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.
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| ICSC RECon is fast approaching! Use back issues of CoStar's Retail News Roundup as a resource. |
This week in the Retail Roundup, CoStar reports on
expansions or new concepts at Merlin Entertainment Group, Big Lots, Twenty-Three, Steak n Shake, and Fresh & Easy;
new retail development news in NH and CA;
acquisition, merger, loan or sale activity at Developers Diversified and Eddie Bauer;
closings, cutbacks, defaults, or bankruptcies at Waterworks;
personnel or corporate announcements at CBL & Associates and Faris Lee Investments;
sustainability or green building news at Wal-Mart, Whole Foods Market, IKEA, Patagonia; and more.
Did you miss last week's CoStar Advisor national retail story, "More Room for Dealmakers at ICSC RECon 2009", which included a guide to potential purchasers of retail real estate attending the show. 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
Merlin Entertainment Group Seeks Retail Space for its Destination Attractions
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.
Big Lots Opening 45 Stores in 2009; Capitalizing on Real Estate Market
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.
Fresh & Easy Neighborhood Market Opens 120th Store
During the first week of May, Tesco PLC's U.S. brand, Fresh & Easy Neighborhood Market, celebrated the opening of its 120th store, which is located at Durango Dr. and El Capitan Way in Las Vegas. In its blog, Fresh & Easy listed the most recent prior openings as the fifth store in Gilbert, AZ, which opened at Higley & Queen Creek in late March; and the third store in the Bakersfield, CA area, which opened in late February at California Avenue & Stockdale Highway.
On Mar. 27, 2009, a Fresh & Easy company blogger wrote, "We are continuing to open more stores each month; we just haven’t accelerated as quickly as we initially planned given the state of the economy." In a recent Tesco financial report, the company said that Fresh & Easy reported a $200 million loss and $300 million in total sales during the fiscal year. However, comparable store sales were up about 30%. According to its website, Fresh & Easy's store prototype is 13,969 square feet.
Steak n Shake to Test Limited Service Restaurants
Steak n Shake, operator and franchisor of 400 "steakburger" diner-style restaurants across the country, recently set an ultimate goal to add 1,500 franchise units to the U.S. landscape. The company is currently developing a new, limited-service store prototype that costs less to build than its typical sit-down restaurants -- test units will first be located in strip center as either in-line stores, or restaurant end caps w/ drive-thru.
First "Twenty-Three" Store, a Michael Jordan Brand, To Open in Chicago
Michael Jordan's sports apparel and footwear brand, "Twenty-Three" is opening its first store in June 2009 at University Village Marketplace in Chicago. "Twenty Three" will share a 2,800-square-foot space with another new concept, dubbed "AKIN." Chicago-based Sportsland signed the lease and is opening the side-by-side stores. Carrying an address of 1313 and 1315 S. Halsted, the side-by-side stores at the south end of the University of Illinois at Chicago campus.
(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
Macerich Sets Santa Monica Place Opening Date for August 2010
Macerich (NYSE:
MAC) has set an August 6, 2010 opening date for the new Santa Monica Place. The three-level, 550,000-square-foot redevelopment project will open against a backdrop of the grand opening of Bloomingdale's first SoHo concept store (formerly a Macy's) on the same day. The center's other major anchor, Nordstrom is slated for an Aug. 27, 2010 opening.
Previously an enclosed mall, Macerich began the transformation process into Santa Monica Place about a year ago -- the new vision is for a modern, open-air center, seamless with the Third Street Promenade that is rich with new retail options, plus a rooftop dining deck with ocean views.
Other retailers committed to the project include include Arthur, BCBG MAXAZRIA, Coach, Ed Hardy, Ilori, Joe’s Jeans, Love Culture, Kitson, Michael Brandon, R.O.C. Republic of Couture, Shuz and True Religion, as well as Artevo, a technology-driven art gallery. Already announced restaurants include Richard Sandoval's Zengo and La Sandia's Pizza Antica, plus Ozumo Sushi and XINO Restaurant + Lounge.
Chelsea Acquires 170 Acres for Merrimack Outlet Center, by Yaw Frempong
Chelsea Property Group Inc. purchased land off Exit 10 of Frederick Everett Turnpike in the Nashua, NH area, for the development of the Merrimack Premium Outlets, located on Industrial Drive. Monahan-Fortin Properties II LLC sold the parcel for $17 million or $100,000 per acre.
The 170-acre parcel of land is slated for the development of approximately 135 stores to the tune of more than $100 million in construction cost. The outlet mall is planned to be 550,000 square feet (phase I 430,000 square feet, phase two 120,000 square feet), encompassing 135 outlet stores and a 200-room hotel.
The Cushman and Wakefield team of Thomas Farrelly, Denis Dancoes, Sue Ann Johnson and Eric Jackson represented Monahan Fortin Properties II. Mark Silvestri and Michele Rothstein brokered the deal on behalf of Chelsea Property Group.
Please refer to CoStar COMPS #1691274 for more information.
(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
DDR to Close on First Tranche of Shares to Otto Family May 11, Following $125M in Closed Loans
Developers Diversified Realty (NYSE:
DDR) secured new debt financings totaling $125 million. The first is a $40 million, two-year loan with a one-year extension option secured by a shopping center in New Jersey. The second financing is an $85 million, 10-year loan secured by four assets in Puerto Rico. The closing of these loans was key, as it was a condition that had to be satisfied in order for the company to close on the first tranche of 15 million common shares to Germany's Otto Family, which is scheduled to occur on May 11, 2009. DDR said gross proceeds from these transactions would total $177 million and would be used to repay debt and general corporate purposes.
For more on the Otto transaction, click here.
