Archive for March, 2009
by David Bodamer March 3rd, 2009
Another day, another story about retail tenants demanding a break. This time it’s at the Plaza Hotel in New York. A few years ago the property underwent a massive redevelopment. The upper floors were converted to high-end residences. (These have had their own problems.) The lower floors, meanwhile, have become a luxury shopping mall called the Plaza Retail Collection. Apparently, the destination isn’t working out so well.
With their business in the red following a brutal holiday season, more than half of the upscale shops at the so-called “Plaza Retail Collection” are demanding lower rents, sources told The Post.
Accusing Plaza owner Elad Properties of penny- pinching – including skimping on sorely-needed marketing – a few of the shops are threatening to leave and may take Elad to court in the process, sources said.
The retail rift is the latest black eye for Elad, an Israeli real-estate firm that shelled out $675 million to buy the city landmark in 2004. While Elad spent another $400 million on renovations, it has since been engulfed in legal tussles with unions, contractors and angry condo buyers.
Related Topics: Management & Leasing, News, Retail, Retail Real Estate |
by David Bodamer March 3rd, 2009
Boston Store, Macy’s and other department store chains around the country are losing their fine jewelry departments because the vendor is pulling out.
The departments have been operated for years by Finlay Enterprises under a lease with the department stores. Finlay, based in New York, also operates stores under the names Bailey Banks & Biddle; Carlyle; and Congress.
Finlay is having financial difficulties and has decided to get out of the department store business entirely.
Clearance sales are under way at the department stores. Chains in Wisconsin that are affected by the Finlay departure are Boston Store, Elder-Beerman, Herberger’s, Younkers and Macy’s.
Mary Kerr, spokeswoman for Bon-Ton Stores Inc., the parent company for Boston Store, said the company hasn’t determined yet whether it will sell fine jewelry in the future.
“We’re looking at different alternatives,” Kerr said.
Link.
Related Topics: News, Retail, Trends |
by David Bodamer March 3rd, 2009
This blog has been so littered with troubling news lately that I’m finding it necessary to really try and celebrate any positive announcement. Today we have news from Target about a mass opening it will undertake on Sunday when 27 new stores debut.
Target Corp. said Tuesday it will open 27 stores across 15 states on Sunday, including the chain’s first two locations in Hawaii.
The discount retailer said the stores will hold grand opening events on Sunday.
Six of the new stores will be SuperTargets, featuring full grocery offerings as well as general merchandise, and employing 200 to 300 workers each, with about 186,000 square feet. Those stores will be in Kissimmee, Fla.; Canton, Ga.; Hillside, Ill.; and three Texas locations in Allen, Lewisville and Pflugerville.
The other 21 stores to open Sunday will offer general merchandise, with each employing 150 to 200 workers in about 128,000 square feet.
(Incidentally, In the monthly magazine, in March we started a feature called “Silver Linings of the Month” where we’ll aggregate announcements like this. I figure it will serve as an informal barometer on the state of the recession. When we start having too many silver linings to choose from, it will be a very good thing!)
Related Topics: News, Retail |
by David Bodamer March 2nd, 2009
This isn’t good news for retail property owners. Tenants at Los Angeles’ Grand Central Market withheld February rent from the property’s landlord in a united bid to get rental reductions and lowered fees. The situation has now been resolved. The landlord relented and agreed to the terms and the tenants did pay up.
As part of the resolution with landlord The Yellin Company, rents will be lowered and advertising fees charged to the tenants will be eliminated.
The fracas, which resulted in many rents being paid two weeks or more late, is yet another sign of the financial hardships stemming from the national recession. Although most visitors to the Downtown Los Angeles landmark were unaware of the situation, several tenants said their future survival is in question.
Adele Yellin, president of the Yellin Company, said that the move will lower costs for the 40 merchants.
“We do understand the pressure that our tenants are under in these times and we’ve taken steps to reduce their rent by eliminating the advertising budget,” Yellin said.
(Spotted at Mish’s Global Economic Trend Analysis)
Related Topics: Management & Leasing, News, Retail Real Estate |
by David Bodamer March 2nd, 2009
A monthly must-read is Calculated Risk’s Economic Summary in Graphs. Here is the version for February.
Related Topics: News, Research |
by David Bodamer March 2nd, 2009
Here’s a trifecta of stories that illustrates some of the major trends dominating retail real estate right now–leasing concessions, cost cutting and delays in new development. Read the rest of this entry »
Related Topics: Development, Management & Leasing, News, REITs, Retail Real Estate, Trends |
Starbucks Tries to Shift Image with Low Cost Items
by David Bodamer March 3rd, 2009
The New York Times reviews the latest Starbucks strategy–$3.95 breakfasts that include coffee and an egg sandwich–as the firm continues to wrestle with its sudden troubles.
Starbucks is trying to do a really tough thing. It created a certain image for itself over the years–earning the nickname Fourbucks for its $4 cups of coffee–and now it’s trying to shift that and be seen as more affordable. That’s a difficult act to pull off. Once you’ve got a niche, it’s hard to recast it. Personally, I find it difficult to consider walking into Starbucks to grab a cheap breakfast. That’s just not what I’ve come to associate Starbucks with.
No Comments Related Topics: Commentary, News, Retail, Trends |