CONTENTS

December 2007

• FEATURES
• Mixed-use grapples with its weakest link
• Theory has it that mixed-use developments would withstand a real estate slump better than single-use properties. Now the theory is being tested. By Joel Groover
• Less risky business
• The U.S. House of Representatives has passed a measure to extend the Terrorism Risk Assurance Act . By Kerri Linden
• Thriving in Foreclosure City, USA
• Stockton, Calif., has seen more foreclosures per capita than any other city in America, but that doesn’t appear to faze its retail landlords. By Jennifer Hopfinger
• Another U.S. developer heads to Brazil
• CBL has signed a joint venture with Brazil’s Tenco Realty to develop, acquire and redevelop shopping centers across Brazil. By Kerri Linden
• A new frontier for real estate derivatives
• The day is not far off when U.S. real estate investors will think in terms of “going long” or “short.” They are doing it already in other countries. By Dees Stribling
• The industry learns to blog, pod and video
• News release, snooze release — marketing executives have discovered that blogs, pods and video-sharing is the way to get the word out these days. By Rodger Brown
• Big deals
• A look back at the acquisitions and mergers that most got our attention over the past year. One deal created one of Europe’s largest landlords. By Steve McLinden
• Where are they now?
• We revisit some of the year’s big issues, including EuroREITs, border restrictions and hot new retail concepts, some of which got cool receptions. By Kerri Linden
• Multiple Hats
• Some landlords are consolidating leasing and marketing functions under one executive.
• Finding green contractors
• With sustainable development still in the pioneer stages, good green contractors can be difficult to find. By Steve McLinden
• The world improves itbuss iness districts
• BIDs — business improvement districts — are a North American concept that are now catching on elsewhere in the world. Britain has 54 of them. By Steve McLinden
• Development by ballot box
• Every proposed development would need the approval of voters if a group called Florida Hometown Democracy gets its way. By Dees Stribling
• Retail on Wall Street
• Posh retailers are following the money and opening stores on Wall Street, and some are already finding the move has paid off, despite mortgage market and bonus squeezes. By Jesse Serwer
• Decking the malls
• Tastes can differ sharply when it comes to holiday decorations. What are some of the rules landlords impose to avoid aesthetic anarchy during Christmas? By Kathy Showalter
• Latin America’s mixed-use embrace
• Mixed-use centers are sprouting across an increasingly affluent Latin America as developers seek to make full use of ever-pricier sites. By María Bird Picó
• Micronesia shops for retailers
• As tourists flock to Micronesia from Asia and elsewhere, so do retailers. By Steve Bergsman
• Peru’s retail boom
• A measure of Peru’s sustained economic development is the number of shopping centers going up around the country, fueled in part by a flood of foreign investment. By María Bird Picó
• Drought dilemma
• Water issues could hurt new retail developments in the Southeast.




• DEPARTMENTS
• Center Stage
• General Growth Properties has restored Oakwood Center, and with it the morale of a whole community near New Orleans.



• The Common Area
• Parking lots as billboards, malls as art galleries and other notable topics from the world of retail real estate — including four-legged landscapers



• Retailing Today - A look at some tenants of the tenants that, sooner or later, might come knocking at your mall


• Rethinking food stamps
• Retailers are hailing technological improvements to the food stamp program.
• Juiced up
• The Juice It Up franchise is doing just that, with plans to open 50 juice bars a year.
• Spencer’s rides again
• Actually, the chain of knick-knack stores never closed, though it did hit a slump. It’s back.
• Girl-powered
• Love Culture This new concept wants to win the hearts of fashion-forward but frugal young women.
• Fat fighters
• Clinics offering weight-reduction cosmetic treatments are increasingly setting up shop in centers.
• Larger-than-life fitness
• Life Time Fitness facilities are so big they are better described as health malls than gyms.
• Gottschalks’ diet
• While other department store chains swell through consolidation, Gottschalks plans to shrink.
• Space Apothecary hops the pond
• The U.K. beauty retailer is planning for a major U.S. presence.
• Ecko’s next step
• Marc Ecko made a fortune selling his merchandise without opening a store. Now come the stores.
• Russian risqué
• Russia’s Wild Orchid lingerie retailer has opened its first stores in Western Europe.
• Power to the consumer
• Mexico’s biggest appliance retailer also wants to be its customers’ favorite bank.
• Greener still
• Energy ratings like those on appliances are now being applied to retailers.
• Hallmark plays a card
• America’s leading greeting card company has revamped its stores.

• On the Ground
• On the Ground: Williamsburg, Brooklyn
• On the Ground: Kuala Lumpur
• On the Ground: Champs-Elysees

 

• ICSC News
• Delegates attending October’s Fall Conference donned work clothes and tools, and helped fix up homes and schools damaged by Hurricane Katrina.



• News Makers
• Maitland Bruce oversees the U.S. bank’s expansion into Europe.
• Macerich’s Tracey Gotsis is exploring new frontiers in marketing.



• The Bottom Line
• Various reverberations from the subprime mortgage meltdown are being felt by retail estate executives. Investors are increasingly referring to themselves as bears, and open-air vacancies are up slightly.

Environmentally friendly leasing

In Banff, Alberta, landlord Arctos & Bird is trying to be socially and environmentally responsible while turning a profit by applying the “triple bottom line” principal to leasing. In its simplest form, the idea encourages businesses to focus on their financial bottom line as well as two other bottom lines: the well-being of the community and the environment.

When Arctos & Bird developed Bison Courtyard on Bear St., in Banff, a popular tourist destination and town in Banff National Park, it decided to apply the concept of the triple bottom line to retail leasing. Bison Courtyard, completed in 2005, is a 30,000-square-foot mix of retail, restaurant and residential space and is currently in the process of being gold-certified by the Canada Green Building Council (equivalent to U.S. LEED). But the developers wanted more than just a green-oriented building. “We wanted our tenants to have the option of participating in the building’s sustainability, and the triple bottom line concept helped give them an incentive to do so,” said John Harrop, Arctos & Bird’s director of operations.

In many respects, tenants at Bison Courtyard have signed an ordinary triple-net lease, but there is an extra provision in their leases. “What we do is offer a rebate of a dollar a square foot for a tenant’s environmental initiatives, and a dollar a square foot for community or social initiatives,” said Harrop. “Once a year the tenant demonstrates what they’ve done along those lines, and we decide whether or not they qualify for the rebate.” Triple bottom line leasing at Bison Courtyard has been through one annual cycle thus far and is in the middle of the second. The program has been successful enough that Arctos & Bird will incorporate the concept into lease renewals at its two other properties in Banff. “It’s helped establish our brand as something unique,” he said, “both for us and our tenants.”

— Dees Stribling