EDITOR'S LETTER
Jun 1, 2002 12:00 PM, Ben Johnson, Editor-in-Chief
Having just returned from the ICSC Spring Convention in Las Vegas, several major retailing trends are still top of mind. In particular, though, I couldn't help noticing one overriding theme — the largest public retail real estate companies continue to get larger year after year.
While outwardly their booths may be the same size and in the same locations as in recent shows, think of the combination of names that now draws a good deal of the show's attention — Urban Retail Properties, the largest third-party retail management firm is now owned by three huge REITs — Simon, Westfield and Rouse Co. General Growth, another big REIT, recently acquired JP Realty for $1.1 billion to expand its portfolio's presence in the Western United States.
There is no question that the major mall REITs are now in a position to “own” major markets across the country. In other words, they are acquiring enough critical mass of properties in cities and even states to not only catch the attention of Wall Street, but also potential tenants looking to enter multiple markets in one fell swoop.
Too often, though, we in the media are accused of overlooking the biggest source of retail dealmaking in this country — the private players. These are the owners and managers of shopping centers from coast to coast that most people never hear about except in local markets, mostly because they're quiet and attract almost no publicity because they don't have pr machines to crank out press release after press release. And, they don't have names that we/the public can easily identify and be instantly comfortable with.
One good example of the private side that comes to mind is the Tattersall Park project near Birmingham, Ala. The mixed-use, 78-acre project by local developer EBSCO Properties got a lot of attention at the show, not only because of its scale and location, but also because of the booth's location adjacent to Urban Retail Properties, and thanks to a well-timed management agreement with Urban.
Money was also in much evidence at the show this year. Financiers could be seen in virtually every nook and cranny of the Las Vegas Convention Center, which is actually a good sign that money is looking for a home. Unfortunately, the consensus is that there are precious few retail houses in which it can dwell right now. Overall, new development has slowed to a trickle, and going public with an IPO is still reserved for a select few these days, given the volatility of the stock markets. (For every rule there is at least one exception — this time it's Heritage Property Investment Trust, which held a fairly successful IPO in mid-April. You can read more about it starting on page 30.)
Perhaps the biggest player at the show, though, was Wal-Mart, aka the world's biggest company. Love ‘em or leave ‘em, they still have the capacity and the clout to move markets. Lately the attack seems to be on the grocery segment, into which Wal-Mart has made significant inroads and shows no sign of easing off.
Rest assured, we will continue to report on why these topics matter to you, as well as that fascinating interplay between the goliaths and davids of the world.
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