Archive for February, 2008
by David Bodamer February 5th, 2008
This deal caught my eye not just because of its size, but because it involves the Government of Singapore. One thing I’ve been wondering lately is whether the sovereign funds that have been making huge investments in the financial sector might also raise their allocations for real estate in the U.S. The stat I heard today is that foreign investors doubled their share of the U.S. market last year (from 2 percent to 4 percent). An issue, though, is the falling U.S. dollar. It seems like it would objectively be a good time for foreign investment in U.S. assets. But it doesn’t look as good if the dollar’s collapse wipes out any of the potential upside of the investment.
ING Real Estate and GIC Real Estate, the property arm of the Government of Singapore, said on Tuesday they bought the Roma Est Shopping Centre for 400 million euros in Italy’s record single-asset retail property deal.
Each party has bought a 50 percent stake in the property from Italian food-retailing leader Gruppo PAM.
Roma Est Shopping Centre, one of the largest shopping centres in Italy, comprises around 92,700 square metres of gross lettable area. It is about 14 kilometres to the east of the city centre.
Link.
Related Topics: Finance, International, Investment, News, Retail Real Estate |
by David Bodamer February 5th, 2008
Video rental company Movie Gallery today announced plans to close 400 more stores as part of its reorganization to exit bankruptcy.’
Alabama-based Movie Gallery is the nation’s number two video rental chain — behind Dallas-based Blockbuster.
Movie Gallery is closing underperforming and unprofitable stores that operate under the Movie Gallery and Hollywood Video names.
The company in September announced the closure of 520 stores.
Link.
Related Topics: News, Retail |
by David Bodamer February 4th, 2008
Loan volume dropped by 16 percent in the fourth quarter of 2007 in comparison with the same period in 2006, according to the MBA. The drop was largely attributable to the slowdown in the CMBS market.
“Commercial/multifamily mortgage originations in the fourth down from last year’s fourth quarter. The slow-down comes most directly from disruptions in the capital markets although a few remaining large portfolio transactions continued to buoy the numbers,” said Jamie Woodwell, MBA’s Senior Director of Commercial/Multifamily research. “It’s important to note that while commercial/multifamily origination volumes have slowed, the underlying fundamentals of commercial and multifamily properties, loans and bonds generally remain quite strong.”
Decreases in total commercial/multifamily mortgage originations were led by a drop in commercial mortgage-backed security (CMBS) conduit loans. These numbers show the impact of the recent credit crunch and other market disruptions.
The first and the second halves of 2007 proved to be dramatically different lending environments for the commercial/multifamily real estate finance industry.
In the first half of 2007, commercial/multifamily mortgage bankers originated 38 percent more, in dollar volume, than they had been during the first half of 2006. By contrast, originations in the second half of the year ran 11 percent lower than the second half of 2006.
A driving force of this change was changes in the commercial mortgage-backed securities (CMBS) market. Originations for CMBS during the first half of 2007 ran 70 percent ahead of 2006’s first-half level, while second-half volumes ran 30 percent below the 2006 second-half levels. Originations for Fannie Mae and Freddie Mac, on the other hand, ran 18 percent ahead of 2006 levels in the first half of 2007 and 49 percent ahead in the second half. Originations in 2007 for commercial banks and life insurance companies were below 2006 levels in both the first and second halves of the year.
Related Topics: Finance, News, Research |
by David Bodamer February 4th, 2008
This deal was teased last week and has gone through. Back when NRDC originally bought Lord & Taylor, everyone thought it was purely a real estate deal–that NRDC would redevelop some sites, particularly Lord & Taylor’s massive New York flagship, and sell others. But they’ve kept Lord & Taylor going and brought some new life to the brand and now are adding Fortunoff to the mix. And NRDC is saying again that they’re not just in it for the real estate. They’re going to inject cash into the franchise and keep it going.
Fortunoff, a shopping institution on Long Island for decades, said Monday it has filed for bankruptcy protection and agreed to be acquired by the owners of Lord & Taylor, the second change in ownership for the Westbury-based home furnishing and jewelry chain in two years.
Retail industry sources said last week that Fortunoff, struggling for the past few years, was in talks to be acquired.
In an announcement early Monday morning, Fortunoff said it has voluntarily filed for Chapter 11 bankruptcy protection and that it will be acquired by NRDC Equity Partners, the owner of the venerable Lord & Taylor department store.
Richard Baker, chairman of Lord & Taylor and chief executive of NRDC, said in a statement that NRDC plans to invest $100 million into the Fortunoff business “with investments being made in both existing and additional stores.”
Link.
Related Topics: Investment, News, Retail, Retail Real Estate |
by David Bodamer February 4th, 2008
The Chicago Tribune has a comprehensive package of stories up about the five women killed at a Chicago mall.
