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ICSC's McGee: Shift to Entertainment Retailers in Malls (Audio) · Bloomberg Intelligence

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  Speaker 1: President CEO of International Council of Shopping Centers, who's got
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  Speaker 1: a somewhat more upbeep of retail than we've heard on
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  Speaker 1: US commercial property values they rose by an average of
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  Speaker 1: commercial property values have actually doubled. Here to tell us
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  Speaker 1: more about the world of real estate and shopping centers
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  Speaker 1: is Tom McGee. He is the president and the chief
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  Speaker 1: executive of the International Council of Shopping Centers and he
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  Speaker 1: joins us today from Las Vegas. Tom, thanks very much
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  Speaker 1: for being with us. Tell us why you're in Las
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  Speaker 1: Vegas along with almost thirty five thousand nine of your
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  Speaker 1: favorite friends. Well, good day and thanks for thanks for
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  Speaker 1: having me on Tim. I am in Las Vegas is
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  Speaker 1: the site of our annual recon convention, which brings together
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  Speaker 1: it's actually going to be close to thirty seven thousand
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  Speaker 1: people at the at the most recent count that come
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  Speaker 1: together fundamentally to do deals, to talk about leasing opportunities
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  Speaker 1: and shopping centers around the country. And there's a tremendous
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  Speaker 1: amount of energy that's taking place here. There's a lot
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  Speaker 1: of positive feedback about the industry and vibrancy, and I
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  Speaker 1: I think that if you took a mood in the
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  Speaker 1: temperature of the folks that are here, that would be
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  Speaker 1: quite optimistic. I mean, doing a deal, which is fundamentally
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  Speaker 1: why people are here, is somewhat of an optimistic bet
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  Speaker 1: on the future. And so we're very pleased with the
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  Speaker 1: number of people that are here. And this has got
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  Speaker 1: to come to a surprise to anybody who's listening to
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  Speaker 1: Bloomberg Radio our guests talking about retail ice age for
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  Speaker 1: for retailing right now. According to uh Burt Flickinger of
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  Speaker 1: Strategic Resource Group, although your latest figures show that there
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  Speaker 1: was actually an increase in UM the malls segment in
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  Speaker 1: terms of occupancy combined super regional and regional malls in
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  Speaker 1: the first quarter from NYOT four percent now it's up
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  Speaker 1: to ANTY three point seven. But brick and mortar is failing.
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  Speaker 1: That's the story, right, I'm not necessarily failing. But it's
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  Speaker 1: online sales that are the place to be, is what
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  Speaker 1: many are arguing when it comes to retail. Yeah, I know,
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  Speaker 1: I know that there is a lot of certainly um
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  Speaker 1: folks that believe that that's the case, but that actually
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  Speaker 1: isn't the case. I mean, certainly e commerce is here
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  Speaker 1: to stay and it's going to play an important role
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  Speaker 1: in retail, but um brick and mortars here to day
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  Speaker 1: as well. If physical retail is doing quite well. You know,
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  Speaker 1: you mentioned the occupancy rates, and I think what isn't
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  Speaker 1: being told and is the real story now is one
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  Speaker 1: of conversions that it's not really bricks versus clicks. It's
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  Speaker 1: really one of bricks an clicks, and consumers expect a
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  Speaker 1: seamless shopping experience, whether they're online or in a physical
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  Speaker 1: retail location. And still to this day, the vast majority
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  Speaker 1: of sales in this country happen in physical retail. E
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  Speaker 1: commerce sales are less than ten percent of the total
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  Speaker 1: retail sales, and actually their growth as the percentage is moderating.
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  Speaker 1: If you look at where the growth is coming, Yes,
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  Speaker 1: some of it's coming from Amazon, but a lot of
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  Speaker 1: it is coming from retailers that have physical locations that
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  Speaker 1: are building out their e commerce platforms. Speaking to this
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  Speaker 1: synergistic um synergy between e commerce and physical retail, which
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  Speaker 1: we use the term omni channel, What if you could
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  Speaker 1: just speak a little bit about the change that has
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  Speaker 1: taken place at malls at a time. For example, Macy's shuttering,
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  Speaker 1: what thirty six additional stores, seventy eight k martin Sears
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  Speaker 1: locations also going to close, but a lot of them.
