By SCTWeek, Friday, February 21, 2014

Retailers make water conservation a priority

High-profile merchants known for aggressive water conservation have begun leaning on their suppliers to follow suit. Walmart, which uses water controllers and drip-irrigation systems on its store landscape, started pressing its poultry suppliers in 2010 to scale back their water consumption. Swedish fashion stalwart H&M last year teamed up with the World Wildlife Foundation to implement a water strategy for its suppliers and workers worldwide. H&M designers and buyers are urging their 750-plus suppliers to go easy on the water, particularly those tapping into China’s receding Yangtze River and Bangladesh’s Brahmaputra River. “This is about stewardship,” said Helena Helmersson, H&M’s head of sustainability. “We want to become a leader to take responsibility in the whole value chain.”

Similarly, British supermarket chain Waitrose and its department-store sister company John Lewis are calling on their suppliers to reduce water use. Owner John Lewis Partnership says it seeks to ease company water consumption by some 20 percent this year, relative to 2011. U.K. supermarket chain Sainsbury’s unveiled its first “water-neutral” store last October, in the Weymouth Gateway center, Dorset, England; the store meets most of its water needs through rainwater harvesting and a water-efficient infrastructure. A second water-neutral Sainsbury’s store opened in Leicester last November. Sainsbury’s says it has cut consumption by about 50 percent relative to 2005–2006. U.S. grocery chain Fresh & Easy says it is reducing water use by roughly 30 percent through a water-treatment system for its cooling towers and condensers. And Starbucks reports that a water filtration system it created in 2011 has cut water waste at its shops in half.


By SCTWeek, Friday, February 21, 2014

Walmart to bet big on smaller stores

Wal-Mart Stores announced that it would accelerate its capital plan for small-format store openings in the U.S. The company now plans to double its original forecast from last October and roll out roughly 300 small stores. Walmart U.S. will keep to its plan to open 115 Supercenters this year. “Customers’ needs and expectations are changing,” said Bill Simon, the Walmart U.S. president and CEO, in a press release. “Customers appreciate the broad assortment of our Supercenters for their stock-up trips as well as our small-store formats for fill-in trips. By unlocking this growth opportunity and further combining our Supercenters and small-store formats with an unlimited selection available through e-commerce, we provide our customers with anytime, anywhere access to our brand.”

Same-store sales for Neighborhood Market stores grew by about 4 percent for fiscal 2014 (the year ends Jan. 31). Walmart operates 346 Neighborhood Markets and 20 Walmart Express stores. The retailer says the Express units have performed well and are being expanded beyond the initial three-market pilot. Walmart U.S. is projecting that fiscal 2015 will close with net square footage growth of about 21 million to 23 million square feet across all formats, up from an initial projection of 19 million to 21 million square feet.

The company is revising its Walmart U.S. capital expenditures forecast to between $6.4 billion and $6.9 billion, up from an initial $5.8 billion to $6.3 billion. This reflects the increased small-store growth and the current pipeline of Supercenters, which remain an essential part of the company’s strategy. Across Supercenter and small-store formats, Walmart U.S. plans to open somewhere between 385 and 415 units in fiscal 2015, adding to the roughly 4,200 stores currently open.


By NPR, Sunday, February 17, 2014

Demographic Shifts Contribute To The Changing Face Of Retail

So far this year, retail chains have announced some heavy cuts. J.C. Penney said it would . Macy’s said it would . Sears will close its flagship Chicago store in April.

That’s creating a glut of excess space. But that’s just one of several forces changing the face of retail.

Jason Moser, an analyst at Motley Fool One, focuses on one key number in retail: revenue per employee. In Amazon’s case, every person the company employs generates an average of $800,000 in sales. For Best Buy? The number is much less than half that.

“What that means is that Amazon is able to do a lot more with a lot less,” Moser says.

Read more…


By Forbes, Monday, February 18, 2014

Are Grocery Stores Doomed?

Study Shows More Shoppers Buying Food At Target, Walmart, Pharmacies…

Thanks to a proliferation of press attention (guilty as charged), it may often seem like Whole Foods, Trader Joe’s and farmers markets peddling organic kale are today’s favored grocery shopping destinations.

Not so, according to a new study published by retail design firm King Retail Solutions in conjunction with the University of Arizona’s Terry J. Lundgren Center for Retailing.

In fact, more than ever, consumers are looking to big box stores like Walmart and Target as well as convenience stores, dollar stores and pharmacy chains including Walgreen ’s and CVS to fulfill their grocery lists.

