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The Best at Managing Change


Unusual circumstances are forging the best of times for third-party shopping center managers. Rampant store closings, after-effects of the commercial mortgage backed securities crash, and opportunistic buyers are creating opportunities for innovative managers to reinvent properties for their clients.

1. CBRE Group

Globalization, urbanization and CMBS rollover formed a potent combination for top-ranked CBRE Group, which reported 68.8 million sq. ft. of new contracts signed worldwide in 2016.

Approximately 20 million sq. ft. of the total was in the United States, with 17.9 million in the Asia-Pacific region.

“We have some pretty exciting projects in Australia,” said Scott Weaver, senior managing director of asset services in the firm’s Dallas office. CBRE had picked up a sizeable portfolio of power centers (called “homemaker centres” Down Under) on the continent.

In the U.S., the firm further expanded its services to malls and larger center formats with the addition of former GGP executive Mark Hunter early in 2016.

With new properties including traditional malls and a growing practice in urban markets, experiences are an important factor in leasing, said Todd Caruso, senior managing director of CBRE’s retail owner/agency practice. Retailers like the density of high streets. But assembling land mass for urban projects isn’t easy, he warns.

“Owners have done a good job aggregating properties,” Caruso said. “But it’s a different kind of acquisition. You have more hoops to jump through.” And once the package is assembled, special expertise is needed for leasing.

“It’s no surprise that the restaurant business is on fire, from fast-casual to fast food,” Caruso added. “In emerging districts, though, as they mature, the next stage is fashion and apparel, including bridge brands.”

Another avenue of growth is the CMBS servicing market, as debt from 2007 will come due through the end of 2017.

“This isn’t bad product, but it can’t be refinanced,” Weaver said. “So we’re seeing a lot of it coming back. We saw an opportunity to jump into that business while we picked up some international clients.”

Perhaps most exciting is that new construction is creeping back, the two reported. While nowhere near the levels of the early 2000s, construction has picked up over the past couple of years to satisfy demand. Centers in Dallas are at record occupancy levels, Weaver noted.

“We know the mall is not dead,” Weaver said. “If there’s one certainty in retail, it’s change.”

2. JLL

Second-ranked JLL, which signed 60.2 million sq. ft. in new contracts in 2016, continues to succeed by offering services in all shopping center types — and working with industry neophytes as well as established owners. Even more astonishingly, all 609 new projects are in the U.S. — they cover 49 states, Washington, D.C., and Puerto Rico.

“A lot of the clients coming on are new entrepreneurs looking to get into the retail environment,” said Karen Raquet, EVP of Atlanta-based JLL.

And for the first time in years, she observed, owners are turning from containing costs toward building for the future.

“It’s so much fun to have clients investing in these properties,” Raquet said. “It reinvigorates everyone, not just for me but for the whole team.”

Special servicers remain an important part of JLL’s client base, but it’s also working with developers investing projects to rebuild and hold. Turning those projects around requires moving beyond the traditional re-leasing strategy, she said, though the firm also has signed department store Von Maur to the expansion of Minnesota’s Rosedale Center for a 2019 opening.

“If it’s time to reinvent a center, we’re looking for hotels, for event space, health and fitness centers and entertainment centers,” Raquet said. “We ask, ‘How about offices?’”

New projects also are in the mix. JLL is handling development consulting and the retail and office leasing on Halcyon, a mixed-use project underway in Forsyth County, Ga.

The growth should continue, as the company already has signed contracts to manage five malls this year. Raquet reports that the first quarter of 2017 was “the most successful and busiest quarter. It’s just tremendous.”

3. Mid-America Real Estate Group

Look for third-ranked Mid-America Real Estate Group’s touch on ever more projects in Chicago. This year, the Oakbrook Terrace, Ill.-based company took on 7.9 million sq. ft. in new contracts, covering 115 properties in four states (Illinois, Michigan, Wisconsin and Minnesota).

“We’re busy across the board,” said Jean Zoerner, principal and VP.

One contract in particular stands out: During 2016, Mid-America formed a formal partnership to serve as the leasing agent on Sterling Bay’s commercial portfolio, leading the tenanting of most of Sterling Bay’s retail space throughout Chicago, as well as new markets including Miami, Portland and Nashville, among others.

“I expect a busy 2017,” Zoerner said. “We’re busier than ever.”

4. The Woodmont Company

With 7.7 million sq. ft. in new management contracts, Fort Worth, Texas-based The Woodmont Company continues to expand its services — and expand the centers it’s managing, a project or two at a time.

“Our growth is organically driven. We’re not acquiring other management companies, we’re getting new assignments,” said Fred Meno, president and CEO of asset services. The company’s new contracts covered 10 states, with Texas dominating, including Vista Ridge Mall in Lewisville.

Special servicers are a continuing source of new accounts, as foreclosures continue and properties financed by CMBS prior to the recession are seeing loans mature in a higher interest rate, he said.

“They are still underwater and can’t be refinanced, so we’ve seen a lot of receivership work,” Meno added.

Other properties have become obsolete, he said, requiring extensive redevelopment. Woodmont offers its clients extensive analytics to help determine the best uses for projects with renovation potential.

“The CMBS clients can’t add or delete GLA [gross leasable area], but we can put together an analysis of what the highest and best use is for a property,” he said. “Then they can take that analysis and sell the dream.”

5. Vestar Corp.

Patience, hard work and networking have paid off for Vestar Corp.’s third-party division. Best known for acquiring and redeveloping retail centers, the Phoenix-based firm ranked fifth on this year’s list with 3.4 million sq. ft. of new space under management.

“The fruit of the efforts of my VP of client services have come into play as well as new institutional relationships,” said Pat McGinley, president of management services at Vestar. “It just takes a while for the right timing and the right deal.”

Among those deals was the contract to manage Stockbridge Capital Group’s Mira Mesa Marketplace in San Diego, where Vestar oversees some 2 million sq. ft. of space.

“Being an owner/operator as well as a service provider is an asset,” McGinley continued. The firm has strong relationships and

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