Shopping Centers Today International

JAN 2016

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

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T H E C O M M O N A R E A 10 S C T / J A N U A R Y 2 0 1 6 Target tussles with Canadian landlords Canadian landlord Rio- Can REIT has agreed to release Target from lease obligations on 18 stores for C$132 million ($100 mil- lion). The deal brings the U.S. discount chain closer to the end of its troubled foray into Canada. After two years in Canada, Min- neapolis-based Target shut- tered its operations there earlier this year, including all 133 stores. The move left some landlords, including RioCan, holding empty stores that hurt their shop- ping centers and profits. At the time of Target Canada's demise, RioCan had 26 locations that were under lease to Target Can- ada. The landlord assigned leases at seven locations to other tenants (six locations to Lowe's and one to Cana- dian Tire). RioCan's leasing team continues to work diligently negotiating with potential tenants to backfill the premises at the remain- ing 19 properties, the firm says. RioCan is Canada's largest REIT. It owns and manages Canada's larg- est portfolio of shopping centers with ownership in- terests in a portfolio of 354 retail properties comprising approximately 78 million square feet, including 49 retail properties totaling 13 million square feet in the U.S. Meanwhile, five other landlords are taking Target Canada to court to try and get $4 million they say they are owed under their leases. A group of pharmacy fran- chises that operated within the Canadian Target stores are also suing for damages. Target needs a majority of creditors to approve its exit plan in order to close the door for good on Canada. Automatic cars Driverless cars may not be on the road yet, but mall developers are already fguring out how to work them into their projects. "We're already starting to design in valet areas that are of much more sig- nifcance and larger, that will handle a plethora of drop-off options for customers at our properties," said William Hecht, COO of Westfeld U.S. "There's going to be less of a need for a plethora of parking, because there is much more drop-off. And we'll be able to densify our properties in a much more sig- nifcant way in the future." Staples, Office Depot to fight FTC Staples Inc. and Office Depot Inc. say they plan to challenge the challenge, contesting the U.S. Fed- eral Trade Commission's intent to block merger of the two companies. Staples and Office Depot say the FTC's decision, announced last month, is based on a flawed analysis and a misunderstanding of the intense competitive landscape in which the two office-wares chains compete. According to the retailers, the decision contradicts the FTC's own unanimous ruling on the Office Depot–OfficeMax merger of 2013, in which the commission declared the market to be highly competitive. If anything, the retailers contend, the office-products landscape has grown even more com- petitive since then.

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