Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: http://sct.epubxp.com/i/479929
T H E C O M M O N A R E A SAKS CASHES IN ON STORES, ONLINE SHOPPING SLOWS, MALLS REACT TO TERROR THREATS 6 S C T / A P R I L 2 0 1 5 A strip center comeback? Now, five years on from this past recession, there is quan- tifiable improvement on the strip-center end of the retail marketplace, including neighborhood and community centers, observers say. Last year, strip-center rents on a national basis rose by 2 percent, according to New York City–based real estate data firm Reis. This may be interpreted two ways. Investors can be cheered that strip-center rents are finally improving, or they can despair that rents are only staying abreast of inflation. "Rents are taking their sweet time to come back," said Ryan Severino, a senior economist at Reis. "In the past, rents have come back more quickly after a recession, but the marketplace has become a lot more fragmented — with the growth of online sales and the proliferation of other retail subtypes." Everything is relative in the data. Though 2 percent is hardly something to party about, it does represent the market's fastest pace of growth since 2007, says Reis. The same holds true for the vacancy rate, which fell to 10.2 percent last year. That was the best such national rate since 2008, but, as Severino notes, those numbers are still elevated when one considers that 6 percent to 8 percent is the norm during stronger economic periods. If Severino appears tepid about the strip-center market, Teri Young, a senior vice president at Inland American Retail Management, Oak Brook, Ill., feels like a shopper heading to a President's Day sale. With vacancies down and leasing up, "the activity that we are seeing is exhilarating," said Young. "We're running out of space." The activity is spread across the entire Inland American portfolio, with improved activity at all levels of stores, from large boxes to smaller shops. "We had ex- perienced the same lag as everyone else did," Young said. "But we've turned the corner." Wage hike TJX says its U.S. hourly workers will earn at least $9 per hour starting this summer. And sometime during 2016, all hourly U.S. store associates employed for at least six months will earn at least $10 per hour, the company says. TJX's move comes a week after Walmart announced its own wage hike for U.S. store associates. "This pay initia- tive," said CEO Carol Meyrowitz, "is an important part of our strategies to continue attracting and retaining the best talent in order to deliver a great shopping experience for our customers, remain competitive on wages in our U.S. markets and stay focused on our value mission." Lightening the load Brixmor's lighting bill has gotten a whole lot lighter of late. The company installed LED lighting at 39 of its properties last year, which cut total energy usage by 68 percent — a reduction of 6.1 million kilowatt hours annually. The electricity saved is equivalent to annual carbon emissions from the electricity consumed in 585 homes, or the greenhouse gases emitted in 10 million passenger- vehicle miles, according to Brixmor. The company says it has plans for a similar upgrade in at least 29 additional properties this year.