General Growth Among 9 Added to Short-Sale Ban List

U.S. regulators added nine companies including General Growth Properties Inc. and the government-sponsored enterprise known as Farmer Mac to the list of stocks temporarily protected against short sales.

The additions today bring to 926 the number of protected companies, exchange data show. General Growth is the second- largest owner of U.S. malls, and Federal Agricultural Mortgage Corp. provides financing to farmers, ranchers and rural homeowners. At least two companies, Diamond Hill Investment Group and "boutique'' investment bank JMP Group Inc., have opted off the list. . . . more

General Growth reviews alternatives after stock plunge

NEW YORK (MarketWatch) -- Debt-laden mall operator General Growth Properties Inc. (GGP:

General Growth Properties, Inc. said Monday it is considering asset sales and mergers after its stock price received a serious bruising last week.

Fretful about the fate of highly-leveraged companies, investors frowned on the news, causing General Growth's shares to tumble 19% in recent trading.

General Growth, the second-largest U.S. mall owner and operator by market value, said it should be able to offer long-term fixed-rate portfolio mortgage financing to lenders in November and is pursuing other financing for debt maturing soon. In addition, various capital-raising efforts are being explored - including divestitures, preferred-stock sales and mergers.

The move comes after the real-estate investment trust's share price slumped 34% on Thursday, forcing General Growth executives to sell more than 2.4 million shares to cover margin calls. The stock slide was prompted by disclosures that it granted a concession in a $1.5 billion loan it will use to replace other debt. . . . more

The Future of the Regional Mall

Regional shopping malls, the stars of retail real estate in the eighties, have long been losing share since the arrival of supercenters and power centers. And with the economic downturn, regionals are only expected to lose more ground.

According to a survey conducted by TNS Retail Forward, about 30 percent of primarily household shoppers now visit a regional mall on a monthly basis, down a whopping 4 percentage points from just three years ago. The leading traffic driver by a wide margin is the power center, with 60 percent of shoppers visiting monthly. That's followed by strip malls with supermarket anchors, at 49 percent; and online shopping sites, 42 percent.

Of the retail formats, only power centers, strip malls with supermarkets and e-commerce captured a larger share of monthly shoppers in 2008. With tough economic times and rising food prices, consumers are gravitating more to retailers such as Walmart and Target at power centers for value, according to TNS Retail Forward. At the same time, with gas prices also surging, convenience has become more important to consumers. And with Walmart and Target adding food to their mix, power centers are only increasing their one-stop appeal.. . . more

Mall Glut to Clog Market for Years

Scarce Shoppers,Lack of Tenants Ding Developers

Shopping-mall owners have struggled this year with a darkening economy, slowing consumer spending and store closings by retailers. But they face another problem that may persist long after the economy bounces back: a decade of overbuilding.

Developers have built one billion square feet of retail space in the 54 largest U.S. markets since the start of 2000, 25% more than what they built during the same period of the 1990s, according to Property & Portfolio Research Inc. of Boston. U.S. retail space now amounts to 38 square feet for every person in those 54 markets, up from 29 square feet in 1983, the firm says.

Consider a six-mile stretch of highway north of Dallas, where three developers are racing to finish four huge shopping centers with a combined three million square feet of space. Not only will they compete with each other, but there are three existing malls within a 10-mile radius.

"There just aren't enough tenants to go around for three projects," concedes Gar Herring, president of shopping center developer MGHerring Group of Dallas, which is building the largest of the centers. . . . more

The World's Best Shopping Malls

One of the most distinctive shopping centers in the world, Dubai's Wafi Mall is known for its opulent décor as well as its range of shops and restaurants. Shaped like an Egyptian pyramid, it has hieroglyphics that decorate the walls, while statues of pharaohs sit next to the gold-foiled white pillars lining the walkways. Arabic fashion stores like Eve N Black stand alongside big-ticket European luxury retailers such as Missoni and Chanel.

Wafi is just one example of how extravagant--and sometimes over the top--the world's malls can be.

Sure, hot weather in places like the Middle East make indoor shopping centers preferable, but these spots go beyond necessity. Today's superstar malls are often the epitome of opulence.

Most of these centers sprang from the growing demand for luxury goods in the BRIC countries--Brazil, Russia, India and China. An emerging middle class has stolen market share from the West, forcing brands to open up shop in developing nations where their names were virtually unknown before 1995. In fact, Chinese consumers now account for 12% of worldwide sales of global luxury goods, about $6 billion altogether, according to Goldman Sachs.

All Upscale, All Under One Roof
For those traveling or living in the Middle East, Villagio in Doha, Qatar, is a must-see. Under a ceiling painted like the sky, this white marble mall resembles a movie set--or, better yet, a Disney theme park with its postmodern pillars, bridges and ornamental flares. But instead of prop closets or cartoon characters, the space houses over 200 shops, including Dolce and Gabanna, Banana Republic and Ralph Lauren.

In Melbourne, Australia, where emerging fashion labels like Dhini and Kirrily Johnston are based, try GPO. This neo-Renaissance-style building served as a post office for more than 100 years. After a fire that nearly destroyed the space in 2001, the GPO reopened as a mall featuring local designers such as women's wear specialist Wayne Cooper, bikini brand Zimmermann and dressmaker Leona Edmiston.

"The style at GPO was unique and fascinating. The clothes were very different from other fashion looks," says Karen Meyerhoff, a managing director at the Guggenheim Museum, who visited recently.

From Indoors to Out in the U.S.
Malls may be the attraction du jour in several parts of the world, but in the U.S., indoor shopping meccas have been replaced by outdoor "lifestyle centers," immaculately landscaped properties that offer fine dining and provide access to specialty and big-box retailers, all within walking distance.

