CoStar's weekly column covering expansions, new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales, loans, shopping center development activity, personnel changes, sustainability, green building, and more in retail real estate.
This week in the Retail Roundup, CoStar reports on
expansions or new concepts at Best Buy Mobile and Meijer;
new retail development news in MI;
acquisition, merger, loan or sale activity at Dressbarn and Tween Brands, Levine Investments and DSB Properties, NRF and RILA;
closings, cutbacks, defaults, or bankruptcy news at General Growth and Madison Marquette;
personnel or corporate announcements at Jones Lang LaSalle and Larimer Associates;
sustainability or green building news at Walgreens; and more.
Did you miss last week's CoStar Advisor national retail story, "CONVENIENCE RULES: 7-Eleven and Others in the Convenience Category Proving Resilient Through Recession,"? If so, follow this link to read the story.
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.
EXPANSIONS / NEW CONCEPTS
Best Buy Mobile Opening 40 Stores This Year
Last week, Brian Dunn, Best Buy's new CEO, said the company plans to open 40 new stand-alone mobile phone stores this year. Further, Best Buy believes that it can eventually quintuple its current share in the U.S. mobile phone market to own 15% total market share. In May, Best Buy completed its $2.1 billion buy of a 50% stake in European partner, Carphone Warehouse, which currently owns an 11% share in the total European mobile phone market share. The typical Best Buy Mobile store is about 1,000 square feet and the company has a second concept, Mobile Life, which is typically 3,000 square feet.
Meijer Trying Out Smaller Store Format in Chicagoland
Typically a retailer that operates supercenter-sized stores, Meijer revealed plans to build a smaller format store, focused primarily on grocery and pharmacy offerings, in the Chicago suburb of Niles. At 102,000 square feet, this store would be about half the size of a traditional Meijer store. The store, being built in a renovated retail space, is scheduled to open the first quarter of 2010. Meijer said the store format is a test -- if it performs, the company will consider opening similar size stores in other markets.
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@costar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.
NEW SUPPLY
Site Preparation Commences at the Shoppes at Gateway Park
Meijer has emerged as the key tenant expected to anchor The Shoppes at Gateway Park, an $80 million, open-air shopping center under development on 8 Mile Boulevard next to the Michigan State Fairgrounds in Detroit. Reportedly, Meijer is under negotiations with the project's developers and its financier, the City of Detroit General Retirement System, to open an 190,000-square-foot store at the 365,000-square-foot shopping center. Meijer's intentions are to acquire the land and build its own store at the property. Additionally, TJX Companies has agreed to open a 40,000-square-foot combo Marshall's / Home Goods store at the center, which is also expected to host about 40 small shop retailers and restaurants. Site preparation commenced last week, but the Shoppes' grand opening isn't expected until 2011.
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@costar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.
ACQUISITION/MERGER/SALE/LOAN ACTIVITY
Dress Barn to Merge With Tween Brands
Women's apparel retailer, Dress Barn (NASDAQ:
DBRN), and pre-teen apparel retailer, Tween Brands (NYSE:
TWB), have reached an agreement, under which a subsidiary of Dress Barn will merge with Tween Brands in an all-stock transaction. Specifically, each share of Tween Brands' common stock will be exchanged for .47 shares of Dress Barn common stock (which was $13.24 per share on June 24, 2009) and when closed, Tween Brands stockholders will own about a 16% share in Dress Barn. The stock price represents a 20% premium over Tween's closing price on the 24th. The stock value of the deal is about $157 million and Dressbarn would also acquire about $80 million of Tween Brand's outstanding debt.
Tween Brands operates the Limited Too and Justice store banners -- both sell fashion apparel for girls, ages 7-14, but Justice's clothes carry a lower price point and the stores are cross-marketed as a place to host birthday parties. The Justice brand was established in 2004 and in August 2008, Tween announced a plan to transition all of its Limited Too stores into the Justice brand, but as of the end of January 31, 2009, the company still had 576 Limited Too stores and 338 Justice stores. During this past year, Tween opened 92 new stores, which followed 140 new store openings the year prior.
