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Dominican Republic seeks retail

The Dominican Republic, which has only three malls, is courting U.S.-based retailers now that its economy is rebounding from the financial crisis and recession of 2003. Last year the Dominican economy grew by 9.3 percent, the fastest rate in Latin America, says Héctor Valdez Albizu, governor of the Central Bank of the Dominican Republic. The country’s tourism sector, meanwhile, grew 11.9 percent, according to Secretary of State José Rafael Vargas. Jones Lang LaSalle is teaming up with Dominican firm KS Investment to recruit U.S. retailers as tenants for the 200,000-square-foot retail portion of Malecon Center, a mixed-use, seaside facility in the capital city of Santo Domingo. The two-story center is connected to three towers housing 278 condominiums and a 228-room Hilton hotel, the island’s only five-star resort. The mall will provide a special opportunity for retailers looking to break into the newly stable Dominican market, says Judith Jose, Malecon Center’s director of operations. “This is the perfect moment to come over,” she said. “Dominicans love the U.S., and now that the free-trade agreement has gone through, American retailers can feel confident coming here.” The Hilton is a major selling point for retailers looking to enter, says Karen B. Raquet, an executive vice president at Jones Lang LaSalle. Burger King, Pizza Hut and Taco Bell are already on board. Officials hope to have U.S. retailers open for business by the fall

Driver’s education

Retail site selectors frustrated with drive-time estimates that fail to account for natural obstacles now have a solution to their woes. “In the old days retailers would say, ‘Show me drive times from five, 10 and 15 minutes away,’ but then you’d try to drive them, and you’d find a lake or a river in the way,” said Olivia Duane-Adams, an executive vice president at Orange, Calif.-based software developer SRC Co. Her company’s new Portfolio Guzzler software program follows road networks and differentiates between bumpy county roads, city streets and assorted topographical features.

Jobs’ cube

Apple Computer opened its second store in the New York City borough of Manhattan in May, a 24,000-square-foot, subterranean space on Fifth Avenue. One of the sticking points in the lease negotiated between Apple CEO Steve Jobs and landlord Harry Macklowe was the ultimate fate of the store’s iconic, 32-foot glass cube, which cost $9 million to build. “Steve Jobs felt he created it, so he owned it,” broker Robert K. Futterman told New York magazine. “At the eleventh hour, that was the biggest issue.” Futterman told the magazine that when Apple’s 20-year lease is up, Jobs will have to replace the cube with another structure.

Ranch dressing

Developers have been lining up to team with resort and spa operator Canyon Ranch, which targets the top 5 percent of U.S. income earners. Three new developments were recently announced, in Bethesda, Md., Chicago and Miami. The Penrose Group, Tysons Corner, Va., will join Canyon Ranch on the Bethesda venture, a $600 million Canyon Ranch resort that is to contain a 157-room hotel and two 20-story towers with 434 condominiums and 87 luxury apartments. A 90,000-square-foot wellness complex will round out the concept. The Canyon Ranch project will serve as a luxury anchor for the $400 million mixed-use development that Penrose is building on an adjacent property. “A lot of upscale retail is moving toward these kinds of mixed-use urban resorts,” said Stan Laegreid, a principal of Seattle-based Callison Architecture. “They have a hospitality quality and a luxury attitude. And they are very retail-driven.”

Condo conundrum

Condominiums could be a big threat to sustainable mixed-use development, some developers say. While residential condos are wildly popular at some new developments, and office condos are helping to bring in more local tenants at others, the endgame will be a developer with few redevelopment options. “If you want to tear something down in 20 years,” one executive said, “your hands are tied, because you’ve given away ownership.”

Curbing comps

The Home Depot says it will no longer share same-store sales data with investors, making it the first major U.S. retailer to abandon the widely used metric. In the first quarter, Home Depot for the first time separated its business into two operating divisions and reported separate financial results for the two. The Home Depot Retail division will cover the company’s catalogs, stores and Web site, while the Home Depot Supply division will represent the direct-to-contractor business.

“For comparability purposes, we have moved away from comp-sales reporting and now will provide sales growth for both segments as a percentage change over the prior period,” CFO Carol Tomé said on a conference call. “Home Depot will continue to provide sales per square foot and weighted weekly sales revenue data to investors.”

Other retailers have questioned the metric. Sears Holdings Corp. and Wal-Mart Stores have expressed desire in the past to abandon same-store sales reporting. Both have said the method does not accurately reflect their growth. Same-store sales are not sympathetic to some retailers’ market-share-gaining strategies. And they can be used to inflate sales productivity, observers say. Notwithstanding all of that, both Sears and Wal-Mart did report same-store sales for the most recent quarter.