1 / 42

Brad M. Hutensky ICSC Chairman May 9, 2013

22 nd Annual Connecticut Commercial Real Estate Conference. Brad M. Hutensky ICSC Chairman May 9, 2013. Retail Real Estate Overview. T he International Context Internet’s Impact on Bricks & Mortar The Opportunities in US/CT Retail. Why Is Retail Exploding Globally?.

ricky
Download Presentation

Brad M. Hutensky ICSC Chairman May 9, 2013

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 22nd Annual Connecticut Commercial Real Estate Conference Brad M. Hutensky ICSC Chairman May 9, 2013

  2. Retail Real Estate Overview • The International Context • Internet’s Impacton Bricks & Mortar • The Opportunities in US/CT Retail

  3. Why Is Retail Exploding Globally?

  4. Have Seen Growth First Hand • In Brazil: 44 Malls in next 24 months • In Middle East: Malls being built EVERYWHERE! • In China: 24.5 Million Sq. Ft. in Tianjin

  5. Shopping Center SpaceUnder Construction 24.5 mm sf • Tianjin, China • Shenyang, China • Chengdu, China • Abu Dhabi, UAE • Wuhan, China • Hanoi, Vietnam • Beijing, China • Shanghai China • Kuala Lumpur, Malaysia 10-14 Xi’an, Shenzhen, Chongqing, Nanjing, Guangzhou China Source: CBRE

  6. Retailer: The Growing Middle Class

  7. Year-Over-Year Retail Sales Source: ICSC

  8. GLA Per Capita 24 .76

  9. Mall Development 2007-2012

  10. Every market is different • Customers Wants & Needs • Government’s laws • Industry Norms

  11. World Speaks Language of Retail 1) Product 2) Price 3) Convenience 4) Service 5) Experience

  12. The Threat of E-Commerce

  13. Will E-Commerce make Bricks &Mortar Retail Irrelevant?

  14. Retail is dead, long live retail Brick-and-mortar stores serve customers who end up buying online The internet has made shops obsolete in some towns

  15. The Internet’s Growing Share of Retail Sales 5.2% 1.6 % Source: U.S. Census

  16. Showrooming: visit the store, study the product, shop online for the lowest price

  17. Retailer Bankruptcies & Store Closures

  18. BUT HERE’S THE TRUTH

  19. Retailers Still Expanding Source: RBC Capital Markets

  20. Where We Buy Depends on What We are Buying Buy on the Internet Buy at Stores Men’s suit, hair cuts, home furnishings, groceries, apparel, pharmaceuticals • books, music, shoes computer software, video games

  21. Need for Human Contact Trip to the Mall

  22. Need for Human Contact Trip to the Theater

  23. Advantages of the Store • Immediate gratification • Cash purchasers • Exchange/return • Omni Channel

  24. Retailers with Major B&M Presence Are 12 of the Top 20 Highest Online Sellers Source: The Top 500 List

  25. Conclusion • Customer is changing • Successful retailers are changing too • Internet is driving efficiencies in pricing, inventory and customization

  26. U.S. Retail Real Estate Markets

  27. U.S. Retail Real Estate Market in Brief • 113,355 Shopping Centers = 7.5Billion sq ft of GLA in 2013 • Creates 18 Million Jobs • Modest sales increases • Minimal New Development • Only 1 Mall opens in 2012 • About 46 new open air centers open YTD

  28. Three Observations AboutU.S. Retail R.E. Markets • We don’t need more supply, mostly • Bifurcation of Capital • “A” Properties get lots of attention • Non-stabilized, smaller market, lesser tenants get little attention • Lender Balance Sheets are swollen

  29. Where are the opportunities? • Redevelopment (aging stock; best locations) • Urban/Mixed Use • Serve the new population growth

  30. Repositioning Opportunities

  31. Age of U.S. Shopping Centers More than 15 years old ~80%

  32. e-Commerce Creates Opportunity As store sizes become smaller… • Re-tenanting upside • More locations per market • More new development

  33. Why Governments Embrace Retail Real Estate • $1 million in sales at a • brick-and-mortar store • creates nearly 4 jobs. • Catalyst for other uses (residential & office) • Retail attracts visitors and related businesses and generates tax revenue.

  34. Opportunity from Population Growth

  35. US Total Population Redevelopment (aging stock; best locations) 2010-2050 Growth 1970-2010 Growth ~440 million people ~309 million people ~203 million people

  36. Retail In ConnecticutFollows US Trends • Older stock: Lots of opportunity for redevelopment • Population: we will get less than our share • Urban/Mixed Use: • Blue Back Square: West Hartford, CT • Storrs Center: Mansfield, CT • Front Street: Hartford, CT

  37. International Council of Shopping Centers in Brief

  38. Total ICSC Membership 59,000+ Canada6% Other5% Europe7% U.S.81%

  39. ICSC World Wide • In 2012: 350 meetings; 100K+ attendees • RECon Las Vegas, USA 32K registrants • $57MM annual budget

  40. ICSC Goal: Members’ Success Networking: a business of relationships Education: Learn from the experienced Research: All the information you need

  41. Some Final Thoughts • Retail Real Estate Truly Global: In Different Stages of Maturity (US most mature) • Massive Change =Massive Opportunity • ICSC: Goal to help US & Growing International Members Prosper at Whatever Stage

  42. THANK YOU!

More Related