7.0 EDSR 03-12-2007 - Laserfiche WebLink

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Page 2 of 2 A slowdown among some franchises is impacting community and neighborhood centers as fewer franchises are being built and fewer new concepts are coming to the market. Part of it may be the improving economy-fewer people need to "buy themselves jobs" by opening franchises. Where in the past there may have been three or four sandwich shop franchises competing for a site, today there may be just one. New Stores, Restaurants Scout Area Attracted to the Twin Cities' diverse economy, national retailers are searching for locations. New players that landed include LA Fitness, Trader Joe's and Dave & Buster's. Players looking include Staples and Salad Creations. Sit-Down Restaurants Retool Several sit-down restaurants are looking to compete with "fast casual,"quick-serve restaurants for time-crunched consumers, so they're pushing up their sleeves and retooling. They're changing their menus by adding take-out items, lowering some prices and offering curbside delivery. Examples include Ruby Tuesday, Applebee's, Chili's, and TGI Fridays. Regionals See Activity Regional malls continue to look for ways to reinvent themselves to stay fresh and attract shoppers. One way is adding open-air, lifestyle components, which combine the feel of an urban town square with the convenience of suburban parking lots. Rosedale's $40 million lifestyle component is open and includes an AMC movie theater, Ann Taylor Loft, Sephora and Talbots. Discussion regarding a lifestyle conversion at Southdale remains on hold while the fate of owner Mills Corporation is determined (the company could be sold or restructured). Meanwhile, weaker malls continue to "think outside the box" by adding nontraditional retailers. Northtown landed LA Fitness and Home Depot, and Brookdale is working with a general merchandise retailer. 2006 is the "year of the department store," as sales increased 4.4% from the same period last year, according to the International Council of Shopping Centers (ICSC). Shoppers are looking to department stores for service. Plans are moving forward on Mall of America's expansion, which includes Bass Pro Shop and the luxury Klimpton Hotel. Mall officials say it will be more of an entertainment complex than a shopping mall. Construction could begin in mid-2007 if they get their financing. The Outlook Absorption will be strong in 2007, but less than 3 million square feet. Vacancies will creep up since not all of the space is preleased. The market is returning to more normal levels. The big guns, like Target and Lowe's, will continue to get out in front of the market, but developers will hold off on small-shop space in outer-ring pockets. The vacancies in existing small-shop space may lead to future concessions. Land prices in outer rings will start to drop due to less competition from housing developers. We will see continued redevelopment in inner rings. A second Nordstrom could be announced in 2007. The company is looking at Ridgedale, Southdale and Maple Grove. Southdale will a get a new owner or new capital sources and some much-needed repositioning. Print this Page Close Window http://outlook.uproperties.com/PagePrinter. aspx?InstanceID=340d9a3e-e688-4fc 1-b5 e 1-472... 3/7/2007