Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/863214
6 S C T / S E P T E M B E R 2 0 1 7 T he country's two largest mall owners are not about to let any retail headwinds dampen their outlook for 2017 after posting strong income growth in the second quarter. At Simon, leasing agents are working harder to do deals, and managers will help troubled tenants restructure leases to strengthen their businesses, executives say. Simon's same-center property NOI growth for the three months ended June 30 was 4.4 percent, and leasing spreads were up by 12.9 percent. "Our apparel now is down to the low-40 percent as an allocation of our GLA," said Richard Sokolov, Simon's president and COO. The firm is bring- ing in more food and service-oriented retailers at lease terms that are com- SECOND-QUARTER LOAN SURGE 8 HEALTH CARE PROVIDES A VACANCY CURE 10 FACEBOOK BOT IS A HIGH- TECH MALL CONCIERGE 12 T H E C O M M O N A R E A N E W S F R O M A LL C O R N E R S O F T H E S H O P P I N G C E N T E R I N D U S T R Y parable to those of apparel retailers or better, he says. Among the brands Sokolov cited are B8ta, Flying Tiger, Indochino, Nespresso, Peloton Cycle, Tommy John and UntuckIt. Meanwhile, GGP has decided not to sell any part of its valuable portfolio of malls, after entertaining the possibility publicly earlier in the year, CEO Sand- eep Mathrani told analysts on the firm's second-quarter earnings call. "We did a paper analysis," Mathrani said. "We did not start a marketing process. The in- bound call from institutional investors was very high to buy the best-quality assets for the cap rates we mentioned, but we did not feel it was appropri- ate to sell 'A' assets with the highest growth just to print a value. The board decided we'd better stay the course." GGP will focus instead on mak- ing the top end of its portfolio more valuable by adding space and new uses, Mathrani says. The firm may also bring in venture partners in some developments. "We felt that to get the maximum value for the shareholders, we should continue down the path of continuing to densify these assets and make them more live-work-play — as we've done in Ala Moana and are looking to do in various markets like metro Chicago, metro Denver, metro New York and metro Seattle. And so we felt that there was a lot of meat on the bone that the board didn't want to leave on the table." At GGP's properties, same-center NOI increased by 0.7 percent in the second quarter, despite store closures Strong second quarter boosts REITs' outlook By Brannon Boswell Shops at Merrick Park, Coral Gables, Fla.