Justine Griffin / Herald Tribune – Every year, the who’s who of the retail industry descends upon Las Vegas for the annual International Council of Shopping Centers RECON convention.
Held in May, thousands of mall builders, real estate professionals and retailer representatives get together to ink deals on new developments and projects.
This year, analysts say the conference was more upbeat than in years past.
“There’s a great deal of optimism and incredible healthy and strong views for expansion,” said Greg Miles, the chief operating officer for Westfield Group, an Australian mall operator that owns Southgate Mall and Sarasota Square Mall. “People are really focused on the consumer, and the American market is stronger than it’s ever been.”
That’s good news for Southwest Florida, too, which has seen a surge in development in recent years. The Mall at University Town Center, a $315 million luxury mall project that stalled amid the Great Recession, will open in October with brands like Apple, Anthropologie, Saks Fifth Avenue and a Cheesecake Factory inside.
Southgate Mall is being transformed into an outdoor entertainment-shopping-nightlife destination. New brands, like grocers Costco Wholesale, Wawa and Trader Joe’s, have expanded into the market.
John Lambert is the retail market lead for Jones Lang LaSalle, a real estate investment management company, in Orlando.
Lambert oversees business development and collaborates with clients to bring new retailers to Florida. He was in Las Vegas meeting with retailers and investment companies and trying to sign more deals in Florida.
Q: So what is different at RECON this year compared to last year?
A: There is a still a lot of redevelopment in place, like what we saw last year. We’re meeting with companies that work with Publix, which has 30 locations in redevelopment or about to start, this year. Chick-fil-A and Dollar General are among those that are focusing on upgrades and renovations this year. Redevelopment is still very much the focal point this year, as opposed to new sites. There are new deals in the works, but it’s still very limited. Some proposed site plans seem viable, but not many.
We’re still looking at a time period where redevelopment is more vogue as opposed to new sites.
We have a very busy booth this year. Everything from retailers to restaurants concepts are here. There’s a lot of energy in the room.
Q: What kind of retailers are looking to expand in Florida?
A: There are rumors of several new grocery brands looking at the Florida market. We’ve seen Trader Joe’s dive right in and Walmart has been very aggressive with big expansion plans for their neighborhood market formats. Those stores will continue to grow. But there are a few new brands, like Sprouts Farmers Market (a boutique grocery comparable to Trader Joes) and Cabela’s, a Nebraska-based outdoor supplies chain, (comparable to Dick’s Sporting Goods or Bass Pro Shops,) looking to open in the next year.
New grocery stores will have to go up against Walmart and Publix, which at least in the Orlando area, have saturated the local television channels with direct competition ads.
Bass Pro Shops, which is already in Florida, is expanding aggressively. We’re hearing about new stores in the Daytona and Palm City markets.
Q: What are some of the themes or trends this year?
A: More institutions are working together to make deals happen. Private investment firms are more willing to work with institutions to acquire sites in Florida. You’re starting to see groups be more creative and competitive and because of that, there are more joint ventures in the works. Similar to what you’ve seen Taubman Centers do with local real estate firm Benderson Development to build the Mall at University Town Center. We’ve also seen it on smaller scales.
Jeff Green is the owner of Jeff Green Partners, a retail consulting agency based in Phoenix. Green has experience consulting on a wide range of retail-related topics, from feasibility studies for development to sales projections for specific retail brands. He was in Las Vegas meeting with retailers and investment companies, keeping a close eye on trends and themes in the industry this year.
Q: What are some trends you’re seeing at the conference?
A: There’s still a lot of urban redevelopment and developers wanting to in-fill locations. We saw a lot of that last year too but it’s like on steroids this year. Most centers in development are mixed-use plazas that have a residential or hotel component to them. You’re seeing developers move away from office and retail space combos and go more residential and retail this year. There’s a lot of demand for that.
