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Shopping Centers Today -> September 2002
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URBAN RETAIL BULLISH ON POST-RODAMCO FUTURE
By Debra Hazel
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When Rodamco North America was acquired for $5.3 billion by a partnership of The Rouse Co., Simon Property Group and Westfield America this year, many wondered what the future held for its Chicago-based management affiliate, Urban Retail Properties Co. After all, the new owners were all quite capable of managing their own centers.
The fact is, Urban isn’t going anywhere, R. Webber Hudson, Urban’s recently appointed president of retail leasing, told SCT. Though the deal removed Urban’s owned properties, which constituted 35 percent of its management portfolio, the company continues to handle the management and/or leasing of 61 centers (totaling 41 million square feet) around the United States that are owned by other companies.
“We made the decision eight years ago to grow that business,” Hudson said. “We’ve been pursuing it and getting it, to the point where we now are in 23 states and the District of Columbia, crisscrossing the country.”
Urban’s structure has confused many in the industry, and its many name changes over the years haven’t helped. What had been JMB Realty became JMB/Federated Realty Associates, then JMB/Urban, then JMB Retail Properties, and finally, Urban Retail Properties when it became an affiliate of Rodamco.
The Rouse/Simon/Westfield acquisition has actually simplified the structure. Urban is now purely a third-party shopping center management company, owned by a private entity of Rouse/ Simon/Westfield. Clients include J.P. Morgan Investment Management, Lend Lease Real Estate Investments, Metropolitan Life Insurance Co., RREEF and Wells Fargo. Among the centers it manages are the Galleria at Tyler, Riverside, Calif.; the 900 North Michigan Shops, Chicago; and Monmouth Mall, Eatontown, N.J.
Despite the consolidation in shopping center ownership, there is still plenty of opportunity for a third-party manager, Hudson said. Owners with smaller portfolios, for instance, are having problems getting competitive pricing from vendors and retailers.
“So they come to us,” he said. “We can get the price on floor wax. We have a track record with retailers. They realized they needed a bigger voice.”
In the past two years, the firm has added some 13 million square feet of retail to its portfolio, most recently the national leasing contract for the Shops at Lincoln Square, the 330,000-square-foot retail portion of a mixed-use project now being built in Bellevue, Wash., by Lend Lease Real Estate and Westbank Projects Corp. Urban will also lease the 725,000 square feet of retail at Tattersall Park, a 1.6 million-square-foot, mixed-use complex scheduled for a ground-breaking later this year in Birmingham, Ala., by EbscoProperties.
This variety of projects may also be indicative of the future. Hudson acknowledges that mall opportunities are dwindling, but points to other formats for Urban’s continued growth.
“Central business districts, strip centers [and] mixed-use projects are huge opportunities,” Hudson said, adding that even an office building with some retail is attractive.
Hudson has a strong background when it comes to dealing with retailers. He comes from the J.L. Hudson department store company (now a division of Target Corp.). Beginning his career at the family shop while still in college, he was trained in everything from keeping the stockroom to dressing the mannequins (“My dad thought that was a great job,” he said with a laugh). In time, though, seeking a warmer climate and new challenges, he left J.L. Hudson to become a sportswear buyer for R.H. Macy & Co. in California.
One Hudson family member remains attached to retail: a brother who moved over to Lands’ End to explore direct mail. “With [Lands’ End’s] sale to Sears, he’s now back with a department store,” Hudson said.
The change in retail of the mid-1980s brought Hudson a career change. As merchandise-buying became more centralized, the job came to be less fun, he said, and he jumped over to the leasing side, serving as a representative for the Edward Plant Co. in San Francisco in 1986. There he leased Ghirardelli Square, San Francisco, and Stanford Shopping Center, Palo Alto, Calif., among other projects.
“While I was at Macy’s, I met a founder of RREEF, who said, ‘You’re on the wrong side of the deal,’ ” recalled Hudson. “He introduced me to Ed Plant. Department stores had changed; the ability to think like a merchant had declined. Plant said, ‘You want the highest, best use for space.’ He brought up the idea of merchandising [San Francisco’s] Union Square.”
Eventually, though, Hudson and his family got homesick for the Midwest; in 1993 he came to Chicago to join Urban. He was named regional director of leasing in 1995 and assumed his current post in April. Though his own position and Urban itself have changed dramatically in recent months, one thing won’t: Urban’s method of doing business.
“It’s consistency,” Hudson said. “Premium service, good negotiations, integrity, relationships. It isn’t rocket science — we listened to what the customer needed; we listened to what the retailer needed.”
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