This change occurred in the 1990s, during the rise of specialty retailers like Gap, Abercrombie & Fitch and American Eagle Outfitters. The market for department stores--which usually serve as a mall's anchor, generating the largest number of sales--is saturated, and developers have been forced to try new approaches to keep consumers interested. The concept of having a stylish outdoor center where shoppers can eat outside in the summer--and easily move from Victoria's Secret to Target in the cooler months without driving 20 more miles--is more attractive.

"In the last 10 years there has been an absolute explosion of retail shopping opportunities," says Pam Danziger, founder of Stevens, Pa.-based United Marketing, which provides market research for luxury goods companies, referring to the aforementioned lifestyle centers.

In 2008, there are 69 open-air centers being built, compared with 37 in 2007 and 14 in 2006, according to Boston-based firm Property and Portfolio Research. On the opposite end, the vacancy rate for indoor malls was 6.3% in the second quarter of 2008, according to Reis, a commercial real estate research firm. That's the highest it's been since the end of 2001.

Although the U.S. may have started to shed its mall culture with the development of these outdoor centers, there are some upscale venues that still shine, like the Shops at Columbus Circle in Manhattan's Time Warner Center. It has only 52 shops, but its distinctive blend of high-end retailers, upscale restaurants and larger, mid-market stores makes it a destination for locals and tourists alike.

It's also known for its dining scene, which includes sushi restaurant Masa, home of the $400 tasting menu. Per Se, with chef Thomas Keller's highly lauded take on the popular New American-French menu, is considered one of the best restaurants in the country.

From East to West, whether you're chasing after a limited-edition Chanel handbag, the freshest sushi or the ultimate tourist attraction, these malls stray far from the J. C. Penney and Spencer's Gifts of your past. And consumers seem to be saying of them, "Good riddance."

In Depth: The World's Best Shopping Malls

Source: Forbes

Copley Place seeks city of Boston’s OK for 47-story tower

Copley Place owner Simon Property Group Inc. is moving ahead with plans to remake the Back Bay skyline with a 47-story condo tower that will also expand the upscale mall’s footprint.

The mall owner, in a proposal filed yesterday with City Hall, details plans for nearly 800,000 square feet of new residential and Retail space at the corner of Dartmouth and Stuart streets.

Along with 280 high-rise condos, Simon is also banking on a significant expansion of Copley Place.

The proposal calls for adding 54,000 square feet to the existing 115,000-square-foot Neiman Marcus store, which would be renovated as well. Another 60,000 square feet of retail would be added beyond that, including space for a restaurant and a winter garden.

The condo tower will include a health club, luxury day spa, library and concierge service.

“The project will enhance the urban fabric of the neighborhood and be a striking addition to the city’s skyline,” said Carl Dieterle, executive vice president for urban development at Simon, in a statement.

But state Rep. Marty Walz (D-Back Bay) said there are still significant concerns about the shadows the new tower will cast across nearby Copley Square and the Commonwealth Mall.

“A building of that height will cast significant shadows on those two green spaces,” Walz said.

Rick Stockwood, a spokesman for the project, said the tower has been specifically designed to minimize the impact of any shadows it will cast. The impact itself, which he described as limited, is laid out in a report included in the project plans submitted yesterday to the Boston Redevelopment Authority.

The shadows that cross Copley Square, for example, are confined to the late fall and winter months, Stockwood said.

Source: Boston Herald

No More Mall-ification: Developers Rejig Sites Rather Than Build Anew

LAS VEGAS — Developers are breaking ground — but it's the ground on which they've already built.

It's a matter of necessity with a weak U.S. economy, rising costs, little room left in the country to start up completely new projects, flattening rents and the shutting of retail doors, which leaves landlords with vacancies to fill.

The "intensification" or "densification" or "organic growth" of existing shopping centers, as executives call it, is the top priority in a nation that's overstored, overmalled and in an economic malaise.

And that means finding, then rolling out, new retail formats for selling fashion, and redeveloping tired and underutilized space with food and restaurant offerings that go beyond the traditional food court menu. It also means adding entertainment features, such as theaters and parks, as well as hotels and office and residential space.

"Intensifying the use of property is certainly the major innovation," said John Bucksbaum, chairman and chief executive officer of General Growth Properties, the nation's second-biggest developer, during an interview at last month's International Council of Shopping Centers annual convention here.

At the Cottonwood Mall, in Holladay, Utah, near Salt Lake City, for example, "we've put a lot of emphasis on offices and residential growth," Bucksbaum said. "That's a mall being de-malled." The conventional enclosed mall will reopen in 2010 with a mixed-use format for fashion shops, cafes, restaurants, a specialty grocery, a cinema, condos, town houses, cottages, single-family homes, offices, streets for strolling, riverside trails and a public plaza.

GGP also has an aggressive program to bring farmers' markets to its properties. "Maybe it's time for food to come back to shopping centers," said Alexander Berman, senior vice president at GGP, during one of the convention's panel discussions.

"You need to give people more choices," said Scott Schroeder, vice president of marketing and communications for Developers Diversified Realty. "Nobody wants to make eight stops to get what they need." He noted that the performance of certain specialty retailers and smaller "junior" anchors was an ongoing concern for the industry. "The more we can create a hub that combines value and fashion, the more appeal we have and the more customers we will retain."

"Isn't it time to reevaluate one-stop shopping?" asked Ian Thomas of the Vancouver-based Thomas Consultants, who moderated a panel on international growth.

