Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/331061
8 S C T / J u l y 2 0 1 4 T H E C O M M O N A R E A DDR is out to 'recapture' underperforming space in portfolio DDR Corp. is getting ag- gressive about recapturing underperforming space in its shopping centers for reallocation to stronger tenants. The Beachwood, Ohio–based landlord is looking at regaining some of the space currently occupied by retailers in the electron- ics, book, toy, office supply and traditional department store categories. DDR says it has a pool of market-share-winning tenants it will tap to fill the space, while raising rents as much as 40 percent to meet current market value. DDR has already targeted 90 anchor locations totaling some 3.3 million square feet within its portfolio for this accretive recapture. Of these, DDR has finalized terms to reclaim 21 leases, primarily in Bos- ton; Cleveland; Denver; Phoenix; San Antonio; Orlando, Fla.; and Ra- leigh, N.C. "This initiative demonstrates our ability to create organic growth op- portunities for our best-in- class retail partners, regard- less of current portfolio leased rate," said Paul W. Freddo, senior executive vice president of leasing and development, in a press release. "Recapturing below-mar- ket leases represents an incremental growth opportunity to upgrade asset-level merchandise mix and NOI growth profiles, while simultaneously expanding redevelopment opportunities that will further enhance the quality of our portfolio." Mar- shalls, Nordstrom Rack, PetSmart, Trader Joe's and White House Black Market are among the merchants with whom DDR is in discussions for backfilling recaptured sites. Walmart's Duke addresses growth, 'e-fairness' Wal-Mart Stores continues to expand on all fronts, with plans to open 115 Su- percenters in the U.S. and 30 in China, while also investing heavily in omni- channel retail, top executive Michael T. Duke told RECon delegates in May. The company has two offices in Califor- nia's Silicon Valley and is busy hiring for its Internet operations, said Duke, who is Wal-Mart's chairman of the executive committee to the board. The company is set to invest some $11.4 billion to $12.4 billion in new stores or store re- models worldwide this year. Highlights of this strategy in the U.S. include roughly 200 new Neighborhood Market grocery stores, of which Duke sees the potential for "several thousand" going forward. In addition, there are plans for about 100 Walmart Express stores measuring some 14,000 square feet. Duke envisions the joining together of technology and conventional retail with customer use of smartphones inside stores to comparison shop, order certain items online and then pick them up at a store along with their groceries. The customer wants an "integration of tech- nology and brick-and-mortar," Duke said. "The customer is really changing how they want to shop," he said during a RECon keynote presentation titled "The Future of Retail: Serving Custom- ers at the Intersection of Physical and Digital." Duke also voiced support for so-called e-fairness legislation that would require online retailers to col- lect and remit sales taxes in those states where brick-and-mortar retailers are already required to do so. Not having to collect these taxes enables online retail- ers to charge less for their merchandise, giving them an advantage over physical stores. Legislation to rectify this has already passed the U.S. Senate and is likely to gain approval also in the House of Representatives, Duke predicted. "The states are being penalized," Duke said, as they are missing out on revenue not collected from sales transacted within their borders. "We stand abso- lutely together in that it has to be a level playing field." 6-10_SCT_JUL14_Common Area.indd 8 6/13/14 12:09 PM