Glimcher Gets Some Fresh Air
The Glimcher Realty Trust pipeline is filled with open-air centers. "We're seeing a lot of opportunity in the market and even our own portfolio with open-air right now," said Michael P. Glimcher, chairman and CEO, Columbus, Ohio-based Glimcher.
Over the last three years, Glimcher has acquired five properties. Four were open-air. Today, open-air centers account for about 20% of the company's 29 properties.
Recently, Glimcher shared his insights about open-air and enclosed centers with Chain Store Age contributing writer Michael Fickes.
What makes open-air shopping centers work?
Ten years ago, there was a boom in open-air lifestyle centers, but they weren't all successful. Successful centers today have the right location, interesting designs and great content and context.
What do you mean by context?
Context is the environment: the amenities, landscaping, water features, the elements that bring people to the property even when they don't have a mission. If a group comes to your property looking for something to do — and not just something to buy — the property has great context.
What is considered good content today?
For us, it isn't necessarily luxury merchandise — it's brands. We like big global or national brands that only want a couple of locations per market — brands like Apple, lululemon and Nike.
You could probably say that location, design, content and context make enclosed malls work too.
The components are the same. While most of our recent acquisitions have been open-air, we are still interested in enclosed and outlet. But, in the end, we want great content and context in our open-air and enclosed properties.
How difficult is it to find great content and context?
We dig deep looking for it. We want something that is great today and that will be great tomorrow. We might look at a dozen properties before buying. We look for quality, and we'll pay more for it. Recently, we've been trading up aggressively. Average sales per square foot of properties in our portfolio have gone up more than $100 to $435.
Do some tenants prefer open-air?
Yes. Restaurants and service-oriented businesses like open-air. Some apparel retailers prefer open-air as well. We're having success with adding open-air components to enclosed centers. It allows us to give retailers the option.
Is it difficult to find open-air space around a mall?
You can typically find space, but it may mean building a parking deck to free up space in the parking lot or turning some of the enclosed space inside out. There is almost always an opportunity to do something. We like outdoor space in enclosed mall offerings. It enables us to accommodate all kinds of tenants.
How is e-commerce changing tenant mixes?
Today, we look for tenants that provide things to do as well as things to buy. She can't have a salad and a glass of wine with her girlfriends online. She can't go to the movies or try on a purse either. We also like fast-fashion retailers like H&M and Forever 21. There's something about the instant gratification of buying clothing and wearing it immediately. A lot of clothing bought online ends up being returned because it's the wrong size.
Research says online research influences half of all store sales. So we also like multichannel retailers that put brick-and-mortar stores together with online stores.
What does the future look like?
More open-air. Given a choice, people like to be outdoors. As I said, however, it's more about great experiences, great context and great content.