Archive for January 21st, 2009
by David Bodamer January 21st, 2009
The AIA Billings Index improved slightly from the all-time low it hit last month. It hit 36.4, an increase from 34.7 last month. Scores above 50 indicate growing activity.
Following consecutive months with record low scores, with the Architecture Billings Index (ABI) moved up only very modestly, signifying that the design industry remains mired in a steep downturn. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the December ABI rating was 36.4, up from the 34.7 mark in November (any score above 50 indicates an increase in billings). The inquiries for new projects score was 37.7.
“The inability to get financing for construction projects is a key reason that business conditions continue to be so poor at design firms,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “It will be important to see what the proposed economic stimulus package includes that is geared towards the construction industry, and how quickly developers who have had to put projects on hold can get them moving again.”
Related Topics: Architecture & Design, Development, News, Research |
by David Bodamer January 21st, 2009
The retailer, whose operations include department stores in Antioch, Stockton, Tracy, Santa Rosa and Capitola, said it hopes to complete an auction by March 17 that would lead to a sale of the company. Fresno-based Gottschalks operates primarily in malls located in suburban and rural markets in California, Washington, Oregon, Nevada, Idaho and Alaska.
Absent a buyer, Gottschalks would move toward a liquidation during the spring, company filings with the U.S. Bankruptcy Court in Delaware shows.
Gottschalks listed $197 million in debts and $288 million in assets in its bankruptcy filing on Jan. 14.
“The very weak retail and credit environment” triggered the bankruptcy filing, J. Gregory Ambro, chief operating officer of Gottschalks, stated in an affidavit that accompanied the filing.
Link.
Related Topics: News, Retail |
by David Bodamer January 21st, 2009
Filene’s Basement is closing 11 stores. One thing I find alarming in this is the allegation that Filene’s couldn’t get rent reductions at these stores. There’s little detail here. Was the company asking for too much? What exactly did it need? It seems in this environment that landlords should be working to keep retailers in place, unless they really think the retailer has no future. If that is the case, this is a bad sign for Filene’s Basement.
The chain, famed for its annual “Running of the Brides” wedding gown sale, has been unable to negotiate rent reductions at 11 locations and plans to shutter those stores by the end of February, according to Julie Davis, general counsel of Retail Ventures Inc., the parent company of Filene’s Basement. In addition to the Framingham location, stores to be closed include three in Maryland, two in Illinois, two in Pennsylvania, and one each in New Jersey, New York, and Virginia.
“In this economy, we are approaching landlords to effect rent reductions or other economic solutions to help us support these stores,” Davis said. “We’re still hoping there are some landlord negotiations that might help us keep stores.”
Bankruptcies and Liquidations:
- Jan. 7, Goody’s liquidates, closing 287 stores
- Jan. 8, Against All Odds files for bankruptcy protection, operates 64 stores overall, plans to close West Coast stores
- Jan. 13, Shane Co. files for bankruptcy, operates 23 stores
- Jan. 14, Gottschalks files for bankruptcy, operates 58 stores
- Jan. 16, Circuit City to Liquidate, closing 567 stores
Potential Bankruptcies & Liquidation Impact: 999 stores
Announced Closings
- Jan. 8, New York & Co., 50 stores
- Jan. 8, Macy’s, 11 stores
- Jan. 9, Supervalu, 50 stores
- Jan. 13, Cost Plus, 26 stores
- Jan. 21, Filene’s Basement to Close 11 Stores, 11 stores
Total Closings: 148 stores
Potential Impact of All Announcements to Date: 1,147 stores
Related Topics: News |
by David Bodamer January 21st, 2009
The move left 30,000 employees of the Woodland Hills, California-based company without work, and creditors — including landlords — lining up to get whatever they can after the company sells its inventory.
“Now those landlords are in line like the rest of their creditors — and probably in the back of the line to get paid,” said Suzanne Mulvee, Property & Portfolio Research real estate strategist.
The loss of the large tenant, whose stores typically run from 35,000 to 40,000 square feet, is likely to be felt by some publicly traded shopping center owners, such as Developers Diversified Realty Corp DDR.N, where Circuit City accounted for 1.7 percent of its annual base rent revenue, and Kimco Realty Corp KIM.N, where the chain accounted for 1.5 percent of its annual base revenue, according to Green Street Advisors analyst Nick Vetter.
Other landlords include Inland Western Real Estate Retail Trust, Simon Property Group Inc SPG.N, Vornado Realty Trust VNO.N, Weingarten Realty Investors WRI.N, First Capital Realty Inc (FCR.TO), Kite Realty Group Trust KRG.N and Arcadia Resources Inc (KAD.A), according to financial data firm SNL Financial.
Yet the pain will be felt throughout the retail real estate market, several real estate experts said.
“A company like Circuit City is the poster child for what’s going on,” Mulvee said. “There’s a bigger disease at work here.”
Link.
Related Topics: News, Retail, Retail Real Estate |
Furniture Mall Loses $63M in Value
by David Bodamer January 21st, 2009
Man how times have changed. Retail Traffic reported on the construction of the South Coast Home Furnishings Centre in August 2005. The project was part of a broader trend of developers creating malls heavy on furniture retailers that were attempting to make the most of the housing boom–then in full swing.
Needless to say, things have deteriorated since then. The original developers sold the mall in August 2007 for $98 million. It’s new owners, however, didn’t make out very well.
(Spotted at Calculated Risk)
2 Comments Related Topics: Commentary, Investment, News, Retail Real Estate |