The one-stop notion is an old format with renewed relevance as mall traffic wanes and gas prices spiral.

In Phoenix, Macerich is studying the addition of two residential towers at the Biltmore Fashion Park, a highly productive open-air center, and in Scottsdale, Ariz., it's looking at putting residential or office space on the site of a former Days Inn in Scottsdale Fashion Square, another upscale center. Macerich is moving forward with a number of projects in the West, including the Oaks Mall in Thousand Oaks, Calif., which will open in phases beginning this fall. The firm also is taking the roof off Santa Monica Place and overhauling the 30-year-old center to integrate it more with the coastal community.

"We are taking a fresh look at projects and asking, is there a demand for other mixed uses?" said John Genovese, executive vice president for development at Macerich. "We take a very patient approach. We want to do the right thing for [our] assets."

"Providing a sense of the outdoors is very important," said Robert Taubman, chairman, president and ceo of Taubman Centers, in describing an industry trend. In one of the few new projects going up, Taubman is developing the mixed-use City Creek Center in downtown Salt Lake City with a retractable glass roof over much of its 700,000 square feet of retail. The project is massive, with 1.4 million square feet of offices planned, along with a Marriott Hotel and a 50,000-square-foot Harmons grocery store, among other features. The project is being done in conjunction with the Church of Jesus Christ of Ladder Day Saints, at a cost sources put at around $2 billion, including $60 million for the roof.

Los Angeles developer Rick Caruso said, "Our main goal is to make the shopping experience feel different and feel special," noting that, at his Americana at Brand center, there are uniformed elevator operators and fountains with water displays choreographed to music. "Even the rest rooms are opulent. When the novelty wears off, we'll introduce new stores, we'll do something spectacular."

Caruso's planned Shops at Santa Anita, slated for 2010, will take the outdoor-village concept one step further, with opulent residences and horse-drawn carriages at the center.

The other big trend is going global. That expansion is happening faster than ever, with Russia, India, the Far East and Eastern Europe prime targets. "The shift to the global focus has rejuvenated the shopping center industry," stated Rene Tremblay, president and ceo of Ivanhoe Cambridge and the outgoing chairman of ICSC, in a keynote speech. "Shopping center development has continued to thrive around the world, though less in North America. In North America, not many new spaces are being built. I never would have imagined the day when we would be doing business in 12 countries."

But there is a big dilemma in going overseas. Can the developers lure the retailers abroad? Macy's and Lord & Taylor revealed that they're interested in exploring overseas opportunities, and Saks Fifth Avenue already has two stores operating in the Middle East, announced a third there recently, has one in Mexico and is planning another in Shanghai.

However, "any department store has difficulties translating across boundaries," said J.C. Penney chairman and ceo Myron Ullman 3rd, who was on stage at the convention for a Q&A. "It's easy to announce international expansion. It's much more difficult to make it work for shareholders."

RETAIL CONCEPTS TO WATCH

According to Taubman executives, Victoria's Secret, Apple and Abercrombie & Fitch are the three most desired U.S. specialty chains in overseas markets. Internationally, Inditex and its Zara chain and Hennes & Mauritz are the best poised for further expansion.

At home, developers said they're closely watching the expansion of Japanese fashion retailer Uniqlo, which opened its first U.S. store in November 2006. Safeway's new concept, called The Market, a 20,000-square-foot box for produce and prepared food and a service deli, is also on the radar, as is Gilly Hicks, the intimate apparel chain launched by Abercrombie & Fitch last winter.

Other retail nameplates of keen interest are Metro Park; Forever 21, which is looking to open larger footprint stores (for more details, see page 16); J. Crew and its two-year-old Madewell division, as well as the even newer VSX, a shop selling activewear and yogawear that was launched by Victoria's Secret in a single site in Easton, Ohio, last year.

Another newcomer from the West Coast, called Love Culture, is gathering steam. The chain has seven stores operating, five under construction, 15 set for next year and another 20 seen for 2010. It's privately owned and sells women's moderate-to-better-priced fashion.

Two chains that have been around for awhile, but continue to impress developers are Puma and Apple.

At ICSC's "hot retail" session, in the food category, Five Guys Burgers and Fries, Pinkberry, Pollo Campero and Stir Crazy took the honors, and women's fashion retailer Apricot Lane, board sports chain Billabong, Tesco's grocery concept Fresh & Easy, L.L. Bean and toy car retailer Ridemakerz were also honored as the best.

"We've seen a lot of innovation in new retail, even with the apparel retailers, which is not easy to do," said ICSC president and ceo Michael Kercheval. "It's great to see, but more importantly, it's imperative in order to keep shopping centers new and interesting."

At other sessions, developers at the conference cited Costco, Wal-Mart and Target as highly desirable tenants in a down economy, largely because of their pricing and their grocery offerings, which have fared well, and the new view that they can be neighbors to upscale stores in the same centers. Westfield Group, for example, will house Target as well as Neiman Marcus as anchors this year in its Topanga center near Los Angeles' San Fernando Valley. DDR has a Costco anchor in its Christown Spectrum Mall in Phoenix, and in the fall, Macerich will open its first in a former Macy's at Lakewood Center, one of the largest enclosed malls in the Los Angeles area. Other mall-based Costcos are in Simon Property Group's Potomac Mills in Prince William, Va.; General Growth Properties' Cumberland Mall in Atlanta, and the Cafaro Co.'s Spotsylvania Towne Centre in Fredericksburg, Va.

