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Shopping Centers Today -> June 2005
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Chicago
OKs Mills’ 108 North State Street project
The Mills Corp. got the long-awaited approval it sought from the city of Chicago
to turn 108 North State Street into an urban retail and lifestyle center in the
city’s downtown. The former office tower has stood vacant for 15 years. Mills
says it plans to convert the building into a multilevel, mixed-use complex containing
400,000 square feet of retail, entertainment and restaurants. There will also
be 200,000 to 450,000 square feet of offices, a 200-to-300-room hotel, about 300
residential units and a broadcast center. In addition, the complex will house
a transit station providing service between the O’Hare and Midway airports.
Mills says it expects to complete the CBS 2 Chicago broadcast center in late 2007
and the retail, dining and entertainment components sometime in 2008. Among the
retail tenants are Banana Republic; Boggi Milano, an Italian apparel retailer;
Rosa Mexicano, a Mexican restaurant chain; and Sisley, a men’s and women’s
apparel retailer.
Feldman finds ‘solid buy’ in Cincinnati
Feldman Mall Properties’ purchase of Northgate Mall, in Cincinnati, is a “solid buy” in a market that has seen lots of retail real estate activity of late, sources say. Feldman is paying $110 million for the 33-year-old, 1.1 million-square-foot mall in the city’s northwest suburbs. Owensboro, Ky.-based David Hocker & Associates is the seller. The Northgate area “doesn’t have as juicy demographics as other parts of the city,” said James C. Bieri, president of Bieri & Associates, a Detroit real estate consulting firm, but it is “ripe for development.” The deal, which bears a cap rate of 7.6 percent, is among the latest in a series of transactions and developments in metro Cincinnati in recent years. In February Thor Equities acquired the 45-year-old Tri-County Mall, with plans to spend between $15 million and $25 million on renovation. The Mills Corp. has turned Forest Fair Mall into Cincinnati Mills in a $100 million makeover, and General Growth Properties added a streetscape to its Kenwood Towne Centre.Calloway doubles size with $960 million purchase
Calloway REIT says it will become Canada’s largest owner of open-air centers after its $960 million acquisition of 36 properties closes this month. The company is buying stakes in centers and development sites from Toronto-based private developer First Professional Shopping Centres and Wal-Mart Canada. First Professional will continue to manage most of the properties. The acquisitions will double the Calloway portfolio to 85 shopping centers valued at a total $2.4 billion, of which 70 are anchored by Wal-Mart. Toronto-based RioCan, which owns a more mall-based portfolio, remains Canada’s largest retail REIT.Experts cautiously praise Best Buy China plan
Best Buy’s plan to break into China is a good move, analysts say, though the electronics chain could run into fierce competition. Best Buy says it is considering the opening of test stores within the next year and a half. But SG Cowen & Co. retail analyst Joseph Feldman told SCT that the China plan “raises questions about whether another electronics retailer is needed in Asia. It’s a crowded market.” Feldman lauds Best Buy’s “solid” management team and its “slow” approach to Asia. Lorie Penniman, president of real estate consulting firm REMM-China, says China’s growing middle class and rising disposable-income levels means a big market for Best Buy. “Young people want the branded products, mostly American,” she said. “And Best Buy, as an American company, will do quite well.”Shopping Centers Today
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