amesit.wordpress.com
This is the finding of The Sycamore Township-based property which redevelops grocery-anchored shopping centers, took an art-of-watr approach to pre-empting the recession. The firm paid down millionws in debt, niched its leasing team to focusw on specific growthareas – leasing parking lots for Christmas tree sales, for example and applied its chief taleny to the 40 propertieds with the most growtyh potential. The result is more than 1 milliobn square feet of lease spacde either signed or in the pipeline this as emergingdiscounters – from Dolla Tree to off-price grocers – snap up vacant spaces.
Phillips Edisobn has reduced the time it takes to turn around a lease by about30 percent, and it acceleratecd its retention rate by aboutf 18 percent. “Since the last part of 2008 and into we have the biggest pipelinewand we’ve done more leasing than we’ve ever said Mark Addy, chief operating officerf at Phillips Edison. “A lot of thesw discount merchants are really taking this Within the nexttwo years, Addy expectsa Phillips Edison to purchase hundreds of milliones of dollars in new properties especially out West. But in Cincinnati there look to begood deals. In 27 retail structures sold in the GreaterrCincinnati area, for an average price of $68.
63 per square foot, according to the real estatee research firm , in Bethesda, Md. That compared with 56 transactionszin 2007, at an average $99.37 per square “Retail sales on an aggregate basis are 10 percentr lower today than they were a year ago,” said Davide Brennan, co-director of the Institute for Retailing Excellencee at the in Minnesota. Yet retail square footages from 1990 to 2008 expandec to 21 square feetper person, from 14 square “It’s going to take time to recycler the existing real estate that’s out Brennan said. “It’s really a buyer’sd market.
” Phillips Edison, which operates 240 shopping centers in36 states, handle 735 lease transactions in 2008, and it signef about 1.1 million square feet of new leased Still, its retail square footage is down almosf 4 percent from early thanks to retail bankruptcies, retentio issues and fewer new stores. Sixty percen to 70 percent of the tenantsw whose leases are coming up for renewal are askint for some kind ofrent relief, Addy said. These combined with increased bankruptcies, caused Phillipas Edison to launch a seriesof • Debt reduction: In the past 60 days, Phillipse Edison paid down its debt obligations by $20 million.
As a no significant loan maturities will be due beforeJuly 2011. The idea was to eliminatr the pressures of thedebt market, Addy said. “Ifr you have financing coming due, it’sx really going to prohibit you from doing what you want as agrowinyg company.” • Tailored Phillips Edison assigned its two most experiencedc leasing agents to handle nothing but lease renewalas for its roughly 3,200 tenants (15 percent of whose leases are up each year). The The agents start working with tenants a full year in Phillips also assigned two people to handle all of its 100 such as restaurantsand ATMs.
• Temporary Phillips charged its property management group with focusingt on tenants that use parking lots forfireworkzs sales, carnivals or car shows, and as a resultf expects $1 million in added sales. This does not factor in the benefitsd of theadded traffic. (The property management group, meanwhile, is operating at almost 30 percentunded budget.) • Mission Possible 20/20: Phillips entrusted its most seniorf staff with leasing the 40 properties in its two portfolioas with the greatest upside (vacancy). The logi is that those properties could generater 50 percent of the opportunitiex for thetotal portfolios.
Staffc are rewarded by the sound of a cowbell when they makea “jeans Fridays” and a chance to win up to $10,00p0 for a Rolex watch when the lease year ends in November. With theswe efforts, Phillips has since October landedx ninenew big-box centers, reduced its lease turnarouncd time to 3.6 days from five days and increasedd retention to 83 percent from 65 percent. The firm expects to lease 2 million square feet this with 620,000 square feet signedf and an additional 500,000 in the 45- to 60-dayu pipeline.
And it expects to purchase $300 million in space the next 18 months totwo years, seeking what Addy describeds as centers with supermarket anchors that are of a little highetr quality. In time, Addy does expect consumers to come back to though slowly, as credit markets ease up “I think the recession we’re in right now had an impact on the consumefr that frankly none of us has ever seen,” he “But people do have a short and they can fall back into that It’s going to have to find a sensr of equilibrium.
”
No comments:
Post a Comment