By Orlando Lee Rodriguez
Upbeat reports of profitability, strategic implementation and opportunity with new sustainability regulations greeted attendees at the opening session of International Council of Shopping Centers New York National Conference on Monday.
Both midtown’s Sheraton Hotel and the Hilton New York burst into a beehive of activity as thousands of the nation’s top retail developers, financiers and tenants came together to broker deals ahead of a potentially uncertain 2013.
The energy felt more like the running of the bulls, than a Spanish debt negotiation despite all of the Euro crisis and fiscal cliff news in the headlines. That may be due to the fact that demand for new retail is up, while supply is down.
Blackstone, after a period of bearish hibernation, has been very active in the acquisitions market, snapping up property at well below cost.
In tandem, retailers like Lord and Taylor that control a lot of real estate, have decided to reinvest in properties they already own.
“Our approach right from the beginning has been that we have tremendous real estate assets that have tremendous value,” said Richard Baker, chief executive officer of Lord and Taylor in his address to the group. “But you cannot get to the value unless you are able to run the operating business.”
Baker indicated that Lord and Taylor has seen more than 25 percent sales growth in the past year. Its Canadian parent company, Hudson Bay of which Baker is chairman, has seen business rise by 15% over the past three years.
“Our management team has done a tremendous job in re-merchandising the business,” Baker said. “We can take each one of our stores and we can design the offering to specificallyto suit what market it is.”
In the local market, Lord and Taylor is in the process of renovating its flagship Fifth Avenue store, due to increased traffic from the office and hotel boom surrounding Bryant Park. Grey described this area as the hottest for retail in all of New York City, saying new development would make it unrecognizable in five years.
Baker echoed that sentiment.
“I agree that the Bryant Park area is really on fire,” said Baker. “We have seen tremendous growth in our Fifth Avenue store, which allows us to have to confidence to re-invest.”
The ICSC New York National Conference and Deal Making takes place each December attracting close to 300 participating organizations and thousands of industry professionals from around the country. In addition to having booth space, some organizations can set up entire offices throughout the hotel ballrooms to broker deals on site over the two day conference.
