Shopping Centers Today

OCT 2018

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

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36 S C T / O C T O B E R 2 0 1 8 loan due in October 2019, as well as some major lines of credit due in October 2020. "We have really been focused on extending our maturity schedule and making sure WKDWZHKDYHWKHOLTXLGLW\DQG¿QDQFLDOUH- sources to execute on our redevelopments," Reinsmidt said. "We have made a lot of progress toward these goals, which will provide stability and growth in the future." Moving forward, new and nontraditional uses will continue to play a bigger role in the portfolio, Lebovitz predicts. "Our busi- ness is different today, there is no question about it," he said. "But we're seeing a lot of energy and enthusiasm by categories that were not traditionally part of regional malls. It's refreshing. We're morphing our properties into suburban town centers. Over the long term, we'll have more success as a direct result." ACQUIRING Traditionally focused on grocery-anchored shopping cen- ters in the Midwest, ShopOne is branching out geographi- cally. The privately held company aims to ramp up the pro- ductivity and value of its portfolio by making acquisitions along the Eastern Seaboard and across the Western U.S., according to CEO Michael Carroll. "We are very focused on growing our footprint as a grocery-anchored owner and operator," he said. Over the past year or so, New York City–based ShopOne has acquired centers in California, Florida, Georgia, New Jersey and elsewhere. In August the company entered the Nevada market with its acquisition of Caughlin Ranch, a 113,400-square-foot center in Reno that is part of the Caughlin Ranch master-planned community. While the asset could be considered in the 'A' class, ShopOne bought it from a special servicer of troubled commercial real estate ORDQVDWDVLJQL¿FDQWGLVFRXQW&DUUROOVD\V7KH5(,7 has already increased occupancy at that center by a few percentage points, to 91 percent. $PRQJWKH¿UVWVWHSVLQWKH6KRS2QHYDOXHDGGVWUDW- egy was to replace Scolari's Warehouse Markets with the higher-performing Raley's grocery anchor. The one-mile trade area comprises some 2,600 households with a median income upwards of $112,000 per household yearly. "In the case of Caughlin Ranch, we really felt that this asset was mispriced, that its true value wasn't understood in the market," Carroll said. "We were able to act quickly and do something creative and smart at a well-located property." In adding to ShopOne's 50-property portfolio, the company sometimes buys shopping centers outright, but its acquisitions team has developed expertise in working with special ser- vicers, says Carroll. "Those servicers want you to do a lot of work in advance and to understand assets with a limited amount of time for due diligence," he said. "Our team on the ground really understands our markets and is able to do that. It allows us to be a step ahead of the competition on these types of transactions." As with others in the grocery-anchored sector, ShopOne is boosting productivity by signing on such fast-expanding retail tenants as Burlington, HomeGoods, Marshalls, Ross and T.J.Maxx. "Clearly, off-price is the offering that has resonated with consumers," Carroll said. "It is driving a lot of store growth as well as store repositioning and remod- eling. These are the shining stars of big-box retail today. Their [comparable-store] sales growth can run into the low double digits, which is impressive." On the grocery front, ShopOne is also signing deals with specialty operators like Fresh Thyme Farmers Market, LQWKH¿UP¶V0RQURH6WUHHW3RUWIROLRFROOHFWLRQRI2KLR properties, and Organic Roots, which is coming to McKin- ley Crossroads, Corona, Calif. This will be the second location for Organic Roots, which began operating in 1989 in the Temecula Valley. Fast-casual restaurants are com- pany growth drivers too, Carroll says, citing Burgerim, which opened in July at The Trails, in Ormond Beach, Fla., as well as mainstays Chipotle Mexican Grill and Jimmy John's, both of which are new to ShopOne's Barberton (Ohio) Shopping Center. DEVELOPING The title of the Kimco Realty strategic plan — The 2020 Vision — suggests a focus on the future, but CEO Conor C. Flynn says the three pillars of that strategy are driving results even in the here and now. The 2020 Vision plan, rolled out in December 2015, hinges on ramping up the quality of Kimco's 460-property portfolio, unlocking the value of existing assets and strengthening the balance sheet. The results of these efforts were visible in July, when the REIT posted second-quarter earnings. "If you look at our occupancy, for example, we're nearing all-time highs," said Flynn. Indeed, the Kimco portfolio's pro rata occupancy (the ratio POSIT IONED FOR GROW TH MICHAEL CARROLL

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