Six of the savviest retail real estate developers in the country shared their thoughts on how they create room in the industry for their companies to grow. They include some of the largest mall and shopping center owners, as well as small and highly
profitable niche developers. What may be most surprising is not their take on development or profitability — but how their opinions diverge.
What is your single biggest opportunity for growth?
John Bucksbaum: Redevelopment activity. Bringing in alternative uses is the greatest opportunity for us. Urban and inner-city opportunities are also huge. Going into tough environments that have been neglected for many years by retailers and recognizing the purchasing power that is there is a real area of growth as we look ahead.
Arthur Coppola: For our company it's significantly enhancing, expanding and densifying our super regional centers. We're dealing with proven commodities and proven markets, not markets where we're relying on external growth. So you already have huge pent-up demand and there's an opportunity to bring in the highly productive tenants and replace some of the lesser productive ones.
Daniel Hurwitz: The most profitable area of growth is clearly in the development business, where we are manufacturing product at margins that are at historic levels. As a result we have increased our development pipeline substantially to maximize the benefit of the current value creation that's available in the marketplace.
Jimmy Ratner: We have a new development program that is the largest in our history. We think there's significant opportunity on a national basis in selected markets, where there is a significantly underserved population. We are also expanding a number of our major centers to take advantage of centers that are already very profitable.
Richard Sokolov: The single avenue where we're going to grow the most is improving our properties so when leases come up for renewal we can re-lease our properties for higher rents than we're getting today. That's not very exciting but that's the core of our business — re-leasing our space at rent spreads between 17 to 25 percent over expiring rents. Our second biggest opportunity in the portfolio is to grow our existing property market share by redeveloping the properties.
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