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Real Estate Watch: Done Deals and In Development: Redundancy, Chocolate and Gusto

Redundancy is proving to be a good thing, at least for mall owners.

NEW YORK — Redundancy is proving to be a good thing, at least for mall owners. Simon Property Group this week announced it would buy seven Federated Department Stores banners and kill the leases at two additional locations, which include four Macy’s, a Filene’s and two L.S. Ayres. The retailer that is replacing most of the duplicates is the infinitely more profitable Nordstrom’s, which will be added to Burlington Mall, South Shore Plaza, Northshore Mall, and Ross Park Mall.

As it aggressively sheds itself of its dead weight, which analysts say could bring in up to $1.2 billion, Federated is being a bit more tender in announcing changes to the Marshall Fields flagship in Chicago, where the idea of converting the venerated department store to a new Macy’s on State Street has been met with boos and hisses from Chicagoans with fond memories of the Walnut Room and holiday window displays. In order to sweeten the store’s conversion to Macy’s in September, Federated chief executive officer Terry Lundgren said he’d work with Chicago mayor Richard Daley to try to bring Frango Mints back to Chicago.

While Lundgren looks to little chocolate squares to keep his shoppers happy, Urban Retail Properties chairman and ceo Ross Glickman is going whole hog on the shopping-entertainment front. The developer has plans to develop at least six mixed-use projects in the U.S., South Korea and China in partnership with MGM Studios, with, for example, a Pink Panther-themed theater or Rocky sports bar next to The Gap and Ann Taylor. Perhaps the entertainment-shopping niche left vacant by The Mills Corp. has a new developer at the helm?

Speaking of new developers — Indianapolis-based Duke Realty Corp., a major player in the office and industrial real estate world, is entering the retail development world with gusto, announcing plans to develop $350 million in lifestyle centers in a joint venture with Jeffrey R. Anderson Real Estate Inc. The partnership intends to build four centers, with the first, the 330,000-square-foot Shoppes at Montage in Scranton, Penn., slated to open in March 2007 and the second project, the 400,000-square-foot Shops at Pembroke Gardens in Pembroke Pines, Fla., scheduled to break ground in August.


For a detailed look at the headlines discussed above, see the following archived articles:

April 27, 2006

Macy’s Announces Plans For Chicago’s Marshall Field’s
Federated Department Stores promised Thursday to uphold the traditions and character of Marshall Field’s.

Monday, April 17, 2006
Mills’ Vision in the Meadowlands
Despite the woes of its developer, Mills Corp., construction of Meadowlands Xanadu, plows on.