Once this merger is closed, Dress Barn's offerings would encompass all ages for women. Currently, the company's banners include the 800-store Dress Barn, which is geared to career women sizes 4-24; and the 700-store Maurice's, which is geared towards teen and college-age girls for sizes up to 24. The company is on track to open 30 new Dress Barn and 55 new Maurice's stores during 2009.
Under terms of the agreement, Tween would operate as a separately managed subsidiary of Dress Barn. The companies expect the merger to close by the end of this year. Combined, Dress Barn and Tween Brands have generated in excess of $2.4 billion in net sales on a trailing 12-month basis, and currently operate 2,465 stores. The companies estimate the "tween" apparel market is a $12 billion industry.
Old Ranch Towne Center Sold for $45.3M
Phoenix, AZ-based Levine Investments sold Old Ranch Towne Center, a power center located in Seal Beach, CA, for $45.3 million to Westlake Village, CA-based DSB Properties.
The center, completed in 2001, was 100% leased at the time of sale to tenants including Ralph's (57,500 sq. ft.), Target (138,000 sq. ft.), Bed Bath & Beyond (27,000 sq. ft.), CVS (15,000 sq. ft.), and more.
The CB Richard Ellis team of Glenn Smigiel, Steve Brabant and Rick Abraham represented the seller in the transaction, while the CBRE team of Samuel Alison and Dan Riley represented the buyer.
For more information, see CoStar COMPS ID# 1726805.
NRF and RILA Unable to Reach Merger Agreement
The National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA)said last week that the merger the two industry organizations announced in early May will not take place. At the time of the original announcement, the NRF said when merged, the two groups would function as one unit that would "further empower the retail industry by serving as a single, unified front at the nation's capital". Unable to come to an agreement the two said in last week's statement, that they would now "devote all resources to continuing the work they are each doing to address the serious issues that America’s consumers and retailers are facing in today’s economic environment.”
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@costar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.
CLOSINGS/CUTBACKS/BANKRUPTCIES/DEFAULTS
Madison Marquette Identified High Risk Retailers
In a June 22 Places Magazine blog, Walter Bialis, Madison Marquette's VP of research, posted a
report that Bialis created to actively track "public and non-public news about U.S. retailers to gauge their relative risk of bankruptcy or other major restructuring that could impact commercial real estate owner and operators." The report ranks retailers based on their likelihood of filing bankruptcy or undergoing a major restructuring -- the levels are "low, medium or high risk."
Aside from retailers that have already filed bankruptcy, retailers that Bialis flagged as high risk include Chico's FAS (Chico's, White House / Black Market, and Soma chains), Cost Plus World Market, Dillard's, Gold's Gym, and Talbots.
On the flip side, retailers Bialis labeled as low risk include Wal-Mart, Walgreens, Urban Outfitters, T.J. Maxx, The Children's Place, Target, Steve Madden Shoes, Staples, Ahold and Safeway supermarkets, Ross Stores, Regal Cinemas, Petco, Payless Shoes, Panera Bread, Nordstrom, Michael's, Macy's, Kroger, Kohl's, JoS. A. Bank, JoAnn's, JC Penney, Hot Topic, Hibbett Sporting Goods, Harris Teeter, H&M, Gymboree, Dress Barn, Dick's Sporting Goods, CVS, Coach, Cinemark and Carmike theatres, California Pizza Kitchen, Burlington Coat Factory, Buckle, Best Buy, Bed Bath & Beyond, BeBe, Apple, and Aeropostale.
Simon Assumes Management of 2 Malls from Bankrupt General Growth
Simon Property Group, Inc. (NYSE:
SPG) will be the new leasing, management, and marketing company for the Galleria Dallas and Novi Town Center in Novi, Michigan, effective August 1. Rick Sokolov, Simon's president and COO said the institutional owner of the properties requested that Simon take on these property management functions.
