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  • Recent store closings only a taste of the future [View news story]
    "Any time you stop building a product, that's usually the best indication that the customer doesn't want it anymore." is simply wrong, and not the conclusion one should draw from hiatus of building new regional malls. One might reasonably have serious doubts about the expertise of someone who would make such a statement. A better explanation is saturation, and is part of any industry's cycle. Specific to enclosed malls, there are still regional mall target sites in major growth areas that have been shelved pending demand. In addition, existing strong well positioned and well run real estate, malls included, will evolve with the changing market conditions and customer demands, not disappear.
    Jan 22, 2014. 07:59 PM | 2 Likes Like |Link to Comment
  • CBL & Associates Is Poised To Profit On J.C. Penney's Potential Demise [View article]

    With respect there are three very significant flaws in your logic that JCP's demise would present CBL with net opportunity.

    1) The pool of traditional anchor tenants for replacement has been steadily shrinking thru consolidation and extinction leaving fewer or no replacement opportunities. In fact, in many cases the remaining anchor tenants are often already represented in these malls, including Sears, also on a similar watch list with JCP. Backfilling with other mass merchants like Target, and to a lessor extent Wal-Mart has had limited success.

    Back filling with other "big box" units is problematic as well as several of these categories are facing their own and electronics superstores are contracting, both with notable recent casualties. Homegoods and Sporting Goods are relatively solid, but consolidation has attrition has reduced these categories to a select few national players required that landlords exclude competitive small stores in their same category, reducing the potential small store pool. The theater industry is largely saturated and requires complete demolition of the existing structure replaced by a very capitol intensive new one.

    2) With the exception of the big box examples above, department stores do not lend themselves to being divided into smaller stores. Agreed, small stores do pay higher rent/sf than department stores, but side mall and end of mall small store space is already challenging to keep leased. You will find that the majority of mall vacancy occurs the further away it is from "center court," so considering creating more none prime small specialty store space as upside is counterintuitive.

    3) These are issues all the mall REIT's are facing, but they are significantly exacerbated in middle markets where the majority of CBL's regional malls are located. Demand for anchors like Nordstroms and often even Macy isn't there much less luxury tenants like Neimans and Saks. Backfilling with other mass merchants like Target, and to a lessor extent Wal-Mart, has had some success, but these players typically already represent significant competition to middle market malls are are already represented.
    Oct 15, 2013. 01:35 PM | 2 Likes Like |Link to Comment
  • CBL & Associates Is Poised To Profit On J.C. Penney's Potential Demise [View article]
    Gyms do not bring more foot traffic than JCP, pound for pound are parking intensive in that their patrons tie up parking for over an hour average, and do no "cross shop" as no one wants to shop after a workout. This is why it is common to have this category as a named exclusive in the vast majority of regional mall anchor and speciatly store leases.
    Oct 15, 2013. 01:35 PM | 1 Like Like |Link to Comment