Shopping Centers Today

MAR 2017

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

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32 S C T / M A R C H 2 0 1 7 for more casual-dining restaurants, family entertainment cen- ters and breweries," she said. Such tenants tend to enhance the overall shopper experience, increase patron dwell time and promote return visits, and restaurants in particular remain exceedingly popular, she says. "Americans now eat out more than they buy groceries, and restaurants offer them both con- venience and the experience they want," Beasley said. Inquiries from retail developers and owners have risen this year, according to Lori Bongiorno, a principal of Co- lumbus, Ohio–based M&A Architects and the director of the firm's commercial studio. "It seems like developers that ha- ven't done open-air mixed-use projects before are eager to do them now," said Bongiorno, who has worked on Penin- sula Town Center, in Hampton, Va.; on Watters Creek, in Allen, Texas; and on Easton Fashion District, in Columbus. "Because the projects are so massive, developers are still a little slower to pull the trigger, but there are more projects in the works." Many of the country's prime open-air centers are trying to land such prominent entertainment or retail anchors as Bass Pro Shops Outdoor World, Legoland or Sea Life Aquarium, and food halls, Bongiorno says. "Today all bets are off — whatever's fun and unique can B ig boxes are a big deal at open-air centers. But investors are growing more wary of buying the property type, fearful that changing footprints for retailers might make a box obsolete, according to John Feeney, vice president at The Boulder Group. The median asking price for a net-lease big-box properties with investment- grade tenants was $8.9 million and $158 per square foot in the fourth quarter, he reports. Cap rates in the single- tenant net-lease big-box sector increased by 42 basis points to 6.5 percent year on year for the fourth quarter. The median asking cap rate for buildings whose investment-grade tenants had leases of 16 to 20 years remaining were 5.2 percent. A good example of the kind of deal getting done: A Home Depot–occupied property in Las Vegas sold for $23.1 million, which translates into $219 per square foot at a 6 percent cap rate. Home Depot's lease on the building is good for six years more. "With changing retailer store formats, investors are paying greater attention to market rental rates and B U Y I N G B O X E S

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