"In the old days, it was location, location, location. Now it’s location, location, location and timing, timing, timing.­­"

— Arthur Coppola, Macerich

"The lines are all blurred. The days of saying we won't or can't do a mix don't fly now," said Anthony Buono, CB Richard Ellis' executive managing director of retail services. "Your Target customer is the same as your Nordstrom customer is the same as your Saks customer."

ON THE ECONOMY, RETAIL PERFORMANCE AND CONSUMERS

While concerned about the state of the economy, developers are positive regarding the long term.

"The whole point is you've got to look at things down the road," said Taubman of Taubman Centers, which saw a 3 percent comparable-store gain last quarter. "The country is not technically in a recession. I believe we are in a period of slower growth. It's important the Fed do the things it's done to loosen monetary policy. Things will improve. The economy will continue to have slow growth, but should not worsen.

"You can't ignore the huge engines that are out there," he added, citing emerging economies including China and India, and sovereign funds with huge pools of capital from oil interests that must be invested.

"A quarterly event is really irrelevant. Our thinking is really 10 to 15 years out," said Arthur Coppola, president and ceo of Macerich. However, he added, Macerich "will not build before a market is ready for the project. "In the old days, it was location, location, location. Now it's location, location, location and timing, timing, timing. We will not build before the market is right."

Coppola believes retailers need to "constantly look for ways to keep their brands fresh and to look for brand extensions that drive repeat visits and grow their customer base. But at the end of the day, Americans love to shop, and we're in a position to capitalize on these new brand extensions, delivering prime real estate that can be a platform for retailers."

According to Ullman of Penney's: "Consumers are either buying the lowest possible price — door-busters — or something innovative or new."

"There is no question the Gen-X women's business is not good," said William Taubman, chief operating officer of Taubman Centers. "There is a changing fashion profile toward more contemporary silhouettes and some retail concepts have just not adjusted. Women don't want to feel old or tired."

On the development front, "money is tight. Fewer projects are being announced. People are making sure they're leasing what they've got," said Taubman.

GGP's Bucksbaum said comparable-store sales at his centers were down 1 to 2 percent during the first quarter of this year, and occupancy rates were down 20 basis points. He foresees sales relatively flat for the year overall and occupancy down 50 to 100 basis points by yearend relative to the fourth quarter.

"What's happening is that developers are moving at 80 miles an hour, retailers are doing 60 miles an hour and lenders are going 25 or 30 miles an hour," said David Solomon, president and ceo of NAI Global's ReStore unit. "For most, it doesn't look pretty right now and it will get worse before it gets better."

The average vacancy rate could reach 10 percent by the end of the year, and there likely will be more retail bankruptcies to come, Solomon predicted, before the market settles down.

Some projects have stalled or been called off: Two of Related Cos.' projects have experienced financing holdups. Downtown Los Angeles' Grand Avenue, a $3 billion project to include a shopping center, a supermarket, other stores, high-rise condos and a hotel, had been scheduled to break ground in fall 2007, but the date has been moved to February, with completion in 2012. The second phase of the company's CityNorth project with Thomas J. Klutznick Co. in Arizona has been delayed because potential lenders want to wait until the economy improves. The first phase of the $1.2 billion project is expected to open in October.

THE MOOD

"Developers have become very introspective and defensive," said Gary Mozer, managing director and principal at George Smith Partners, a financial intermediary that raises debt equity and mezzanine financing for commercial real estate. "They're trying to find how to deal with the marketplace in the most productive ways. There are more face-to-face meetings between [developer principals] and tenants, bankers, equity sources, city leaders and contractors. Nowadays, senior guys are cutting deals with senior guys. There is a lot more stress on the business and people are reacting to that."

How else are deals different these days? "There is a lot more equity required up front in transactions. The projects are more about urban infill rather than growth markets, and developers are getting squeezed because of increased construction costs and stagnant retail growth," Mozer said. Asphalt, which is oil-based; steel, and PVC are getting more expensive.

However, overall, he believes, developers are "doing OK right now. They're not going off the cliff."

"Over the last eight months, the deal cycle has lengthened from 60 days to 90 to 120 days," observed John Bemis, executive vice president and director of leasing and development for Jones Lang LaSalle. "Retailers and developers are negotiating leases harder. Lots of retailers are looking for options," such as five-year leases with options to renew.

"Nobody is really panicking. I thought the mood would have been worse," said Vincent Ottomanelli, president of Ferragamo USA, who was spotted walking the leasing floor of the Las Vegas Convention Center. "This is not a garage sale, but traffic is lighter" than a year ago.

The event was busy, but not as robust as in recent years, executives said. However, many sought to present a positive front by unveiling plans for new projects and beefing up existing facilities with an eye on the long term. They see retailers cutting their openings for next year by half of what they might have originally considered and getting back on track by 2010 with more aggressive expansions.

At the malls themselves, "my perception is traffic is off significantly, but we still have a full schedule with people looking to do business," said R. Webber Hudson, executive vice president of Related Urban. "If you buy into the notion that there's been economic turmoil for at least six months, and that typically you see an 18-month downturn, then it's easy to see 2010 as a safe bet for a strong recovery."

According to an ICSC media official, registration at just less than 50,000 was around the same as last year's, though the final tally will be released later this month.

GOING GREEN

GGP's Bucksbaum said his company has many initiatives to help the environment, some noticeable to the general public, others not so. The company has a program to install waterless urinals, for example, which will be obvious. "Ultimately, we will have them at every location," Bucksbaum said. "We have saved 6 million gallons of water this year."

He also said there has been a dramatic reduction in kilowatt usage through the GGP portfolio by using energy-efficient heating and cooling management systems. The company also is testing or introducing alternative sources of energy in certain markets, and as roofs come up for replacement, GGP is making them white to reduce the heat in the malls and cooling requirements.