According to
CoStar Property Professional, UBS Realty Investors is the owner of the 1.3-million-square-foot luxury mall, Galleria Dallas, while Aetna Life Insurance is the owner of the 500,000-square-foot regional lifestyle center, Novi Town Center. According to its bankruptcy restructuring website, General Growth Properties (NYSE:
GGP) currently serves as the leasing / management agent for both centers.
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@costar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.
PERSONNEL ANNOUNCEMENTS
Jones Lang LaSalle's Retail Outsourcing Services Group Hires Three Execs
Jones Lang LaSalle's Retail Outsourcing Services (ROS) Group recently announced the addition of three retail experts to its team in the Northeast. Dennis Maher will be based in Boston, Bill Miller in New York and Michael Stanley in Philadelphia. Like the company's other R.O.S. Group members, Maher, Miller and Stanley will advise retail clients on portfolio strategy, store roll-outs, expansion plans, and other real estate matters, in most cases functioning as retailers' outsourced real estate director(s).
With 20 years of retail and corporate management experience, Maher previously served as a real estate development and asset manager for Starbucks. He holds a bachelor’s degree from Loyola University in New Orleans, is a licensed Massachusetts real estate broker and a member of the International Council of Shopping Centers (ICSC).
Miller also hails from Starbucks -- working for the coffee magnate for nearly nine years, most recently responsible for strategic real estate development and asset management in the New York Metro market. He holds a bachelor’s degree in psychology from the University of Wisconsin.
Stanley was previously an Account Executive for Coldwell Banker Commercial Bennett Williams Realty and has 12 years of retail and real estate field execution experience in 13 states. He holds a bachelor’s degree from the University of Maine and is also a member of ICSC.
Former Catellus Exec Joins Larimer Associates, by Michael Greenhill
Larimer Associates, a Denver-based investment and management company, hired leading retail and restaurant broker Pat McHenry. She was named partner, leasing and acquisitions. McHenry brings more than 25 years of experience in the commercial real estate industry to the firm.
Previously, McHenry was senior vice president with Catellus in charge of retail strategy. She also has extensive retail brokerage experience with Trammell Crow Co. and CB Richard Ellis. Her focus is on representing specialty and urban centers and new and major developments. McHenry provides real estate services to major retailers, investors and developers in Denver and throughout the country.
She is a graduate of Iowa State University with a degree in chemical engineering and also a M.B.A. from Stanford University. McHenry professional affiliations include memberships with the Denver Board of Realtors, the International Council of Shopping Centers, the Denver Commercial Association of Realtors and the National Association of Industrial and Office Parks. She is also a member of the Retail Steering Committee - Downtown Denver Partnership and the Stanford Alumni Association.
McHenry has been recognized for numerous real estate awards, including No. 1 Retail Broker for 2003, 2004 and 2006 and No. 2 Retail Broker for 2005, as recognized by NAIOP, DMCAR and the Denver Business Journal. CoStar Group and the Real Estate Forum have ranked her as Power Broker.
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@costar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.
SUSTAINABILITY/ GREEN BUILDING
Walgreens Opens First LEED-Registered Drugstore
On June 24, Walgreens celebrated the grand opening of the nation's first LEED-registered drugstore. The store opened in Mira Mesa, CA -- part of the San Diego metro area. Elements of the store that Walgreens expects will earn it LEED certification include parking for hybrid vehicles, bike racks, proximity to public transportation, skylights and solar tubes, use of LED lighting, the use of native and adaptive plant species, and Walgreens said 95% of the store's construction waste was recycled.
Walgreens plans to open its next LEED registered store in Chicago this fall, with two more locations to follow by the end of the year. The company’s efforts to reduce its carbon footprint also include the use of solar panel systems on 63 of its locations in California, Connecticut, New Jersey and Oregon.
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@costar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.