Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/827208
8 S C T / J U N E 2 0 1 7 T H E C O M M O N A R E A " N othing is sacred," GGP chief Sandeep Mathrani told financial analysts on a first- quarter earnings call, explaining that the company is exploring its options. Generating returns for GGP shareholders, Mathrani said, may involve one of a number of strategies, ranging from selling a trophy property to buying back shares. About 80 percent of the firm's net operating income comes from such trophy properties as Ala Moana Center, in Honolulu, and Fashion Show Mall, in Las Vegas. These class-A properties are growing at about 4 percent annually, he said. " 'A' assets trade from [the] mid-3s to low-4s — you do the math," Mathrani said. "The breakup value is far in excess of where we trade today. We're evaluating all alternatives, and we will pick a path in the near term by looking at assets on both ends of the quality spectrum." The firm is also busy reconfiguring its merchandising mix to include more food-and-entertainment options and fewer apparel chains and department stores, he said, citing GGP's Staten Island Mall, in New York City, as a case in point. In March discounter Primark opened at Staten Island Mall. "Traffic in- creased over 10 percent from the prior weekend," Mathrani said, "and this increased level has been maintained." German supermarket operator Lidl is soon to open in the mall's recaptured Sears space. GGP is adding approxi- mately 235,000 square feet to the center and it is currently 85 percent preleased. Entertainment will make up about 54 percent of the tenant mix, including an amphitheater and a Dave & Buster's. Apparel will account for 17 percent, and this includes a Zara. Food and dining will be about 20 percent, including a Shake Shack. A variety of personal care, home furnishings and other tenants will take the remaining space. The company is pursuing similar actions throughout its portfolio, which comprises 65 million square feet of anchor space, 17 million square feet of which it owns, Mathrani says. "The redevelopment of department-store boxes is a key element of our long-term earnings growth, and we view this as a compelling opportunity to generate incremental income and improve our centers," he said. "Our last vacant de- partment-store box is located at Coral Ridge Mall, in Coralville, Iowa, and has been leased to HomeGoods, Marshalls, PetSmart and Ulta. We have no vacant boxes left." Simon too, is putting apparel on the backburner as it remerchandises older centers such as its King of Prussia center near Philadelphia. "Penney's an- nounced closing," the firm's CEO David Simon said. " We could have saved that deal, we decided absolutely unequiv- ocally not. We're going to make that a mixed-use development. It won't be apparel-oriented." n GGP's Fashion Show Mall, Las Vegas Some REITs, unhappy with Wall Street valuations, are considering their options A trophy case $130 million The Outlet Resource Group and Singerman Real Estate Real bought the 400,000-square- foot Outlet Shoppes at Oklahoma City from Horizon Group Properties and CBL & Associates Properties D E A L B A R O M E T E R W H O ' S P A Y I N G H O W M U C H F O R W H A T $24.5 million Sterling Organization bought CreekWalk Village, a 100 percent occupied, 174,480-square- foot center in Plano, Texas, from 29 tenant-in-common owners $29.3 million Pebb Enterprises bought Germantown (Tenn.) Village Square, a 200,000-square- foot center anchored by DSW, Petco and T.J.Maxx. The property includes 60,000 square feet of office space $31 million Salt Lake City, Utah– based Woodbury Corp. bought Scottsdale (Ariz.) Towne Square, a 169,260-square-foot center anchored by Natural Grocers, from Tucson, Ariz.– based Holualoa Co., Tempe, Ariz. $33 million A Chicago fund manager bought Beachwalk, a nearly 55,000-square- foot retail center in Solana Beach, Calif., tenanted by Alfonso's of La Jolla, California Pizza Kitchen and the Banfield Pet Hospital $46 million Coro Realty bought a midtown Atlanta portfolio consisting of five street-level assets in the Midtown Mile, on Peachtree Street, with such tenants as Five Guys, Sprint and Starbucks. $54.1 million Retail Opportunity Investments Corp. bought The Terraces, a 173,000-square- foot center in Rancho Palos Verdes, Calif., from Combined Properties and Saban Capital Group D E A L S