Shopping Centers Today -> February 2008
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LANDLORDS GET GREEN LIGHTS, DEPARTMENT STORES LINK UP, AND CALIFORNIA CURBS PRIVATE-PROPERTY RIGHTS

LEDS THE NEXT SUSTAINABILITY FIX FOR SHOPPING CENTERS

Light-emitting diode technology could be the next bright idea for landlords looking to boost the environmental sustainability quotient of a property. LEDs are much more efficient than traditional incandescent light bulbs, experts say, with a life span of between 100,000 and 1 million hours, versus just 2,000 hours for incandescent bulbs. And LEDs generally use less current than their incandescent counterparts. Further, LED proponents say that cutting back on power consumption reduces not just operating costs but also the wear on transformers, batteries, converters and other components. Some European landlords already use LED technology. Multi Development's Multi Turkmall developed its Forum Boronova center, in Izmir, Turkey, with LED and other "economical" lighting systems in the common areas.

In the U.S. LED technology is still taking root. Landlords and retailers here use it to create special displays. Last year General Growth Properties used LED lights on a Christmas tree at its Westlake Center, in Seattle. This year the firm says it will require that all Christmas decor employ LED lights exclusively. "The LEDs really have potential," said Lisa Loweth, General Growth's vice president of sustainability. "And not only from the decor angle. It's often the invisible things that could create the most efficiency. It takes a little bit of courage, but we're working to prioritize based on the impact, not based on the visibility." General Growth has begun to implement a lightbulb replacement program for its malls; the firm is working with Sylvania Lighting and Regency Lighting to determine which fixtures and lights would create the most-efficient systems. So far the firm's newly installed lights account for about 11 percent of its energy savings for the year, says Loweth.

Simon Property Group says it, too, is using LEDs, mainly for display purposes. Among retailers, Wal-Mart and Nokia have been adopting LED lights too. Wal-Mart has used them for refrigerated-cooler lighting and store signage, while Nokia has put them up inside several stores for display lighting. Design Forum, which has created accent lighting for T-Mobile, Golden Corral and others, says LED lights are gaining popularity but have yet to reach the mass-usage stage.

"We're using [LED] a lot in different applications, but it's not quite ready for prime time," said Tim Raberding, Design Forum's vice president of engineering. "Right now it's used for highly specialized things like signs and display cases. For general lighting, it's going to be awhile."

DEPARTMENT OF SYNERGIES

European department store chains Karstadt, Printemps and La Rinascente say they will join forces to achieve synergies in marketing and merchandising. Each chain will buy stakes as large as 25 percent in the other two and serve on one another's directorial boards. The venture is connected to a sale-leaseback in which Karstadt's parent, Arcandor, sold 49 percent of its department store real estate for about $4 billion to a consortium that includes Italy's Borletti Group, owner of La Rinascente and Printemps. The deal involves Karstadt's four premium department stores, located in Berlin, Frankfurt, Hamburg and Munich, but not its 127 midmarket department stores and sporting goods stores throughout Germany.

"The premium segment still has great growth potential, both throughout Europe and beyond," said Peter Wolf, chairman of Karstadt Warenhaus, in a press release. "Together with our partners, we will rapidly expand the Premium Group further, ultimately setting a clear market leadership in Europe's luxury segment.''

La Rinascente operates 14 stores in Italy, and Printemps has 17 units in France, including the Parisian flagship. Arcandor says it managed to complete the real estate deal despite the global credit crunch thanks to Karstadt's good credit status and the high-profile locations in the portfolio. "We are extremely satisfied with the basis upon which the real estate transaction will be consummated," said Arcandor CEO Thomas Middelhoff in a press release. "It was the quality of our portfolio and the credit- worthiness of the tenant Karstadt that made this agreement possible under the current difficult market conditions. And we managed to achieve a valuation in line with our initial expectation and significantly higher than the current book value of the assets despite the financial market crisis."

Court: No mall can protest the protests

California shopping center owners have no right to keep demonstrators from calling for the boycott of a tenant on mall property, the state Supreme Court ruled in January. The 4-3 decision found San Diego's Fashion Valley Mall in violation of free speech when it prevented protestors from urging shoppers not to patronize the mall's Robinsons-May store. The ruling does allow landlords to enforce "time, place and manner" restrictions on such activities at their properties, but prohibits any all-out barring of political speech, even if it could be construed as harmful to the property's business. The ruling puts property managers on notice, says Thomas J. Leanse, an attorney in the Los Angeles office of Katten Muchin Rosenman, who represented ICSC in its amicus curiae brief. "This ruling will likely embolden the unions and make them more aggressive in their tactics at shopping centers in California," Muchin said. "Unless the shopping center industry is prepared to put more money into the fight to enforce time, place and manner rules, we will see further erosion of private-property rights and landlords' control over the common areas."

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