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| The Retailer Area was Packed at ICSC RECon 2008. |
More than 20,000 commercial real estate industry professionals and service providers are preparing to head to Las Vegas for RECon 2009, the International Council of Shopping Centers' (ICSC) Annual Spring Convention, which starts this Sunday, May 17th, and runs through Wednesday, May 20th. In addition to offering "deal-making" resources for your use in today's CoStar Advisor, CoStar Group will also have a major presence at the convention, exhibiting its substantial platform of commercial real estate information and marketing services -- be sure to visit us at Booth # 1014 in the South Hall, Section S1.
According to ICSC's current attendee list, more than 8,400 retail leasing agents will be present at RECon this year in search of opportunities to lease both new and existing retail space. In this article, we highlight some of the major tenants exhibiting at the conference that are actively seeking retail space to lease.
To download our guide (excel spreadsheet format) to potential tenants with booths at RECon that includes tenants' growth plans and typical square footage requirements, click here.
This year's retail tenant exhibitor roster (located in the South Hall, primarily section S4) outlines a definite trend in the retail commercial real estate marketplace. The hall is overwhelmingly comprised of tenants that fall under the discount / affordable retail and dining categories -- they include both well-established and emerging names in segments including warehouse clubs, closeout stores, dollar stores, discount department stores, affordable apparel, check cashing, thrift stores, pawn shops, discount grocery, affordable hair salons, quick service restaurants, and diner-style casual restaurants.
Alternative tenant types are also well represented, including a couple fitness center operators, childcare center concepts, indoor entertainment concepts, and seasonal / temporary tenants. Necessity-based tenants, such as grocery stores, gas / convenience stores, and drug stores make up the remainder, along with one or two retailers in the home improvement, pet supply, sporting goods, media, pack/ship, and auto supply/repair categories.
DISCOUNT
Big Lots Opening 45 Stores in 2009; Capitalizing on Real Estate Market
ICSC Booth: S328 S STREET, South Hall S4
Big box closeout retailer, Big Lots plans to open 45 stores in 2009, which is more than the company has opened over the last three years combined. On May 15, Big Lots is celebrating the opening of a new store at Polaris Towne Center in Columbus, OH, which will be the company's first new store in the region since 2005.
“This is the kind of location we couldn’t touch in the past,” said Big Lots CEO Steve Fishman. “Now that our performance has improved and there is a good supply of valuable real estate available, we can capitalize on prime real estate opportunities like Polaris." The company took over a former 35,000-square-foot Linens 'n Things space, located across from the Polaris mall -- which is a departure from Big Lots' typical stores in community shopping centers. The average Big Lots is 30,000 square feet and the company currently operates more than 1,300 stores in 47 states.
GROCERY
Supervalu to Open 50 to 60 New Save-A-Lot Stores in the Coming Year
ICSC Booth: S346 N STREET and S396 Q STREET, South Hall S4
Supervalu, in its recent fiscal 2009 report, said the company has grown to 2,421 retail grocery locations in the U.S., which includes 1,178 Save-A-Lot stores and 1,243 stores under banners including Albertsons, Biggs, Sunflower Market, Shop N Save, Shaws, Jewel-Osco, Lucky, and more. In the coming year, Supervalu will be focused on remodels within its traditional store formats (105 to 120 remodels are planned), but will also open three new traditional stores. Save-A-Lot, however, is planned to surge ahead with its discount grocery format, with 50 to 60 new stores planned to open in the coming year. The typical Save-A-Lot is 15,000 square feet and located in a neighborhood or community shopping center.
APPAREL
Dressbarn Opening 85 New Stores in 2009
ICSC Booth: S 320 N Street, South Hall S4
Dressbarn (NYSE:dbrn) is on track to open 30 new Dressbarn and 55 new Maurice's stores and close 22 Dressbarn and five Maurice's stores during 2009. Dressbarn is primarily opening stores in its combo format, which requires 7,000 to 8,000 square feet; 40' to 70' of frontage; a five-mile trade area population of 120,000 and average annual household income of $45,000. Additionally, Dressbarn prefers to locate in power, community or regional shopping centers of 150,000 square feet or larger, or downtown areas and outlet centers. Maurice's, the company's banner targeted to younger women, has an average store size of about 5,000 square feet and is typically found in malls or regional shopping centers.
HAIR SALONS
Regis Corp. Opening 172 New Salons in 2009
ICSC Booth: S310 Q STREET, South Hall S4
At the end of March, Regis Corp. operated 7,202 stand-alone hair salons in North America, plus 2,409 salons within Wal-Mart stores. Through both corporate and franchise growth, the company expects to add 172 net new salons this fiscal year, which compares to 312 salons last year. At a recent analyst conference, Regis said it expects to close or get rent relief for up to 110 stores this year, and added that it is working to strengthen its liquidity.
