Shopping Centers Today International

DEC 2015

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

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14 S C T / D E C E M B E R 2 0 1 5 NEW IDEAS When it's time to shop for new retailing ideas, New York City, where the world's most sophisticated shops abound, is the perfect hunting ground. Several new concepts have opened in Manhattan in recent months: Locally based beauty products chain Ricky's has launched a spinoff con- cept called Hashtag that stocks prod- ucts scouted by owner Richard Parrot on social-media platform Instagram. Two stores are currently operating in the SoHo shopping district. rickysnyc.com The latest fitness trend in New York City is rowing, and several expanding chains are taking advan- tage of the fad. RowHouse, for one, opened a studio in Columbus Circle that was so successful it decided to open another two units this year. rowhousenyc.com Story is an avant-garde, 2,000-square-foot Chelsea bou- tique that reinvents itself six times a year, restocking and remerchan- dizing to fit a specific theme. thisisstory.com Steps help DDR stretch leasing spreads Rent steps, where costs escalate periodically during the lease at a pre-set amount, are an increasingly useful tool for landlords seeking increased profits and for tenants seeking to mitigate risk. Take DDR Corp. for example. In the third quarter, the REIT posted leasing spreads of 12.3 percent and renewal leasing spreads of 7.1 percent. But DDR is manag- ing to stretch the spreads even further with rent steps, according to senior executive vice president of leasing and development Paul Freddo. In the third quarter, 81 percent of all DDR's new leases and 42 percent of re- newals and options contained rent bumps within their initial terms, leading to addi- tional growth beyond the reported spreads, Freddo said. The official spreads reported are based on first-year cash rental and do not reflect this additional growth from con- tractual increases, he said. "This focus on rent steps is one of the most significant recent changes we have made as we negotiate and analyze deals and one that we continued to leverage during the quarter," Freddo said. In the third quarter, DDR's ten- ant retention rate was 90 percent, compared to the typical 85 percent, he added. Freddo said he expects new deal spreads to remain comfortably in the double digits for the foreseeable future. T H E C O M M O N A R E A The Tesla Factor Luxury electric automobile maker Tesla can have a big impact on average sales per square foot. Just ask Macerich. The firm's 441,000-square-foot Village at Corte Madera shop- ping center, in Corte Madera, Calif., saw its sales per square foot rev up from $955 to $1,435 after opening up a Tesla dealer in the small common area space between the center's Macy's and Nordstrom anchors, said execu- tive vice president of leasing Robert Perlmutter. Addi- tional tenants at the upscale center include Apple, Anthro- pologie and Restoration Hardware. Textually active Concierges are only a text away at Toronto's York- dale center. Using the Kitsu instant messaging plat- form, the center allows shoppers to interact with its guest-services teams via text or online chats to get questions answered without even setting foot on the property.

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