"Rather than lowering quality of design or budgets, something we have noticed is an inclination of retail developers to explore more green design and new materials," said Kimberly Sheppard, design partner at Gabellini Sheppard Associates. "This is especially the case with some of our larger luxury retail projects like Westfield London, and in Las Vegas, City Center and Echelon."

Some shopping center operators said they were exploring Leadership in Energy and Environmental Design certification for projects in development to achieve long-term cost savings and attract an eco-minded consumer. While retailers picked up a lot of steam on the green front, it generally seems to be more of a catch-up for developers.

"The retailers are really getting into the green movement, and are trying to push that agenda more and more," said Justin Doak of the U.S. Green Building Council. "For big developers, it's easier to take an eco-friendly approach before things are built. Afterward, you typically see resistance, at least until we reach a critical mass of retailers that push for it."

Source: Women's Wear Daily

NJ: Quakerbridge Mall Set to Expand

LAWRENCEVILLE, NJ-The long-anticipated expansion of the 1.1 million-sf Quakerbridge Mall could be underway by this summer, pending planning board approval. The multimillion-dollar project would enlarge the mall by slightly more than 600,000 sf. adding two new anchors as well as additional shops, parking and restaurants.

Development of the property is being handled by Indiana-based Simon Property Group and Kravco Simon Co., based in King of Prussia, PA. Kravco Simon, which is 50% owned by Simon Property Group, has a 38% stake in the Quakerbridge Mall.

Plans to expand the mall were revealed in Sept. 2005, and in May 2007 it was revealed that the expanded mall would include a 90,000-sf Neiman Marcus and a 144,000-sf Nordstrom. The new stores join current anchors JCPenney, Lord & Taylor, Macy’s and Sears. The current JCPenney store will be demolished and a new 140,000-sf JCPenney will be built.

The first phase of the project, which is scheduled to go before the planning board for a vote on June 2, would include construction of the new anchors and a three-level parking garage. Construction could begin about a month after the planning board gives approval and is scheduled for completion in 2011. Specific financial details of the project were not disclosed.

Representatives of the developers met with the planning board on Monday to answer questions regarding traffic and energy conservation. The mall’s owners have pledged $8 million for traffic improvements in the area that include adding an additional lane on Route 1 south and widening Clarksville and Franklin Corner roads.

In addition, the developers addressed concerns about energy use and promised to incorporate sustainable measures into the project. Such measures include orienting JCPenney to take advantage of passive heating and cooling and working with the US Environmental Protection Agency to reduce energy use in the new building.

"We’re working closely with government bodies and officials to do the right and proper thing," a spokesperson for Simon Property Group, tells GlobeSt.com.

The spokesperson continues that "we’re very focused on improving the malls and making them as attractive as they can be for our shoppers, and that helps the area as well."

Source: GlobeSt.

Baltimore: The Shops at Kenilworth lands new retailers

The Shops at Kenilworth has signed two new tenants, despite an economic tumble in retail.

Contemporary clothing boutique Azura Clothing Co. is opening a new store in the Towson mall. The store features its own line of dresses and sportswear.

Bluehouse will open its second store in the Baltimore region at Kenilworth. The store sells home furnishings, accessories and housewares. The products are made from reclaimed, recycled materials, or organic and chemical-free materials. Bluehouse has a location in Harbor East, near Fells Point.

Also, as the Baltimore Business Journal reported in April, Fells Point Surf Co., which sells skating, surfing and snowboarding equipment, will open a second store at the mall.

All three stores are slated to open in August.

Learning How, a teacher supply store already in the mall, is expanding into a 5,600-square-foot spot.

Kenilworth officials told the BBJ in April the mall had several vacancies for the first time, following several years of 100 percent occupancy.

Kenilworth is anchored by men's retailer Jos. A. Bank Clothiers Inc. (NASDAQ: JOSB) and houseware store Stebbins Anderson.

Source: Baltimore Business Journal

MA: More retailers to open shop at Northshore Mall

PEABODY — Northshore Mall is playing its version of musical chairs, shuffling storefronts, adding big-name retailers and renovating old digs.

Trendy clothing retailers H&M, Forever 21 and Hollister have signed on with the Northshore Mall and are expected to open by this fall, parent company Simon Property Group said in a press release last week.

The mall also announced beauty chain Sephora, international fashion house Zara and tea guru Teavana as three of the 24 retailers expected in the mall's new 165,000-square-foot wing.

It's all part of the mall's three-phase renovation plan, which culminates with the opening of upscale department chain Nordstrom in April 2009.

With all the changes, shoppers may not recognize the Northshore Mall.

Existing tenant Eastern Mountain Sports has moved to a larger storefront. H&M is hoping for an August opening in the former Limited and Sam Goody spots. Hollister will settle in where the Baby Gap and Gap Kids once stood, and the child Gap retailers are moving to larger digs across the mall.

The Los Angeles-based Forever 21 will open as a two-level storefront at the Northshore Mall.

Footwear chain Skechers also opened a store in the Peabody mall late last month, and a freshly remodeled Brookstone will reopen this week.

All this comes on the heels of an updated Food Court, which boasts better lighting because of what is called a "wave roof," which basically lifted up a portion of the ceiling and added glass panels to let in the light. The Food Court will open restaurants Chipotle Mexican Grill on May 20 and a Shrimp Market this spring, the company said.

The mall is also anticipating the area's first P.F. Chang's China Bistro late this summer. Restaurants Legal Sea Foods, Joe's American Bar and Grill, and Bertucci's will be undergoing their own makeovers, the release said.