As for restaurants, you’re seeing the landscape change significantly. There are so many independent chefs that have multiple concepts in the marketplace, from a white tablecloth setting to fast casual. They’re starting to understand that they don’t need to have an upscale concept to make a name for themselves. Chefs can put their stamp on something that’s not in a high-end location. Informal concepts that appeal to younger customers and are value oriented can be just as successful. It’s all about the environment and the excitement of the brand these days.
Q: So finding a niche with younger shoppers is a big focus for retailers?
A: Oh my gosh, yes. You look at the booths here in Vegas — Church’s Chicken, Dunkin Donuts, Chipotle. By far, the busiest of those chains are the ones that appeal to the younger consumer. Developers are realizing this, too.
Greg Miles is the chief operating officer of Australia-based Westfield Group. Miles has more than 25 years of experience in commercial real estate and keen eye for retail. He has managed development projects with a consolidated project cost of more than $7.5 billion. Miles was in Las Vegas a year after his Westfield Group announced plans to redevelop Sarasota’s Southgate Mall at the gathering.
Q: Tell me about Westfield’s properties in Sarasota.
A: We plan to continue to invest in Sarasota and really improve the tenant mix there. We hope to announce new retailers in the coming months for both properties. But we’re elated at the success we’ve seen in the market so far. The addition of Costco (in 2012) to Sarasota Square Mall has made a tremendous difference to the mall traffic. Now our job is to leverage off that and drive the rest of the tenant mix.
We expect to bring new national and international names to the shopping center soon.
As for Southgate, we feel like we’re well positioned to be a strength in Sarasota and on Tamiami Trail. It really is the best location and closest to the wealthier parts of town. We have a mint opportunity to redevelop it to make it much more in tune with what the people want right there. There is a possibility of a grocery option there, too.
Q: What do you mean by building lifestyle centers instead of malls?
A: The term “mall” is antiquated. It means four to five department stores and fashion stores, which in a sense is relatively boring. We want to amp it up. Costco and the grocery component gives people more reason to leave home. We may see more transformations with grocery type tenants with JC Penney and Sears in the future, who knows.
But there is a demand to reinvent new centers and add tenants that really compliment the lifestyle of the shoppers we want to attract.
John Eggert is a director of development with Taubman Centers, one of the partner companies building and operating the Mall at University Town Center. Eggert deals specifically with the construction phase of the mall, and is in charge of making sure stores and built correctly and on time. He has worked on mall projects across the country, including centers in Honolulu and San Juan, which Michigan-based Taubman Centers plans to open in the next two years.
Q: We’re less than six months away from the Mall at University Town Center opening. How’s it going?
A: The mall is more than 90 percent leased and there is a lot of buzz about the opening. We’re on schedule and retailers are inside the mall now building their individual stores. There’s still a lot of work to do, but most of these companies really know how to build fast. They have it down to a science — some know they only need 120 or even just 60 days to be ready to open from start to finish. Usually the restaurants are a little slower compared to the retailers.
Q: What other projects, outside of Sarasota, is Taubman Centers working on this year?
A: Well, we plan to open a new mall in Honolulu in 2016 and then a new mall in San Juan, Puerto Rico, in 2015. Taubman is also building a few new malls in Asia, including two in China and another one in Korea.
Q: At ICSC RECON in 2013, Taubman executives were talking a lot about new technology that will help bridge the gap between online shopping and brick & mortar shopping. Anything new on that front?
A: The Mall at University Town Center will offer WiFi everywhere. We’ve also decided to offer free Wifi to all the retailers in the mall, which is something new that we haven’t done before. We hope the savings the retailers see there will enable them to do more with smartphone apps for the shoppers.
Q: Originally, plans for the Mall at University Town Center called for a fourth anchor. What’s the likelihood that we’ll see another department store, like Nordstrom or Neiman Marcus, join the mall?
A: The mall was designed to have that fourth anchor one day when the opportunity presents itself. In order to open a fourth anchor we’d have a new wing to add more in-line tenants inside the mall, too. It’s really about waiting for the right opportunity to come around. Right now, there are no plans to speed up developing that.