Shopping Centers Today

MAR 2015

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

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s b r o a d e x p a n s e s o f C H o I C e r e t a I l r e a l estate grow ever scarcer, landlords are seeking growth solutions higher up — specifically, on their own rooftops. from dining decks to public gathering spaces, and from cell towers to solar pan- els, property owners are turning to their once-barren roofs to add new dimensions and new revenue streams. "shopping center roofs are no longer just places where you plunk down 300 HVaC units," said Michael Hirschfeld, co-leader of Jll's national retail tenant services group. "roofs have unlimited and untapped potential." A HIGHer InCoMe landlords are harnessing their rooftops to boost profits By Steve McLinden M a r c h 2 0 1 5 / S C T 33 I l l u s t r a t I o n b y e V a V a z q u e z some of these uses are unconventional indeed. the owners of one shopping center in the u.K. are making plans for a theme park on the roof, notes Hirschfeld. In the u.s., a redeveloped retail site at the south street seaport, in new york City, will yield roughly 1.2 acres of rooftop space for concerts and similar public events. by far the most prevalent use for shopping center roofs is industrial: to wit, the telecom cell tower. "that market continues to expand with the rapid growth in cell-phone use, and there's a drastic need for new and existing sites," said Hugh odom, president of nashville, tenn.–based Vertical Consultants. "that's where owners have a huge opening to create more value." When Verizon, at&t; or some other carrier contacts a shopping center for possible tower placement, the worst thing any owner can do is to consider such an offer "found money," odom says. "Cell-tower leases shouldn't be treated like basic real estate transactions based on sales per square foot," he said. "every site has a different value, and if you don't understand that and structure these like utility leases, you're going to get underpriced." an owner may actually lose money in the long run if a tower lease hampers its ability to expand or tear down a structure, ac- cording to odom. landlords typically use real estate attorneys, who are inexperienced with such deals, says odom, who is a former telecom lawyer himself. "When I was on the other side of this, we loved it when big [mall-retained] laws firms started to negotiate deals." negotiations must account for both the value to the carrier and the downside

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