CPN - December 2008 - (Page 10)

MARKET INTELLIGENCE RETAIL ing a conference call last month, insisting that the high price tag and the scarcity of debt would make a deal impossible. Even if General Growth remains independent, it will likely come out on the other side smaller and shorn of some prize properties. Foreign investors, REITs and other real estate companies form the pool of likely takers, and these buyers will gravitate to a portfolio’s higher-quality assets, Marks explained. General Growth is scouting buyers for its Las Vegas trophy assets, including The Grand Canal Shoppes at the Venetian, the Fashion Show mall and The Shoppes at the Palazzo.“The good news is that at the asset level, there is not that much distress,” Marks said. —Reach senior associate editor Paul Rosta at paul.rosta@nielsen.com. The Rich Get Richer If stable REITs and sovereign wealth funds and other sound investors fatten up on the assets that struggling retail owners will be selling, the tenet that the rich get richer in troubled times will once again prove true. But this trend may also carry over to individual properties. The strongest assets, such as regional malls and lifestyle centers, will gain at the expense of their competitors, experts predict. “Times like this can be good for A-plus, fortress properties,” noted Tip Housewright, principal for Omniplan, a Dallas-based architecture and planning firm. “An irreplaceable site in the middle of a great demographic (area) is just going to continue to do well.” Psychology partly explains this phenomenon; people often think of going to a store or a shopping center as a social activity. Visiting a location that is buzzing gives them the sense that they have come to the right place. “No one wants to go to a property if no one’s there,” Housewright pointed out. “It’s an odd experience.” Retailers will doubtless bear this in mind as they whittle down the number of store openings. Malls that have managed to maintain foot traffic in demographically solid areas will rise as the locations of choice. Disney Store USA L.L.C., for example, wants to open 20 stores next year, including 10 within regional malls and one in Times Square. Given buildout costs and the state of the economy, similar large retailers will bypass secondary markets and look only at prime locations in the biggest markets, said Ivan Friedman, president & CEO of RCS Real Estate Advisors, which is advising Disney. On the regional spectrum, no areas of the United States can promise that their retail markets will become richer, yet some will certainly feel relatively less pain. A balanced economy and measured housingmarket growth make Texas more promising next year, said Michael Dee, an executive vice president of business development for Staubach Retail Services Inc. who is based in Dallas. “We haven’t experienced that astronomical residential growth that became unhealthy,” he argued. For similar reasons, Virginia, Georgia and the Carolinas may prove better bets than markets troubled by housing, such as California, Arizona, Nevada and Florida. 10 Commercial Property News • December 2008 • www.cpnonline.com http://www.transwestern.net http://www.transwestern.net http://www.cpnonline.com

Table of Contents Feed for the Digital Edition of CPN - December 2008

CPN - December 2008 Contents Starting Line Retail Data/Analysis Conferences Boston Market Profile Finance International Property Management

CPN - December 2008

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