Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/827208
J U N E 2 0 1 7 / S C T 11 for 509,000 square feet to dynamic retailers, and [we] opened 41 new tenants," said CEO John Kite. Cash rent spreads on new and renewal leases executed in the quarter were approximately 45.5 percent and 4.7 percent, respectively. And with 4.3 million square feet of new leases, renewals and options completed during the period, Kimco Realty says the first quarter of 2017 generated the highest leasing volume of any quarter in the past 10 years. Rental rates increased by 10.9 percent during the quarter, while same-center NOI grew by 2.2 percent. n l Simon's first-quarter leasing spread rose by 13 percent. Same- center NOI growth was at 3.8 percent. CEO David Simon said a number of Internet pureplay retailers are reaching a point where they must open stores or stagnate. "They will not be able to really sustain their business model, in my humble opinion, unless they have a physical presence," he said. l Federal Realty generated same-center NOI growth of 4.3 percent for the first quarter. The leasing spread was up by 11 percent. "All the space that's either on the market today or believed to be coming to market, it clearly moves leasing leverage to the tenant from the landlord in many situations," president Donald Wood said. "That shift manifests itself in negotiations that hurt in three ways: more tenant capital, more-favorable deal terms for the tenant, and more timing to get the deals done." l Macerich's re-leasing spread climbed by 17.5 percent during the first quarter, and same-center NOI rose by 2.2 percent. "I see bankruptcies as being a blessing in disguise because it takes a tenant who is occupying a space and producing no business and gives us back that space earlier than the normal expiration of the term," said Chairman and CEO Arthur M. Coppola. "So that we can go in and do what we do every day, which is to take space and to recycle it into more up- to-date ideas and uses and concepts." l Kimco's leasing spread was 10.9 percent during the first quarter, helping to drive up same- center NOI growth by 2.2 percent. "While retailer weakness is dominating the media, many retailers, a majority of them our tenants, are thriving," said CEO Conor Flynn. "Of our top 20 tenants, seven have recently hit all-time highs in their stock price, and many have large new store-opening plans. For example, TJX, Ross and Burlington in aggregate have announced expansion plans in excess of 300 stores." l DDR said same- center NOI declined by 0.1 percent in the first quarter. The leasing spread was at 2.8 percent on new leases and at 6.3 percent on renewals for the period. "We're currently prioritizing balance- sheet repositioning over investing, so that we can ultimately buy assets in a potentially thin investor pool. Number two, we're cash-flow-focused," said CEO David Lukes. "Our main goal is to generate actual returns on retail real estate over a reasonable time period. Gone are the days where one can buy an asset simply because it produces a higher average ABR, better overall demographics or short- term noncash FFO accretion." l RPAI reported a 2 percent increase in same-center NOI for the first quarter and a leasing spread of 10 percent. "The world is not worse off without HHGregg," said CEO Steve Grimes. "The company could no longer compete or bring any unique value to the marketplace and is now extinct. That's normal disruption in our mind." l CBL said same- center NOI for the first quarter slipped by 1 percent. Its leasing spread was up by 2 percent. "We faced a challenging retail environment in the first quarter, which impacted our NOI results," said President and CEO Stephen D. Lebovitz. "However, leasing demand remains strong, and we are making major progress on our anchor redevelopment program." president and CEO, on an earnings call with investors. "We obviously are concerned that further bankruptcies in terminations could impact us, depending on the timing and the size," Alexander said. "But we still see many retail categories expanding. We recently leased to pet stores, home- improvement stores, fitness facilities, discount clothing stores, arts-and- crafts stores, supermarkets, furniture stores, cellular stores, medical services, full-service restaurants, quick-serve restaurants and more. We executed 89 new leases and 214 renewals during the first quarter. This is about the same as we've completed over each of the previous three quarters." Weingarten has seen an uptick in leasing since the quarter's end, Alexander says. "In April we signed a lease with Marshalls and the former Sports Authority box," he said. "We had seven Sports Authority boxes terminated. As of today, four of those are leased, and we're actively negotiating committee-approved leases in the remaining three." Kite Realty Group, meanwhile, reported a 3.1 percent increase in same-center NOI for the quarter. "We executed 80 new and renewal leases FROM THE HORSE'S MOUTH What retail REIT executives said about the performance of their firms in the first quarter