Source: Salem News

Natick, MA: Downscaled hopes for an upscale mall

The Natick Collection was envisioned as a destination for suburban shoppers searching for luxury goods, but sales at some high-end boutiques, some merchants say, are stagnating, and other stores are opting out of the mall altogether.

NATICK - On a recent spring day, Neiman Marcus is a ghost town. Almost everything is on sale at Calvin Klein. Gucci has delayed its opening several times, and Italian designer Piazza Sempione has bailed on its lease entirely.

The highly anticipated Natick Collection, a suburban bastion of luxury shopping where some rents are higher than coveted Newbury Street, is off to a slow start, according to retail analysts, store owners, managers, and employees at more than a dozen stores.

Some merchants blame the weak traffic on a potential recession and anemic consumer spending. Indeed, across the country retailers are seeing fewer shoppers, shutting stores, or filing for bankruptcy as people pull back on discretionary spending and worry more about paying for basics like milk and gas.

Yet others say the problem may go even deeper, that high-end designers and top-notch fashion in the suburbs simply haven't caught on. Natick was supposed to be the next fashion frontier, debuting the state's first Nordstrom and first suburban Neiman Marcus as part of a multimillion-dollar 500,000-square-foot expansion that opened last fall.

But the hype has fallen short in this town 20 miles west of Boston. After a brisk holiday season, traffic has slowed, on some days, to a near standstill, merchants say. The older part of the mall, which features sta ples like Macy's and Gap, still sees a crush of shoppers on the weekends, they say. And while Nordstrom is popular, much of the vast new wing - with soaring skylights, concierge service, and fake birch trees - often remains empty.

"We had a rough winter," said Betty Riaz, owner of trendy boutique Stil, who pays upwards of $100 per square foot for the Natick store, which is more than her Newbury Street shop. "It's been quiet. Even if you have money, you may not have taste. We have to educate our customers on style. It's hard. I thought it would be easier in Natick."

General Growth Properties, which runs the mall, said it has not heard concerns about sluggish sales and that the slowdown in consumer spending and luxury shopping has not had an impact on the mall. Michael McNaughton, General Growth's vice president for asset management Northeast, said business at stores in the original part of the mall has "grown tremendously" since the expansion opened last fall, and that the new wing has exceeded expectations. But he declined to provide specific traffic or sales numbers.

McNaughton disputed the suggestion that Natick wasn't ready for high fashion, but added: "Not every retailer is for every customer."

In recent weeks, stores have stepped up promotions in an attempt to lure people into the luxury wing, where $3,000 Louis Vuitton bags and $500 shaving kits are plentiful. For the month of April, Neiman Marcus offered free Bellini cocktails every Saturday afternoon as part of a "Sip and Shop" event to showcase its designer handbags. Bright pink banners hung from the ceiling near Sears in the older section of the mall, beseeching customers: "Neiman Marcus. Go Back. Turn Right. Shop Fabulous."

Last month, Lululemon Athletica hosted "Zen Wednesday" outside Neiman Marcus, offering a free yoga class followed by tapas and juice elixirs served by the French restaurant Sel de la Terre. Two weeks ago, boutique Stil hosted a luncheon and fashion show in the middle of the mall.

Retail analysts say General Growth may have misread the demographics and overestimated the reach of the shopping center. While there is ample wealth in this region - the average household income is about $110,000, nearly double the state average - there is still a culture of buttoned-up Yankees who aren't accustomed to indulgent spending on luxury goods, according to Madison Riley, a retail analyst at Kurt Salmon Associates in Boston. And the younger moms paying attention to fashion are more likely to buy a Burberry blanket for their baby carriage than $350 designer jeans for themselves.

"There has been a culture in the Boston area of that Yankee thriftiness, even when one had money," Riley said. "That's changed in the city of Boston but the mentality still resides in the suburbs, and that is impacting Natick."

Boston, with its influx of tourists, wealthy empty-nesters, and stylish yuppies, has had better success proving its fashion sense, keeping busy new stores like Jimmy Choo and Gucci. Fashionistas on the North and South shores are also more likely to hit the Boston Neiman Marcus and the shops on Newbury, rather than head out to the western suburbs, according to Mike Tesler, president of Retail Concepts, a consultant firm in Norwell who was not involved in the project.

The combination of Gucci's multiple delays, the pullout of Piazza Sempione, and other vacancies in the new wing has worried some retailers about the future of the mall. Gucci would not comment on the reasons behind its delays, and Piazza Sempione would only confirm that it had backed out of the lease in Natick.

Tesler, who recently visited Natick Collection for a business lunch, said only three other cars were parked in the new premium lot, which charges $5 and is closer to the luxury wing. Over the five times he's visited the mall in recent months, the number of cars in the lot has decreased with each trip.

Several Neiman Marcus employees, not authorized to speak publicly to the Globe, complained of very slow sales and Neiman bosses instructing employees to make calls to the same customers two to three times a week to seek more business.

Retail analysts believe Natick will ultimately be successful, but it may take some time.

"At cocktail parties in Chicago, LA, and New York, they talk about fashion the way we talk about sports. The focus on fashion is less and less as you get out in the suburbs," Tesler said. "That is gradually changing, but there's some education and work to be done."

Paula Brennan, assistant store manager at The Art of Shaving, said the new section of the mall is pretty empty during the week, and even during busy weekends, people seem to be merely window shopping. The upscale shaving business has stayed afloat because of customers who work in the city, bought products at the Copley Place shop, and are looking for replenishments at the Natick store, near where they live.

Sel de La Terre partner Frank McClelland said his French restaurant has met expectations in Natick, but attributed the success to its regional reputation.