There are things that are different about this incident than some previous mall shootings. Indications are that this was a robbery gone terribly wrong–and not an incident where someone went to a shopping center looking to commit a mass shooting. Secondly, it was a strip center, so the shooter did not have to walk through a mall common area or encounter any sort of security before entering the store where the shooting happened.
Lane Bryant released a statement about the shooting:
Charming Shoppes, Inc. (Nasdaq: CHRS), today issued a statement following the tragic event at its Tinley Park, Illinois Lane Bryant store.
On Saturday, February 2, 2008, there was a fatal shooting at the Lane Bryant Brookside Marketplace store in Tinley Park, Illinois. The store manager of the Lane Bryant and four customers have lost their lives in this shooting.
The employees of Charming Shoppes, Inc. and Lane Bryant are deeply saddened by the loss of life resulting from this horrific event. We grieve for the innocent victims and our primary concern at this time is for the families and loved ones of those fatally injured.
In mourning of lives lost, the Company’s Lane Bryant greater-Chicago area stores will be closed for business on Sunday, February 3, 2008.
A full investigation of the incident is underway and the Company is fully assisting in the investigation and working with the authorities. The Company is committed to assisting in any way possible, and has offered a reward in the amount of $50,000 to assist the authorities in their investigation. A telephone number will be provided by the local police authorities later today for individuals with any information regarding this incident.
Related Topics: Management & Leasing, News, Retail Real Estate, Security |
by David Bodamer February 1st, 2008
The program will include closing 117 underperforming stores over the 2008-2010 period; downsizing the company’s headquarters staff by approximately 13%; and a “broad-based productivity initiative, including the strategic procurement of non-merchandise goods and services, to improve efficiencies and effectiveness across the organization and store base.”
“Following a very thorough review of our entire business and cost structure, we are taking actions to enhance our overall effectiveness and improve our profitability,” said president and ceo Kay Krill, “and we believe that doing so will increase our operating margin by more than 200 basis points over the next three years.”
For 2008, said Krill, the company will open fewer Ann Taylor and Loft stores and delay the test of its new concept until 2009.
The company plans to close 64 of the 117 targeted stores during fiscal 2008. By division, it is planning to close 25 Ann Taylor stores in fiscal 2008, with an additional 14 stores slated for closure in fiscal 2009-2010; and 39 Loft stores are expected to be closed in fiscal 2008, with 39 additional stores slated for closure in fiscal 2009-2010. The company said it also expects to continue to close other stores over the 2009-2010 period as part of its normal business process.
In 2008, the company plans to open four Ann Taylor stores, 15 Loft stores and 20-25 Ann Taylor Factory stores. In addition, it is proceeding with its rollout of Loft Outlet, planning to open 10 of those stores in fiscal 2008.
Link.
Related Topics: News, Retail, Trends |
by David Bodamer February 1st, 2008
Simon Property Group was the first regional mall REIT to report fourth quarter results. (It’s having its conference call at 11:00 and you can listen in via Webcast here).
The firm’s results are very strong. Funds from operations for the fourth quarter were $1.76 on a per diluted share basis, up 12.7 percent and $5.90 per diluted share for the full year, up 10.1 percent.
And here are some other interesting stats from its portfolio.
| Metric |
As of Dec. 31, 2007 |
As of Dec. 31, 2006 |
Change |
| Mall Occupancy |
93.5% |
93.2% |
+30 basis points |
| Premium Outlets Occupancy |
99.7% |
99.4% |
+30 basis points |
| Community/Lifestyle Centers Occupancy |
94.1% |
93.2% |
+90 basis points |
| Mall Sales per Sq. Ft. |
$491 |
$476 |
+3.2% |
| Premium Outlets Sales |
$504 |
$471 |
+7.0% |
| Mall Rent per Sq. Ft. |
$37.09 |
$35.38 |
+4.8% |
| Premium Outlet Centers |
$25.67 |
$24.23 |
+5.9% |
| Community/Lifestyle Centers |
$12.43 |
$11.82 |
+5.2% |
For 2008, the company is providing guidance of full year FFO of $6.25 to $6.45 per share. It is projecting occupancies will be down slightly to where they are now, but is projecting it will be able to raise rents. Its projected releasing spreads are 15% to 25% on its mall portfolio, 25% to 35% on its Premium Outlet Centers and 5% to 15% on its Community and Lifestyle Centers.
Related Topics: Finance, News, REITs, Retail Real Estate |
by David Bodamer February 1st, 2008
Lord & Taylor, the venerable New York City retailer, is in talks aimed at acquiring Fortunoff, a Long Island institution that has been struggling in the last few years, a source close to the matter said yesterday.
The talks had been ongoing for some time, but broke off about two weeks ago and have since resumed, the source said.
“Lord & Taylor got up and left the table two weeks ago,” the source said. “But they’ve come back to the table, maybe thinking they’re going to get a better price” for Fortunoff, which is considering filing for Chapter 11 bankruptcy protection, according to a report this week in Home Furnishings News.
Link.
Related Topics: News, Retail |
