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NEW YORK — The ICSC New York Conference and Deal Making at the New York Hilton and Sheraton New York Hotel and Towers here underscored some of the promising recent indicators in the market, such as Black Friday’s record $52.4 billion weekend.
This story first appeared in the December 7, 2011 issue of WWD. Subscribe Today.
But at a gathering of shopping center owners and real estate brokers, there were mixed emotions about the record-breaking Cyber Monday.
“Obviously, online is always competitive,” said William Taubman, chief operating officer of Taubman Centers Inc. “Today, when we listen to retailers speak, it’s becoming an omni-channel world.”
The luxury business continues to be strong, Taubman said, adding, “In general, most people are expanding. There are some new retailers, but not a lot of fresh concepts.”
Taubman said the high sales per square foot at Taubman Centers has enabled the company to pick up market share. Taubman is the only developer with a mall under construction, the $1.5 billion mixed-use City Creek Center in Salt Lake City. And the troubled Mall at Oyster Bay in Syosset, N.Y., is still on the table. “I’m working hard on it,” he said. “I’ve been working hard on it for 17 years.”
Retailers such as Target, Wal-Mart, J.C. Penney, Nordstrom and H&M were spotted at the conference, a sign that they’re kicking some tires.
Westfield’s Jonathan Lauren, senior vice president, said traffic “has been a little down by a couple points, but business is up. “C. Wonder is a refreshing new brand,” he said. “There hasn’t been something like that in years.”
C. Wonder, Christopher Burch’s new retail concept, opened a store at Westfield Garden State Plaza in Paramus, N.J., as well as at Simon Property Group Inc.’s The Westchester in White Plains, N.Y., and is “talking about doing some things out west,” Lauren said. “Billy Reid, Splendid, Vince and Free People are all focused on doing retail stores in malls,” he added.
Westfield Century City in Los Angeles is being remodeled and expanded. “We’re continuing to reinvest in all our centers,” Lauren said.
“There are a lot of retailers we’re concerned about,” Lauren added. “J. Jill, Talbot’s — that’s a sector we’re concerned about.” Another source, who requested anonymity, said, “Bon Ton is a real issue.”
“We’ll see bankruptcies in 2012,” predicted Andy Graiser, co-president of DJM, which markets, restructures and disposes of real estate. “Some will try to avoid Chapter 11. There are still investors that like retail and the cost of capital has gone down. I’m not optimistic about women’s specialty apparel.”
Graiser said he’s seeing more international players using high-profile sites as marketing tools. “They want great New York City sites or Michigan Avenue sites. The goal isn’t for them to open a lot of stores. They want to create a huge Web businesses,” he said.
Jones Lang LaSalle on Monday reported that the sector will be in a holding pattern for at least the next three quarters as U.S. elections approach.
Thor Equities, which owns 597 Fifth Avenue, the former Charles Scribner’s Sons Building, plans to turn it into 75,000 square feet of retail space. Forever 21’s lease at 693 Fifth Avenue, the former Takashimaya Building and another Thor property, ends in the spring and Thor chief executive officer Joseph Sitt said he’s talking to retailers. Thor recently bought 445 Fifth Avenue at 39th Street as well as three contiguous buildings — 516 Fifth Avenue, 518 Fifth Avenue and 520 Fifth Avenue, at 43rd Street. Plans are to redevelop the properties into a 350,000-square-foot space, and there may be air rights for additional square footage. Sitt said the space “would be big enough for Nordstrom,” and said he plans to speak to the retailer.
While Hudson Yards has been cited by retail experts as the logical location for Nordstrom to open a full line store, there was talk at the conference about 16-18 West 57th, the former Hard Rock Cafe, a five-story commercial building recently purchased by Gary Barnett’s Extell Development.
Then there is the World Trade Center. Westfield’s Ron S. Bondi, who is overseeing the retail development of the site, said that with the center’s broad customer base, from age to income, “we want to cover all aspects from a fashion and price standpoint. The retail space will be smaller than initially imagined, 350,000 square feet, but as the other towers are built, it could expand.”