Liquidators Rumored to Seek Acquisition of Eddie Bauer
According to a report by Bloomberg News, outdoor apparel and accessories retailer, Eddie Bauer Holdings, is in talks with Gordon Brothers Group and Hilco Consumer Capital regarding a possible acquisition of the company. Hudson Capital Partners may also be considering a bid. Eddie Bauer currently operates 370 North American stores. The retailer has reported operating losses for three consecutive years and has seen its stock value drop significantly.
Bloomberg sources speculated that any of these buyers would likely close and liquidate at least a portion of Eddie Bauer's stores.
(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
Waterworks Files Bankruptcy
Waterworks, Inc., a retailer of bath and kitchen fixtures, furnishings, and accessories, filed Chapter 11 on May 4, 2009. The company listed $10-50 million in both assets and liabilities in its filing. The company was founded in 1978 and today operates 17 retail stores in AZ, CA, CO, CT, DC, FL, GA, IL, MA, NY and TX; five catalog and commercial sales locations in IL, CA, NY, DC, and CT; and a support center in Danbury, CT. Additionally, Waterworks has five boutique partners with stores in Canada, TN, ID, FL, and AL that were not included in the filing. Waterworks' showrooms vary in size significantly and some of its stores are located on the Country's prime retail high streets.
(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
CBL & Associates Appoints Kathleen Nelson to Board of Directors
Chattanooga, TN-based Mall REIT, CBL & Associates (NYSE:
CBL), appointed Kathleen Nelson to its Board of Directors, replacing Martin Cleary, who retired from CBL's Board earlier this month.
Nelson, currently the president and founder of commercial real estate investment advisory and consulting firm, KMN Associates, has more than 40 years of experience in commercial real estate and financial services. She worked for TIAA-CREF for 36 years, including serving as Managing Director/Group Leader and Chief Administrative Officer for the company's Mortgage and Real Estate Division.
Nelson served as the International Council of Shopping Centers' ("ICSC") 44th Chairman for the 2003-04 term, has been an ICSC Trustee since 1991, and served as the Treasurer and Chairman for the 1996 ICSC Annual Convention. She is also the Chairman of the ICSC Audit Committee and is a member of various other committees. Additionally, Nelson serves on the Board of Advisors to the Rand Institute Center for Terrorism Risk Management Policy, is a member of the Castagna Realty Company Advisory Board and serves on the Board of the Greater Jamaica Development Corporation. She is also a member of the Anglo American Real Property Institute, Urban Land Institute, Real Estate Board of New York, Mortgage Bankers Association, and the New York City Investment Fund - Retail Sector Group.
Faris Lee Investments Opens NYC Office
Irvine, CA-based Faris Lee Investments, a company specializing in retail investment sales brokerage and advisory services, recently opened its second office location -- in New York City to establish a greater presence on the East Coast. Richard Belinghof serves as the office's principal, while Eric Rosa will continue to work out of Faris Lee's Irvine office, serving as managing director of financial institutions for the New York office.
Services provided by the New York office include retail disposition and acquisition strategies, 1031 exchanges, asset positioning and valuation, marketing, debt and equity structuring and high-level execution of finance and investment sales transactions.
Berlinghof has more than 23 years of commercial real estate experience encompassing lending, acquisitions, investment sales and mortgage banking. Prior to Faris Lee, he was a director at Merrill Lynch in New York City, responsible for national originations of fixed and floating rate commercial real estate loans. Over the past nine years, Berlinghof personally structured and closed loans totaling over $3 billion. Prior to Merrill Lynch, he structured loans for Morgan Stanley and prior to that, he was an investment sales broker with Chesterton International Bank. Berlinghof holds a B.S. in Economics and Political Science from Yale and an MBA in Finance from UCLA.
Mr. Rosa brings more than 35 years of banking experience in the commercial real estate sectors of finance/lending, loan servicing, credit administration, problem loan management and asset disposition to Faris Lee. In an executive management capacity, Mr. Rosa has served as Chief Lending Officer, Chief Credit Officer and REO/Special Assets Manager. He held previous positions with Glendale Federal Bank, Chinatrust Bank and First Bank of Beverly Hills. Over his career, Mr. Rosa has been responsible for loan originations in excess of $7 billion. He holds a Bachelor's Degree from UCLA.
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@costar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.
SUSTAINABILITY/ GREEN BUILDING
Wal-Mart Stores Commits to 10 to 20 Solar Systems in California
Wal-Mart Stores, Inc. (NYSE:
WMT) is expanding its solar power program in California to encompass 10 to 20 additional solar panel systems on buildings in the state within the next 18 months. In Glendora, CA, the company partnered with BP Solar to install a roof solar system on a Sam's Club. The company said the system generates annual energy equivalent to powering more than 2,600 homes; avoids producing more than 22,500 metric tons of carbon dioxide emissions per year (the equivalent of taking more than 4,000 cars off the road). Walmart said the solar systems installed would provide 20% to 30$ of each locations total electric energy needs.
In other renewable energy efforts, Wal-Mart said that in Nov. 208, it announced a major purchase of wind energy that will supply up to 15 percent of the retailer’s total energy load in approximately 350 Texas stores and other facilities. In Puerto Rico, the company is planning to outfit up to five stores with solar panels this year, and expects the project to expand to 22 stores in the next five years. Additionally, Wal-Mart de Mexico will eliminate approximately 140 tons of CO2 emissions annually through the completed installation of more than 1000 solar panels on the roof of the Bodega Aurrera Aguascalientes.
Greenopia Names Top Green Retailers
Greenopia, a website providing eco-concious consumers with a directory of retailers offering "green" products or acting environmentally responsibly, recently rated the "Top Green Retailers." The top four includes Whole Foods Market leading grocery stores; Patagonia leading clothing stores; Dell leading electronic merchants; and IKEA leading department stores.
(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.