Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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8 S C T / A P R I L 2 0 1 7 T H E C O M M O N A R E A O pen-air center REITs reported strong net operating income growth, thanks to positive leasing results for 2016. Many achieved these results despite tenant bankruptcies that left some with empty anchor stores to refill. "The tenant bankruptcies in 2016 were indicative of specific retailer obsolescence and not predictive of a chronic trend," said Steve Grimes, chief executive of RPAI, on an earnings call with investors. "Retailers file bank- ruptcy. It's part of the business, and that's why we continue to play offense with at-risk categories and proactively take back space and re-lease it to rele- vant, more-dynamic retailers that are better positioned to drive sales and ex- perience at our highly regarded assets." RPAI posted same-center NOI growth of 3.5 percent for the year. For its part, Brixmor reported a 2.5 percent increase in same-center NOI for 2016. The firm attributed its success in part to a strategy that broadens its expo- sure to such growing tenant segments as movie theaters and other entertainment, fitness chains and restaurants, accord- ing to CEO Jim Taylor, speaking on an earnings call. "In 2016 we executed ap- proximately 900,000 square feet of new leases with tenants in these categories, up nearly 20 percent compared to the past three years," Taylor said. "We don't see any fundamental obstacles to a productive 2017," said RPAI's Grimes, "outside of our lack of detail with respect to the agenda of the new administration and the collective angst of the real estate veterans, remind- ing us that the cycle is getting lengthy." Meanwhile, Regency Centers is busy developing new centers and re- developing existing ones to stay ahead of changing tenant fortunes. The firm reported a same-center NOI increase of 3.5 percent for 2016. Regency's blended rental rate increased by 11.3 percent for the year. The company, which doubled in size after acquiring rival Equity One last year, also has a robust new development and redevel- opment pipeline valued at upwards of $300 million going into 2017. The firm announced it has already broken ground on a new ground-up develop- ment in Chantilly, Va. Called The Field at Commonwealth, with estimated net development costs of $44.5 million, it will occupy nearly 180,000 square-feet anchored by a 120,000 square-foot Wegmans Food Market. Completion is set for 2018. n Wegmans will anchor Regency Centers' The Field at Commonwealth Retail closures do not slow open-air center REIT growth Onward and upward $163 million InvenTrust Properties bought Westfork Plaza and Paraiso Parc, adjacent centers in Pembroke Pines, Fla., from DRA Advisors and Woolbright Development D E A L B A R O M E T E R W H O ' S P A Y I N G H O W M U C H F O R W H A T $7 million Sperry Equities bought Village at Augusta Ranch, a 25,200-square- foot shopping center in Mesa, Ariz., from Gilligan Augusta Ranch $15.6 million Village Greens SC LLC bought the 44,600-square- foot Village Greens of Annapolis (Md.) from Basin Investments. Tenants there include Capital One, Celebree Learning Center and CVS $17.5 million Decron Properties sold Flamingo Maryland Shopping Center, a Target- anchored retail center near the Las Vegas Strip, to an undisclosed buyer $18.4 million Broad Street Realty bought Giant- anchored Cromwell Field Shopping Center, in Glen Burnie, Md., from Klein Enterprises $28 million Store Capital acquired a portfolio of 14 net-leased Wing House restaurants in central Florida, totaling 89,300 square feet, from an undisclosed seller $59 million Macy's sold its downtown Minneapolis store. The new owner, 601W Cos., plans to convert the building into a mixed-use property O P E N - A I R C E N T E R S