Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/62026
THE BOTTOM LINE Simon's European adventures Simon Property Group showed renewed interest in Europe in March when it paid $2 billion for a 28.7 percent majority stake in Paris-based landlord Klépierre. Simon had scaled back its European footprint in recent years, selling stakes in French and Polish properties in 2010 and cashing out of an Italian venture in 2011, after a failed $4.5 billion bid for British landlord Capitol Shopping. Although Simon says it does not plan to buy any more Klépierre shares, it does expect to boost revenues at Klépierre's 271 centers throughout Europe by sharing its sponsorship and technology savvy and its list of U.S. tenant contacts. $36 Retail sales volume by price $20M+ 27 $10M–$20M $1M–$10M 18 Chapter 11 as negotiating tool? 9 0 '00 100% 80 60 40 20 0 '08 '09 '10 '11 SOURCES: MARCUS & MILLICHAP, REAL CAPITAL ANALYTICS, COSTAR GROUP User/Other Foreign Equity Fund Institutional Public/REITs Private '01 '02 '03 '04 '05 '06 '07 '08 '09 Retail buyer composition '10 '11 American Asset Corp. got a lot of attention when it placed nine commercial properties into Chapter 11 reorganiza- tion in March. The goal was to restructure existing loans with Bank of America, American Asset says. "Chapter 11 is the only way, in the absence of a consensual agreement with the bank, to be able to put the necessary new money in the property to finish the original leasing plans and seek conventional financing," said Riprand Count Arco, CEO of American Asset. "This seems like a weapon of last resort, but if more borrowers encounter intransigence, they could use this strategy to try to restructure loans on assets they would prefer to con- tinue to own," said Ryan Severino, an economist at Reis. More bankruptcies are likely, industry insiders say. Since 2008 some $64.2 billion worth of retail properties fell into trouble, according to Real Capital Analytics. "While we can debate whether that is an appropriate or ethical business practice, widespread modifications have hurt enforceability of contracts," said Sam Chandan, presi- dent and chief economist of Chandan Economics. "In that context, it is not surprising that borrowers view com- mitments as open for negotiation." Deal Barometer WHO IS PAYING HOW MUCH FOR WHAT DEAL OF THE MONTH $14 million Katz Properties, of New York City, bought the 189,218-square- foot Hannaford Plaza, Utica, N.Y., from Hannaford Station Inc. $22.2 million New York City– based American Realty Capital bought the 105,861-square- foot Liberty Shopping Center, in Rowlett, Texas, from Direct Development $47 million Cole Real Estate Investments, of Phoenix, bought the 270,000-square- foot Fairlane Green, in Allen Park, Mich., from an undisclosed seller $50.6 million Inland Diversified bought the 775,000-square- foot Shoppes at Branson Hills, in Branson, Mo., from Raul Walters Cos. $289.4 million Glimcher Realty bought an 80 per- cent stake in the 1 million-square- foot Pearlridge Center, Honolulu, from affiliates of Blackstone Real Estate Partners VI $630 million ING sold its 77 percent stake in the 713,000-square- foot Zlote Tarasy mall, in Warsaw, Poland, to a fund managed by AXA Real Estate and CBRE Group $1.85 billion The Canadian Retirement Investment Fund bought 45 percent of a 12-mall, 13.5 million-square- foot portfolio from Westfield Group. All but two of the malls are in California 250 SCT / MAY 2012 Percent of total $ billions