"We're more of a destination and not reliant on mall traffic as much as other retailers," McClelland said.

The economy certainly isn't helping Natick, with luxury retailers, once the pillar of strength, showing signs of lost momentum nationwide. Louis Constant, a salesman at Tommy Bahama, which sells high-end resort wear, said he blames slow business in Natick on customers being more conservative with their spending. Across the industry, sales at stores open at least a year have fallen recently at upscale merchants, including Saks Inc. and Nordstrom, which reported declines of 2.9 percent and 9.1 percent respectively.

But in Natick, department store Nordstrom is one of the exceptions. Retail analysts say the newness of Nordstrom - Natick was the first location in the state - along with its broad price points make it more accessible for shoppers, offering $1,200 Versace top coats and $30 T-shirts. Nordstrom spokesman Michael Boyd said the company has "been really pleased by the results we've had in Natick," but would not comment on whether sales had met or exceeded expectations.

Riaz, owner of boutique Stil, said she has followed Nordstrom's lead and changed the mix of her wares in Natick to include more lower-priced items over the past two months. She now sells T-shirt dresses for under $100 alongside her $800 dresses.

Nadia Nielsen, 21, of Wayland, recently had a dose of sticker shock after walking out of Neiman Marcus empty-handed. As she headed to the older part of the mall, Nielsen questioned the idea behind the upscale shopping experience.

"Out here in the suburbs, people are pretty casual," she said. "When you go to Whole Foods and wear heels, you feel too dressed up."

But the Natick Collection does have its hard-core loyalists, like 32-year-old Vivian Wexler.

"Yes, it's conspicuous consumption at its finest, and I am ashamed to admit that it rocked my world down to the core," Wexler said. "However, even if you're not a die-hard capitalist, you'll be astounded at how . . . convenient it is to go to one mall and be able to get your entire list of holiday gifts. They've got such a diversity of stores that it's mind-boggling."

But her last visit to Natick? December.

Source: Boston Globe

Simon Focusing On Mall Redevelopments

INDIANAPOLIS-With credit tight and the economy slow, Simon Property Group will focus on redeveloping its premier US projects and developing and expanding its outlet centers both domestically and internationally, executives said at the company’s first quarter conference call.

Three new developments, in Noblesville, IN; Panama City Beach, FL; and Tinton Falls, NJ; will open this year, and the company has not backed off any projects in 2009 or 2010. Expansions planned for 2008 and 2009 are: Fashion Mall at Keystone in Indianapolis; Northshore Mall in Peabody (Boston), MA; Orlando (FL) Premium Outlets The Promenade at Camarillo (CA); and Ross Park Mall in Pittsburgh. The company also is close to announcing an outlet center that will be delivered in 2009.

“Capital is a precious resource,” said David Simon, chairman and CEO. “We will make sure we use it on projects that fulfill our requirements.”

New international development projects under construction include centers in Naples, Italy; Sicily, Italy; the Sendai (Japan) Izumi Premium Outlets; and five Wal-Mart-anchored centers in China. Additional development opportunities include projects in South Korea and Japan.

Major international growth by acquisition isn’t likely, though the company is looking at one potential purchase with Canadian mall owner Ivanhoe Cambridge.

“We’ve looked at a few deals. I’m still of the belief that the US economy will have an effect on the global economy, and that hasn’t permeated yet,” said David Simon, chairman and CEO.

For the quarter, funds from operations (FFO) increased 7.1% from the previous year to $420.1 million. Net income available to common stockholders for the quarter decreased 10.7% to $87.9 million from $98.4 million in the first quarter of 2007. Comparable sales per square foot rose 0.8% to $491 at regional malls, with outlets seeing a 5.4% increase to $511.

Regional mall occupancy was 91.7%, down from 91.8% the previous year. Outlet center occupancy declined 120 basis points to 97.9%, and community/lifestyle center occupancy rose 20 basis points to 93.3%.

Source: GlobeSt.

Retailers' Struggles Mean Lean Times at the Mall

Weak consumer spending is pushing struggling retailers close to or over the edge, and that is starting to hurt shopping-mall owners.

The latest retail casualty is Linens 'n Things Inc., a 500-store home-accessory chain, which is considering filing for bankruptcy-court protection as soon as this week. The chain, which went private in a leveraged buyout two years ago, is running short of cash, and its vendors have stopped shipping products, said two people familiar with the company.

For shopping-mall owners, it is a rude awakening from the boom times of the past few years, when consumers borrowed to furnish new homes. While vacancies should remain low, the slowdown means weaker rent growth for all mall owners and serious pain for the most heavily indebted landlords.

Stock investors are dismissing the weakness, driving up shares of retail-property owners 7.7% this year, though the sector fell 19.6% last year.

The list of weak retailers is growing by the day, including furniture seller Domain Inc., high-end jeweler Fortunoff Inc. and electronics merchant Sharper Image Corp., all of which have sought bankruptcy protection since January.

Mall mainstay Foot Locker Inc. closed 274 stores last year and anticipates 140 more closures this year. Jeweler Zale Corp. is closing 100 stores in the wake of disastrous holiday sales. Wilsons the Leather Experts Inc. is closing 158 of its 260 mall stores this year, and teen retailer Pacific Sunwear of California Inc. is closing its 153-store Demo chain.

Making matters worse, new construction will raise the total amount of retail space by 3.5% this year in the top 54 U.S. markets. But retail-sales demand, which has slowed with the economy, will justify only a third of that new space when it is completed, according to market-research firm Property & Portfolio Research Inc.