Regis operates 32 different hair salon banners in the U.S., but its most well known include Regis, Mastercuts, Supercuts, Hair Masters, Borics, and Sassoon Salon. The company's salons range from 500 to 5,000 square feet, but the typical salon is 1,200 square feet and located in a regional mall, neighborhood, or community shopping center.
Sport Clips Opening 60+ Shops This Year
ICSC Booth: S3341 Thirty Third Avenue, South Hall S4
Sports-themed hair cutting chain, Sport Clips, has grown 640 stores strong across the country. The company recently announced its expectation that its 700th store would open later this year. Sport Clips' typical store is 1,000 to 1,500 square feet and located in a shopping center with an anchor store geared toward men, such as Home Depot, Lowes, or Dick's Sporting Goods.
GAS / CONVENIENCE STORE
7-Eleven Adding 200 Stores in 2009
ICSC Booth: S383 Q STREET, South Hall S4
Convenience store operator, 7-Eleven, plans to add 200 new stores during 2009, compared to 170 new stores last year. The company is "evaluating sites for new development opportunities with other landlords who may be experiencing lease defaults or retail flight by their current tenants."
According to its website, 7-Eleven's general store requirements call for a corner location at a highly-visible and accessible site with 2,000 to 3,000 square feet of store space -- ability to sell beer and/or wine is preferred, as is the ability to operate 24 hours a day. Current targeted growth markets include Los Angeles, San Diego and the Bay Area; Denver's "Front Range"; Daytona, Fort Myers, Orlando, Tampa, and Miami; Chicago; Detroit Metro; Northern New Jersey; Las Vegas; Long Island; New York City; Baltimore; Portland; Newport News, Norfolk, Virginia Beach, Metro Washington, D.C.; Dallas/Fort Worth, Austin; and Seattle.
FITNESS CENTERS
Anytime Fitness Expects 900 More Clubs to Open by the End of 2010
ICSC Booth: S 319 N Street, South Hall S4
St. Paul, MN-based Anytime Fitness opened its 1,000th fitness center in January 2009. At the time, the franchisor's CEO, Jeff Klinger said, "In two or three years we’ll have at least 2,500 clubs open in the U.S. and we’ll have another 750 clubs open internationally." By the end of 2010, Klinger predicts there will be 2,000 clubs open. As of March 2009, Anytime Fitness reported "more than" 1,100 clubs open in 47 states. According to CoStar Tenant, the average Anytime Fitness is 4,285 square feet. The company said its clubs are "frequently located in smaller, less-densely populated areas where they are often the first and only fitness option for local residents."
CHILD CARE CENTERS
Children of America Childcare Centers to Open 12 Locations in 2009
ICSC Booth: S324 N STREET, South Hall S4
Children of America, a subsidiary of Worldwide Childcare Corp., currently has 23 childcare centers open in Delaware, Maryland, New Jersey, New York, Pennsylvania and Virginia. The company plans to open 12 new centers during 2009.
For its freestanding locations, Children of America seeks a 1 to 1.5-acre lot with room for 25 parking spaces for an 8,500 to 10,000-square-foot building and a 4,000-square-foot playground area. The company prefers a minimum traffic count of 15,000; and a minimum population of 3,000 children age four and under in a three-mile radius, with parents bringing in a median household income of $60,000. The company also has a two-story prototype, which involves a 10,000 to 12,600-square-foot building on a 3/4 to 1-acre lot that has room for a 5,000-square-foot playground; as well as an end-cap prototype for an 8,500 to 10,000-square-foot space, plus an area for a 4,000-square-foot playground.
Children of America has its own real estate arm, Worldwide Realty Corporation, which arranges the purchase and subsequent development of Children of America properties through 50/50 joint ventures with the landowner or developer. The company typically signs a 10-year lease with 2.5% annual rent bumps.
SEASONAL / TEMPORARY
Phantom Fireworks Seeks Temporary Locations
ICSC Booth: S402 P STREET, South Hall S4
Phantom Fireworks operates 45 retail fireworks showrooms in AL, WI, OH, PA, IN, WY, FL, SC, MO, NH, and NM; and the company is planning to open at least four new showrooms during 2009. Phantom's typical showroom is 4,000 square feet and the company will build on property or renovate an existing building to meet its needs.
Additionally, Phantom seeks temporary locations each year -- during its peak season (leading up to July 4th), it operates more than 1,200 temporary fireworks sales locations throughout the country. For these, Phantom looks for high-traffic locations, either in-line in shopping center or in parking lots.
Spirit Halloween on the Prowl for 700 Seasonal Store Locations
ICSC Booth: S3508 Thirty Fifth Avenue, South Hall S4
Spirit Halloween opened its first store in 1983 and in 1999, started opening seasonal stores. Last year, the company operated 600 locations for the Halloween season and this year its aiming for 700 seasonal stores in operation. The typical Spirit Halloween store is 5,000 to 10,000 square feet and is open from around Labor Day weekend to early November.