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  Speaker 1: Malls have to spend capital in order to revamp. But
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  Speaker 1: they're not necessarily putting in stores, They're putting in things
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  Speaker 1: like restaurants in movie theaters. No, you're absolutely right. I
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  Speaker 1: mean I think that what the mall owners and really
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  Speaker 1: property owners, whether it's some malls or open air centers,
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  Speaker 1: lifestyle centers, etcetera. They're adapting to what the needs of
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  Speaker 1: consumers are. I mean, this is the ultimate consumer facing business,
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  Speaker 1: and right now, consumers have a tremendous appetite for entertainment, restaurants,
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  Speaker 1: lifestyle type of things, services and so um. As some
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  Speaker 1: of the anchor stores may close, it represents new opportunities
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  Speaker 1: to fill that with other offerings that you know, the
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  Speaker 1: consumer likes and in fact, you know, I think if
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  Speaker 1: you talk to the vast majority of landlords, they would
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  Speaker 1: tell you that the you know that that the energy
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  Speaker 1: that's in their properties is quite high, and that adding
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  Speaker 1: those new locations or new service offerings is quite positive.
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  Speaker 1: So this is a day three of RECON, the world's
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  Speaker 1: largest retail real estate convention in Las Vegas. But what
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  Speaker 1: are the singles coming out? What deals have been made?
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  Speaker 1: Are there certain malls and kinds of malls that nobody
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  Speaker 1: wants to invest in, but other ones that are hot?
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  Speaker 1: This is what investors want to know. Now, I don't
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  Speaker 1: I mean, I wouldn't say that there's one segment of
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  Speaker 1: the market versus others that that I would point to
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  Speaker 1: that is particularly doing better or worse. Shire at RECON,
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  Speaker 1: I think that when you have thirty seven thousand people here,
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  Speaker 1: all of those segments are doing are doing well, and
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  Speaker 1: from the standpoint of leasing and deals getting done, I
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  Speaker 1: would say that there's just a lot of energy here
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  Speaker 1: and I actually this is my first RECON as president
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  Speaker 1: CEO of by C s C. And so it is
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  Speaker 1: pretty inspiring when you walk around the facility. We pretty
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  Speaker 1: much take over the vast majority of Las Vegas Convention Center.
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  Speaker 1: And when you walk around and you see the level
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  Speaker 1: of energy and the number of meetings that are being
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  Speaker 1: held virtually every one of the uh the locations that
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  Speaker 1: are set up, it's pretty overwhelming. And it really, if
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  Speaker 1: you think of retail and shopping centers, is somewhat of
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  Speaker 1: a of a signal or a bell whether about the
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  Speaker 1: American economy. I think it does portel somewhat of an
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  Speaker 1: optimistic tone. Right now, Tom, does everybody there want an
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  Speaker 1: Apple store in their more? Well? Apple? I think, what,
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  Speaker 1: you know, it's a it's a good point. Certainly Apple
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  Speaker 1: is a hot retailer. But I think what what Apple
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  Speaker 1: has really demonstrated the importance of experience in the retail environment,
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  Speaker 1: and that is I think the theme that is so
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  Speaker 1: important to be successful in retail today, which is the
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  Speaker 1: consumer expecting experience when they go shopping. It's not just
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  Speaker 1: about you know, consummating a transaction and not just that
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  Speaker 1: commodity element of shopping, but It's really about how do
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  Speaker 1: I feel when I'm in the shopping center? What does
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  Speaker 1: it where does it transport? Mean? To an Apple is
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  Speaker 1: a great example of that thematic element of experience being
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  Speaker 1: so important. By the way, Tom McGee, president CEO of
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  Speaker 1: the International Council's Shopping Centers, joining us from Recall in
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  Speaker 1: Las Vegas. This is Boomberg Radio. Bloombertaking Stock is brought
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