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Wanted: U.S. stores ready to branch out to China.
Urban Retail Properties, a Chicago-based developer, wants to bring U.S. retailers to China through a venture with Long Runn Investment Group, a Washington, D.C.-based firm specializing in property development and related activities in China.
The companies formed the Long Runn Urban Development Group in Shanghai, through which Urban Retail will provide Long Runn with leasing, consulting, development, investment and property management services.
The first project is Greenland Galleria, an 88-story complex in Nanjing with 500,000 square feet of retail, as well as an InterContinental Hotel, office space and a Clouds private restaurant club. Construction is to be completed in the fall, and stores are set to start opening in the fourth quarter.
“There is capacity to house an anchor or a junior anchor, from 50,000 to 100,000 square feet — a destination retailer,” Ross Glickman, chief executive officer of Urban Retail, said in an interview.
One possibility is a better- to luxury-priced fashion retailer, Glickman added, though he said it’s too early to discuss potential tenants. He’s also seeking specialty tenants at Ann Taylor price points and higher.
“We are going to court U.S. retailers,” he said. “Every European luxury brand is really represented in China, but only a handful of U.S. specialty retailers are over there.”
Saks Fifth Avenue, however, plans to open a licensed store in Shanghai in 2009, and Bloomingdale’s has scouted the country.
“Nanjing has a very, very rich history,” Glickman added. “It was the imperial capital of six dynasties. Now, it’s a modern economic center and home to seven million people. Greenland Galleria represents a really unique opportunity. There has never been this kind of structure before” in Nanjing. “It goes beyond the typical mall or lifestyle center.”
There are few multipurpose facilities of comparable stature in China, he said. Nanjing is considered the second-largest commercial center in East China, after Shanghai.
Urban Retail is coming into the Greenland Galleria with the project already well under construction, and some retailers are making commitments. Glickman said he was reluctant to name any merchants because the mix is subject to change and requires Urban’s final approval. Urban is on board to accelerate the leasing process and manage the retail component. Glickman said Urban’s objective is to establish Greenland Galleria with a consistent merchandising approach and global point of view.
Urban Retail said it is the first U.S. commercial developer to create a joint venture with a China development specialist. More projects with Long Runn will soon be disclosed. Glickman said he’s “on the cusp” of announcing one in Shanghai involving the partnership and a local development group.
In the U.S., Urban Retail, a private company, has developed about 75 projects, notably 900 North Michigan Avenue, Water Tower Place in Chicago and Copley Place in Boston. The company manages more than 40 million square feet of retail, office and residential space in 21 states and the District of Columbia and provides consulting services around the world.
In Asia, Urban is the retail adviser for Taipei 101, a mixed-use complex in Taipei, Taiwan, housing stores for Louis Vuitton, Bulgari, Cartier, Gucci, Prada and Versace, a fitness center, offices, restaurants, observation decks and communication facilities.
Last year, Urban acquired Oakland Mall in Troy, Mich., expanding the firm’s profile from a full-service leasing and management company to a property owner and builder, as well. The California State Teachers’ Retirement System injected $200 million in equity and RAIT Financial Trust purchased a 25 percent stake in Urban to finance purchases and projects.