Each year, Spirit Halloween seeks sites from January through August, with leases finalized in August. The company will locate stores in power centers, strip centers, stand-alone locations and in major downtown retail center locations as well as in major malls. It seeks good street visibility with a traffic count of at least 25,000 cars per day and a population of at least 50,000 within a three to five-mile radius.
ENTERTAINMENT
Merlin Entertainment Group Seeks Retail Space for its Destination Attractions
ICSC RECon: No booth, but representatives Howard Samuels of Samuels & Co. and Steve Shears, of Merlin will be in attendance
Merlin Entertainment Group has recently emerged as tenant that is a candidate to backfill / redevelop vacant anchor spaces at quality malls. Merlin operates 58 themed attractions in 12 countries. The company opened two new attractions in the U.S. in 2008 -- Sea Life Centre (an aquarium) in Carlsbad, California and LEGOLAND Discovery Centre in Schaumburg, Illinois. Additionally, Merlin acquired Underwater Adventures in the Mall of America in Minnesota.
A company spokesperson told CoStar that while its needs vary by type of entertainment concept; the company is generally looking at 25,000 to 45,000-square-foot spaces in "safe, high-quality environments with a strong leisure aspect," particularly at regional malls or lifestyle centers. As Merlin's concepts are destination attractions, the company not only considers first floor, but also basement, second or third-story spaces, "as long as the entrance is very accessible and highly visible."
Merlin opened three locations in the U.S. in 2008. They include SEA Life Centre (a 28,000-sf aquarium) in Carlsbad, California, a 35,000-square-foot LEGOLAND Discovery Centre in Schaumburg, Illinois, and purchased the 45,000-square-foot Underwater Adventures in the Mall of America in Minnesota, which will be rebranded into a SEA Life Centre.
Merlin has set a goal to open four to five "small parks" each year, focused in the United States. “We are seeking locations that are typically situated near another gathering spot, such as a shopping center or an aquarium, and in major metropolitan markets," said Howard Samuels, one of Merlin's site selection directors with Los Angeles-based Samuels & Company.
This August, Merlin is opening a 45,000-square-foot Madame Tussauds on Hollywood Boulevard next to the historic Chinese theatre -- the project was a $55 million reverse build-to-suit project. Other projects in the pipeline include a 44,000-square-foot LEGOLAND Discovery Centre and Pepsi Globe / Observation wheel at Meadowlands Xanadu, both opening in Spring 2010. Merlin's other concepts include "The Dungeons", "Earth Explorer", and more.
The Xscape Offers Possible Answer to Backfill Vacant Mall Anchor Spaces
ICSC Booth: N556, North Hall
The first Xscape opened in late last year in a 75,000-square-foot vacant anchor space at the waning Lafayette Mall in Indianapolis. At 75,000 square feet, the company bills Xscape as a family entertainment center / indoor theme park. Designed by a person that was also a creator Universal Studios in Orlando, Epcot Center and Six Flags, Xscape includes a gourmet buffet style restaurant, themed dining rooms, a sports bar, a ride and game area featuring amusement style rides, go karts, mini bowling, laser tag, bumper cars, mini golf, and arcade games. The company has not publicly shared its expansion intentions, but company representative Allison Clark will be running a booth at ICSC.
RESTAURANTS
Chipotle Mexican Grill Opening 120 to 130 Restaurants in 2009
ICSC Booth: S3517 Thirty Fifth Avenue, South Hall S4
Chipotle Mexican Grill, Inc. (NYSE:CMG opened 136 restaurants and closed three during 2008. After adding 26 restaurants during the first quarter of this year, the company's restaurant count came to 862 units in 34 states and Canada. Chipotle does not depend on growth through franchisees -- for all of 2009, it plans to open 120 to 130 restaurants.
Chipotle prefers to locate its restaurants near residential developments, office parks, concentrated retail, university campuses, recreation centers, or hospital campuses in urban or suburban areas with strong residential and daytime populations. Chipotle considers urban storefronts, end-cap or outparcel shopping center locations and freestanding buildings. The typical Chipotle is 1,000 to 2,800 square feet, with at least 25 feet of frontage, patio seating, zoning allowing a liquor license, and excellent visibility and access.
Bruegger's Bagels Opening 20 Units in 2009
ICSC Booth: S402 Q STREET, South Hall S4
Quick service bagel restaurant chain, Bruegger's, recently announced its entrance into the New York City market, with plans to open 15 stores in the city through 2015. The company expects the first store will open this year in Manhattan or near Times Square. Bruegger's has also secured its first Chicago area franchisee -- 15 units are planned over the next several years, with the first planned for the Oak Park suburb.