Read more…


By Shopping Center Business, Saturday, February  16, 2014

Property Management Trends to Watch in 2014

Leasing activity is increasing, and confidence is up! New tenants are turning the once-dark vacancies into new opportunities and, with this increased activity, landlords’ outlooks and expectations for their shopping centers have shifted once again.

About 209,000 square feet of space was absorbed in the fourth quarter of 2013, according to a published report. Quoted lease rates leveled off at $14.54 per square foot, another sign of recovery.

When the market was at its weakest, some landlords agreed to rent reductions for struggling tenants. The lower amounts were often supported with proof of modifications made to business practices in a slowed economy.

Read more…


IN TRIBUTE TO THE WONDERFUL WOMEN OF CBM…

CBM Valentine's Day Brunch

Not sure why only guys made it into the ladies Valentine's Day Brunch pix?

CBM President, Rick Rivera, hosted a Valentine’s Day brunch in tribute to the women of CBM this past Friday (Valentine’s Day). Held on the rooftop patio of CBM’s West LA office, the gathering was organized as special thank you to the women to of CBM. As the heart and soul of CBM’s operation, our success is due in large part to their great work and tremendous effort.

The brunch featured a gorgeous spread, including breakfast bagel sandwiches, muffins, pastries, orange juice, coffee and assorted cupcakes — just for good measure. (Many thanks to Einstein Bros Bagels on Pico Blvd. for whipping up the very tasty treats!)

All of CBM’s ladies were in attendance, representing our accounting and administrative departments as well as our property management team. And even a few (well, a lot more than a few) of the guys showed up, too.

Regardless of their gender, all on hand enjoyed a delicious brunch, a good chat with co-workers and great time in general.

Perhaps this was merely the 1st Annual CBM Valentine’s Day Brunch…?


CBM Exhibits at ICSC Idea Exchange

Idea Exchange CBM Team
Los Angeles, CA – February, 2014 – CBM exhibits at the ICSC Idea Exchange event and The LA Convention Center in Downtown Los Angeles.

Centers Business Management (CBM) exhibited at the International Council of Shopping Centers Center (ICSC) annual SoCal Idea Exchange event last Wednesday, February 5th at the LA Convention Center in Downtown Los Angeles. CBM was joined by 200+ Commercial Real Estate firms, Tenants, Municipalities and Vendors for the Idea Exchange’s first year at the LA Convention (having relocated from its previous home at the Long Beach Convention Center). Relocating to the LA area (with its higher retail broker concentration), Downtown LA’s resurgence and the overall improvement in the retail sector were all contributing factors to record attendance and the event’s overwhelmingly positive reception.

The combination of above average attendance and hosting the event in a smaller room (about a third smaller than Long Beach) created a frenetic energy amid the afternoon’s official “Deal Making” session. Activity was high and the networking intense as attendees and exhibitors were packed in, shoulder to shoulder, transacting business at a full tilt.

Idea Exchange CBM Table 1

CBM Director of Leasing, Geoff Grossman, was the most effusive in his assessment:

“Every broker and investor I spoke was pumped with tons of enthusiastic and positive energy. Everyone’s convinced 2014 is going to be a banner year.” Geoff summed up the event stating “What a great way to kick off the New Year!”

CBM Valley Division Director, Dave O’Connell, echoed Geoff’s positive sentiment, while also expressing reservations: “Lots of restaurants and service based businesses in expansion mode. But the lack of shop space sized retailers continues to be a concern, particularly with tenants like Radio Shack downsizing their retail operations.” Ultimately Dave emphasized the need for creativity among brokers to fill general retail vacancies.

CBM West LA Leasing Agent, Alex Shabani, was impressed with the turnout and felt the positivity in the air: “There was a definitely a positive vibe. And most tenants (represented at the event) are expanding and looking for new locations.” Alex also managed to get some deal making done, “I made a couple of new contacts and actually received an offer.”

Idea Exchange CBM Table 2

CBM President, Rick Rivera, was approached by a landlord seeking management for a large retail portfolio as he was leaving the venue. After trading contact info with the prospect he commented that “This event just paid for itself.”

In general, all in attendance seemed very pleased with the new Downtown LA location. The reception following the deal making session, held at the LA Live Marriot’s ION Rooftop Patio, was abuzz with broker’s praising the revitalization of Downtown LA.

To find out more about the ICSC Idea Exchange, visit their events page online at: www.icsc.org/events-and-programs. And to find out more about CBM, please contact: Rick Rivera at 310.575.1517 x201 or rickr@033ee62.netsolhost.com.


