way, the same job.