Company-wide, Bruegger's expects that 20 corporate and franchised stores will open this year. According to its franchise website, the Bruegger's seeks to lease stores ranging in size from 1,800 to 2,200 square feet that are located in a variety of locations such as downtowns, strip centers, shopping centers, college towns, airports, and traditional drive-to, quick-service locations. The company prefers population to be greater than 20,000, with a high daytime population, and prefers median household income to be greater than $50,000 within a two mile trade area.
"We prefer to locate in busy areas with a healthy concentration of community-focused, "daily use" shopping such as post offices, dry cleaners, drug stores and banks. Preferred co-tenants include high-end grocery stores, upscale coffee shops, popular apparel, home furnishings and bookstores. It is also beneficial to have a high concentration of white collar offices, hospitals and universities nearby," said Bruegger's.
Burger King Continuing to Open New Restaurants
ICSC Booth: S355 Q STREET, South Hall S4
Burger King Holdings (NYSE: BKC ) reported third quarter results including a 1.6% increase in comparable store sales over the previous year, as well as the addition of 23 new company-operated restaurants in the U.S. and Canada over the last 12 months. The company recently speculated that it would be close to 12,000 restaurants worldwide by the end of this June (as of third quarter, there were 11,810 restaurants worldwide, including 7,522 North American units).
In North America Burger King is spending about 15% more on development than the previous year, continuing to open new restaurants. By the end of 2009, the company expects to have about 12 of its new-concept "Whopper Bar" restaurants open. According to its franchise website, for its typical sites, Burger King prefers 1,900 to 4,000-square-foot buildings, with high visibility and traffic counts, a corner location and a total site size of 20,000 to 40,000 square feet.
Denny's to Open 33 New Restaurants in 2009
ICSC Booth: S365 N STREET, South Hall S4
During 2008, Denny's Corporation (NYSE:DENN) recorded the opening of 34 company-operated restaurants and 31 franchisee-operated restaurants; the most the company has opened since 2002. In 2009, Denny's is leaving growth up to franchisees. It plans to open only three new company-operated restaurants, but expects franchisees to open 30 new restaurants.
The typical Denny's restaurant is a 4,000-square-foot freestanding building located on a pad of at least 30,000 square feet in a trade area with a population of at least 40,000 square feet, traffic count of at least 30,000 cars per day, and median household income of between $32,000 and $50,000. Denny's prefers to have 75 parking spaces (no dead-end spaces), double ingress and egress, and a lot that is on or contiguous to a corner or located on a highway with at least two lanes of traffic in either direction. Denny's prefers to locate close to regional shopping centers, hotels/motels, tourist attractions, or office parks.
Red Robin Gourmet Burgers Opening 13 to 14 Restaurants in 2009
ICSC Booth: S392 Q STREET, South Hall S4
Red Robin Gourmet Burgers consisted of 423 restaurants at the end of 2008, including 294 company-owned and 129 franchisee-operated units; 15 of which are located in Canada. During 2008, 31 company-owned Red Robin restaurants were opened, compared to 26 in 2007. In 2009, Red Robin plans to open 13 to 14 new restaurants.
Red Robin's site criteria includes a population of at least 70,000 people within a three-mile radius or 100,000 people in a five-mile radius, strong daytime and evening population, average household income of $65,000 or greater, high visibility and traffic, and easy and visible ingress / egress. The company's current restaurant prototype is 5,800 square feet -- it prefers to execute ground leases and build its restaurants, but it will consider in-line locations or conversions of existing restaurant structures as well. Red Robin prefers to locate as an outparcel to a regional mall, lifestyle center, power center, or entertainment center.
CKE Restaurants Opening 60 Units in 2010
ICSC Booth: S350 N Street, South Hall S4
CKE Restaurants, owner and franchisor of Hardees, Carl's Jr., Red Burrito and Green Burrito restaurants, ended 2008 with 2,785 U.S. restaurants. The company expects to add two net new U.S. restaurants during 2009; 60 in 2010; 69 in 2011; 79 in 2012; 89 in 2013; and 94 in 2014.
Carl's Jr. and Hardee's restaurants typically range between 2,450 and 3,200 square feet, have a drive-thru, are located on a parcel of 24,000 to 30,000 square feet with a minimum of 155 feet of frontage, have 18 to 32 parking spaces, high visibility, and excellent access at a signalized intersection. CKE requires a minimum traffic count of 20,000 vehicles per day, and prefers to have grocery or power center anchor co-tenants in an area with daytime population of at least 11,000, residential population of at least 25,000 and an average household income of $30,000, all within a two-mile trade area.
In addition to the above expansion tenant briefs, you may also find these past CoStar articles a useful resource during ICSC RECon 2009: