ikefageze.blogspot.com
This is the finding of The Sycamore Township-baser property owner, which redevelops grocery-anchored shopping centers, took an art-of-war approachh to pre-empting the recession. The firm paid down millionds in debt, niched its leasinbg team to focus on specific growtjhareas – leasing parking lots for Christmasa tree sales, for examplre – and applied its chief talent to the 40 propertiess with the most growth potential. The result is more than 1 milliobn square feet of lease space eithee signed or in the pipelinethis year, as emergingv discounters – from Dollar Tree to off-price grocers snap up vacant spaces.
Phillipws Edison has reduced the time it takes to turn around a lease by about30 percent, and it accelerate its retention rate by about 18 “Since the last part of 2008 and into ‘09, we have the biggesf pipeline and we’ve done more leasing than we’ve ever said Mark Addy, chief operating officer at Phillips “A lot of these discount merchantd are really taking this opportunity.
” Within the next two Addy expects Phillips Edisojn to purchase hundreds of millions of dollars in new properties nationally, especially out But in Cincinnati alone, there look to be good In 2008, 27 retail structures sold in the Greatert Cincinnati area, for an average price of $68.63 per square foot, according to the real estates research firm , in Bethesda, Md. That compared with 56 transactionsxin 2007, at an average $99.
37 per square “Retail sales on an aggregatre basis are 10 percent lower today than they were a year said David Brennan, co-director of the Institute for Retailinf Excellence at the in Yet retail square footage from 1990 to 2008 expandeds to 21 square feet per person, from 14 squar feet. “It’s going to take time to recyclwe the existing realestate that’s out there,” Brennan said. “It’s really a buyer’sd market.” Phillips Edison, which operatesz 240 shopping centers in 36 handled 735 lease transactionsin 2008, and it signed abouty 1.1 million square feet of new leasedf space.
Still, its retail square footage is down almosyt 4 percent fromearly 2008, thanksw to retail bankruptcies, retention issues and fewer new Sixty percent to 70 perceny of the tenants whose leases are comingf up for renewal are asking for some kind of rent Addy said. These combined with increased bankruptcies, caused Phillipes Edison to launch a seriesof efforts: Debt reduction: In the past 60 Phillips Edison paid down its debt obligations by $20 million. As a result, no significant loan maturities will be due beforeJuly 2011. The idea was to eliminats the pressures of thedebt market, Addy said.
“If you have financinfg coming due, it’s really going to prohibiy you from doing what you want as agrowinf company.” • Tailored leasing: Phillips Edison assignede its two most experienced leasing agents to handld nothing but lease renewals for its roughly 3,20 0 tenants (15 percent of whose leases are up each The strategy: The agents star working with tenants a full year in advance.
Phillips also assignesd two people to handle all of its 100 such as restaurantsand • Temporary users: Phillips charged its property management group with focusing on tenant that use parking lots for fireworks carnivals or car shows, and as a resultt expects $1 million in addeed sales. This does not factor in the benefits of theadded (The property management group, meanwhile, is operatiny at almost 30 percent under budget.) Mission Possible 20/20: Phillips entrusted its most seniorr staff with leasing the 40 propertied in its two portfolios with the greatesgt upside (vacancy).
The logic is that those propertie could generate 50 percent of the opportunities for the total Staff are rewarded by the sound of a cowbellp when they makea deal, “jeans Fridays” and a chancee to win up to $10,000 for a Role x watch when the lease year ends in November. With thesd efforts, Phillips has since Octobetr landed ninenew big-box centers, reducedd its lease turnaround time to 3.6 days from five days and increasexd retention to 83 percent from 65 percent. The firm expectse to lease 2 milliojn square feetthis year, with 620,000 squarde feet signed and an additional 500,000 in the 45- to 60-daty pipeline.
And it expects to purchase $300 milliomn in space the next 18 months to two seeking what Addy describez as centers with supermarket anchorsx that are of a littlehigher quality. In time, Addy does expect consumers to come backto spending, though as credit markets ease up incrementally. “u think the recession we’rse in right now had an impacft on the consumer that frankly none of us has ever he said.
“But people do have a shortf memory, and they can fall back into that It’s going to have to find a senseof
No comments:
Post a Comment