Problems with lenders are especially painful for retail landlords who bet that rising rents and falling vacancies would help them handle heavy debt loads.

Centro Properties Group, a debt-laden Australian real-estate investment trust that owns 682 shopping centers in the U.S., faces an April 30 deadline to present a plan for repaying $3.4 billion in short-term debt that it failed to pay on time earlier this year. The company recently attracted preliminary buyout bids averaging $1 per share, according to people familiar with the matter, far less than the 10 Australian dollars (US$9.27) per share it traded for last year.

U.S. mall REIT General Growth Properties Inc., while far more sound than Centro, nonetheless is seeking to refinance $6 billion in debt due this year and next. Company executives insist the REIT has many options, including equity sales and putting properties into joint ventures, to handle its debt obligations. It has funding in place for some of that $6 billion. But the deteriorating retail market isn't going to help.

In fact, conditions are likely to get worse. The International Council of Shopping Centers, a trade group, predicts nearly 5,800 store closures this year, outpacing last year's 4,600 and approaching the recent high of 6,300 in 2004. Several anchor tenants -- Wal-Mart Stores Inc., J.C. Penney Co. and Office Depot Inc. among them -- have slashed expansion plans and have delayed store openings.

While Linens 'n Things is expected to survive bankruptcy, any expansion plans likely have been shelved. The company is considering a so-called prepackaged bankruptcy, in which the company's creditors agree to a bankruptcy plan even before the filing in hopes of limiting the amount of time the company is in bankruptcy and helping improve the company's prospects upon emergence.

Deutsche Bank Securities analyst Lou Taylor forecasts that the average vacancy rate of public retail REITs will swell by two percentage points this year. Even with that setback, many REITs still will boast vacancy rates of less than 10% because of the gains they made during the recent boom. But such a decline would sap the REITs' growth in net operating income -- which averaged a 3.5% gain last year -- to something in the range of 0% to 1%, Mr. Taylor said.

The market shift has given tenants more bargaining power. In some cases, landlords are granting less-expensive rent or forgoing increases, covering more of tenants' costs in customizing their space or allowing struggling stores to move to smaller, cheaper space, among other options.

"The pendulum has swung from the landlord to the tenant," said Eric Termansen, president of retail brokerage Western Retail Advisors in Phoenix.

For example, shoe retailer Foot Locker, a top-10 tenant for most mall REITs, closed 26 fewer stores than it anticipated last year after reaching "some favorable deals with our landlords to keep some stores open," Chief Executive Matt Serra said in a call March 11.

John Johannson, senior vice president at property firm Welsh Cos. LLC, is allowing a national office-supply retailer to move from its 35,000-square-foot slot in a Welsh-owned shopping center in Minneapolis into an adjacent 25,000-square-foot space vacated by electronics retailer CompUSA Inc. Welsh didn't increase the retailer's rent and forgave the final two years of its initial lease in exchange for a 10-year extension. "We've satisfied a long-term tenant," Mr. Johannson said.

On the positive side, some retailers have plans to launch store concepts. Among the phenoms: Gilly Hicks by teen retailer Abercrombie & Fitch Co., Aerie by teen retailer American Eagle Outfitters Inc. and international upstarts such as Canadian sportswear retailer Lululemon Athletica.

Source: Wall Street Journal

Simon Malls invests $450M in Boston Area Malls

Simon Property Group is investing $450 million in large-scale renovations and expansions at several Boston-area properties, the company said on Thursday.

Three of the several projects that Boston-based Simon Property Group (NYSE: SPG) is developing include the Burlington Mall in Burlington; the Northshore Mall in Peabody and the South Shore Plaza in Braintree.

At the Burlington Mall an 85,000-square-foot wing will be complete on March 28 with the opening of Nordstrom, which will anchor the mall's new wing.

At the Northshore Mall, a 165,000-square-foot wing will be complete by the fall of 2008. The renovations will culminate with the addition of a 138,000-square-foot Nordstrom that will anchor the new wing and will open in 2009.

The South Shore Plaza is set to debut a slew of new tenants including Teavana on the South Shore, Lego and the children's clothing retailer Janie & Jack. The mall will also renovate several existing retailer space including Origins and Brookstone. The mall will begin construction on a new wing in the fall of 2008. In 2010, the South Shore Plaza will be the third Massachusetts Simon property to open a Nordstrom, which will be housed in the new wing.

"We're seeing our malls in Greater Boston maintain and grow market share, which helps us continue our commitment to providing consumers with the highest quality and selection of shopping possible and the magnitude of these projects pays testament to that," said Laurel Sibert, vice president of mall marketing, in a statement.

Source: Boston Business Journal

Copley Place to undergo expansion

Mall owner Simon Property Group said Thursday it is planning a major expansion of Copley Place, including a residential tower and a large addition to its Neiman-Marcus anchor store.

The expansion, first discussed with city officials in 2006, calls for 660,000 square feet of luxury residential space, 60,000 square feet for new shops and restaurants and an additional 54,000 square feet at Neiman-Marcus, as outlined in the initial papers filed this week with the Boston Redevelopment Authority.

A 4-season "winter garden" will be added to the main entrance of the complex at the corner of Stuart and Dartmouth Streets in the city's Back Bay. No additional parking is called for by Simon in the plan, which noted the proximity of nearby public transit stations.

The project is expected to bring about 1,700 construction jobs into the city, and eventually, to add from 250 to 270 permanent jobs at the complex.

The expanded Neiman-Marcus store and the winter garden will serve as the "base" of the residential tower, which calls for 300 condominiums and high-end amenities including a 24-hour concierge and spa services.

Source: Boston Business Journal