By SCTWeek, Friday, February 14, 2014

Retail REITs boost operating income in fourth quarter

Strong demand from retailers helped landlords boost income at their properties during the fourth quarter. At DDR Corp., leasing spreads grew by 13.9 percent year on year for new leases and by 7.9 percent on renewals, driving same-center net operating income up 3.1 percent. “We expect operating metrics to accelerate further in 2014,” said Daniel B. Hurwitz, DDR’s chief executive, in a press release. At Regency Centers, same-center NOI grew by 2.7 percent in the fourth quarter, thanks in part to a 10.7 percent year-on-year increase in the rental rate on new leases and a 5.6 percent increase in the rental rate on renewals. Federal Realty Investment Trust reported a 4.3 percent rise in same-center NOI for the quarter. “2013’s completed leases, which overall were written at 20 percent higher than the prior tenant, will serve as a great start to 2014 growth,” said Federal Realty President and CEO Donald Wood. Meanwhile, Kimco Realty Corp. had a busy quarter bringing in higher-paying tenants to occupy former Kmart and Sears spaces, among other activities. In Ocala, Fla., Kimco re-leased a vacant Kmart box to Burlington Coat Factory for a 179 percent rent increase. “We continue to monitor our tenant watch list, as we believe, in this environment, recapturing boxes will create strong leasing spreads and redevelopment opportunities,” said COO Conor Flynn. Same-center NOI at the firm rose 4.1 percent during the fourth quarter.

Among mall REITs, increased rents helped boost fourth-quarter profits, as well. General Growth Properties’ same-center NOI increased by 6.2 percent, thanks in part to strong leasing that is carrying over into 2014, said CEO Sandeep Mathrani. “We’ve completed over 70 percent of the leasing required to achieve our 2014 goal,” he said. At Macerich average base rents increased by 8.7 percent year on year, while same-center NOI increased by 4.9 percent. “This increase was driven by increased occupancy, positive re-leasing spreads and annual CPI increases on leases,” said Thomas E. O’Hern, the firm’s senior vice president, CFO and treasurer. Meanwhile, at Taubman Centers’ upscale properties, tenant sales set a company record of $721 per square foot. Same-center NOI grew by 1.9 percent, while average rent per square foot increased by 3.7 percent year on year. CBL & Associates Properties reported an 11.8 percent increase in average base rent year on year and a same-center NOI increase of 0.9 percent.


 By LA Times, Thursday, February 13, 2014<

San Gabriel becomes brand-name destination for Chinese tourists

These are boom times for the once quiet suburb of San Gabriel, which is in the midst of a transformation built on the growing international reputation of its Chinese food and services.

Statistics show about a third of Chinese tourists who travel to the United States spend at least some time in Los Angeles. Some are shunning coastal resorts and Beverly Hills opulence in favor of San Gabriel, a city of 40,000 best known for its historic mission.

“San Gabriel is famous in China,” said David Lee, chief executive of Hing Wa Lee Group, which recently opened a flagship jewelry store in San Gabriel a few hundred feet from a Hilton hotel, where many Chinese tourists stay. “It has become a brand-name destination.”

The tourism boom has helped spark new development. A 316-room Crowne Plaza Hotel is slated to open next door to the Hilton in 2015, taking over an overgrown lot that once housed a Norm’s restaurant.

Hilton developer Sunny Chen is applying to build another hotel right next to that at the site of an old furniture store. With no beaches, no major landmarks and few A-list shops or restaurants, San Gabriel is an unlikely tourist destination.

Read more…


 By SCTWeek, Friday, February 7, 2014

Net-lease big-box cap rates shrink: Report

Sluggish retailer expansion and intense competition among investors is making net-lease big-box deals more expensive, according to The Boulder Group. The national cap rate on net-leased big-box stores fell by 63 basis points year on year in the fourth quarter, to 7.1 percent, the firm says. Even so, net-leased big boxes are trading at a 25-basis-point discount to other net-leased retail types. The average cap rate for the net-lease retail sector overall in the fourth quarter was 6.85 percent, Boulder Group says.

Big-box properties leased to national credit tenants were the most popular with investors, but most of the credit tenants expanding these days — including Costco, Target and Walmart — tend to own their stores. These high costs led many investors to buy properties they might have avoided in the past, including those leased to such noncredit tenants as Academy Sports, Best Buy and Hobby Lobby, according to research director John Feeney’s analysis in the Boulder Group report.

The firm predicts that the number of big-box transactions will pick up later this year, despite a continued lack of new property developments. “The low supply of new construction assets should be offset by maturing CMBS loans,” wrote Feeney. “Property owners with maturing debt will have the option to either refinance at low interest rates by historical standards or sell to take advantage of the low cap rates available.”