Shopping Centers Today

APR 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

Issue link: http://sct.epubxp.com/i/479929

Contents of this Issue

Navigation

Page 7 of 83

T H E C O M M O N A R E A 8 S C T / A p r i l 2 0 1 5 Saks cashes in on real estate Hudson's Bay Co., parent of Lord & Taylor and Saks, is teaming up with Canada-based REIT RioCan and U.S.-based Simon to cash in on its considerable real estate holdings. The Toronto-based retailer is looking to the two landlords to help mold its U.S. and Canadian store portfolios into two REITs that will eventually go public, said Richard Baker, executive chairman, on a conference call with investors. "By partnering with industry leaders, we have created two tremendous real estate vehicles for growth," Baker said. "Im- portantly, we have retained the flexibility to create REITs at a future date of our choosing." HBC will contribute 42 owned or ground-leased stores, totaling 5.4 million square feet and valued at $1.7 billion, to a joint venture with Simon that will focus on U.S. properties and acquisitions outside the U.S. and Canada. Simon will contribute up to $278.5 million to make improvements to the stores, including possibly retenanting and redeveloping the spaces. HBC will own 80 percent of the venture, and Simon 20 percent. The venture will lease back its properties to HBC under triple-net, 20-year operating leases. The Simon-HBC portfolio includes the Saks Fifth Avenue flagship store in Bev- erly Hills, Calif., and Lord & Taylor stores in New York — in Westchester and Manhasset. But the deal does not include the Saks Fifth Avenue and Lord & Taylor flagships on Fifth Avenue in New York City. Those two jewels remain 100 per- cent HBC-owned, and the firm is considering ways to further develop them, said Baker. Online slowdown The pace of online sales growth slowed in the fourth quarter, according to the U.S. Commerce Department. E-commerce sales grew by 14.6 percent year on year during the quarter, to nearly $79.6 billion, the department reports. This was the slowest rate since the fourth quarter of 2012 and follows two consecutive quarters of nearly 16 percent growth. Terror threats Many professional associations have to deal with crisis com- munications at one point or another. But how many have had a member directly threatened by a terrorist group? This is exactly what happened to ICSC in March, when a Somali group released a video threatening malls in the U.S., Britain and Canada and specifically citing Mall of America, in Min- nesota. The way an association reacts when its members face major problems can be delicate, but ICSC had its plan already in place. And communication was key. The threatening video was released by al-Sha- bab, a Somali terrorist group. ICSC immedi- ately sent a commu- niqué to members of its security committee, made up of the heads of security for member companies, and continued to update them with information from the U.S. Department of Homeland Security. ICSC also released a statement that addressed security at shopping facili- ties. The statement enabled ICSC members to field incoming questions and redirect them to the association, which took at least 100 phone calls about the threat. ICSC does a great deal of work on security issues with its members even when there is no tangible threat. The organization has worked with the Stephenson National Center for Security Research and Training at Louisiana State University to offer online training to security professionals. Roughly 30,000 have participated. The association and the shopping center also play host to an annual meeting of security chiefs. S C T

Articles in this issue

Archives of this issue

view archives of Shopping Centers Today - APR 2015