David LaRue

David LaRue, Forest City Enterprises’ president and CEO, has been tapped as the new chairman of the International Council of Shopping Centers for the 2013-2014 term.

He succeeds Brad Hutensky, president & principal of Hutensky Capital Partners in Hartford, Conn., who remains on the ICSC Executive Committee.

LaRue was elected by the organization’s Board of Trustees at RECon, the ICSC’s annual meeting in Las Vegas.

“Being named chairman of ICSC is a significant honor and I will strive to build on the work of prior chairmen to advance the organization’s mission and service to members,” LaRue said in an ICSC release. “I look forward to the opportunity to get closer to our members in the U.S. and abroad over the next year.”

Michael P. Kercheval, ICSC president & CEO, pointed to Forest City’s diverse real estate holdings as one of the reasons why LaRue’s election as chairman of the ICSC was a good choice.

“Our members are building shopping centers, mixed-use and other kinds of projects; they are everywhere and working in every kind of real estate,” Kercheval said in a news release.

“David heads a company that owns property across multiple categories in its core markets, and therefore his experience meshes with that of just about every one of ICSC’s members in one way or another,” Kercheval added. “Forest City is also a leader in sustainable and innovative development, all of which makes David’s nomination an exciting one as we, as an industry, embrace the future.”

Forest City, headquartered in Cleveland, owns about $10.7 billion in retail, office and residential properties around the United States, including 46 retail properties, 47 office properties and 122 residential communities. The company’s retail holdings include regional lifestyle, neighborhood and enclosed centers as well as urban, big-box and, entertainment properties. The firm’s Brooklyn, N.Y.,-based subsidiary, Forest City Ratner Cos., recently opened the Barclays Center, sports and entertainment arena that is part of the $4.9 billion, 22-acre, mixed-use Atlantic Yards development in downtown Brooklyn.

LaRue succeeded Charles A. Ratner as head of Forest City in June 2011. He has been with the company since 1986 and held numerous roles including Chief Operating Officer and Executive Vice President from March 2010 until June 2011.

An active member of ICSC for almost 20 years and a trustee since 2008, LaRue has served on the ICSC Global Task Force, which undertook a review of the organization’s programs and services. He has also been an advocate of ICSC’s Global Public Policy Efforts in Washington, D.C.

One of the priorities LaRue and ICSC will focus on during this coming year will be to push for federal legislation requiring online retailers to collect sales taxes in those states in which brick-and-mortar retailers are required to. Known as the Marketplace Fairness Act, the bill passed in the Senate earlier this month but has yet to be considered by the House of Representatives.

“Traditional physical stores cannot continue to be discriminated against by this tax policy,” LaRue said in the ICSC release. “Reform in this area would also benefit cash-strapped state and local public coffers.”

In addition to naming LaRue ICSC chairman, six members were named to the Board of Trustees. They are: William B. Horner, CFO, Fitness International; James J. Lampassi, vice president, real estate and construction, Petco; Carlos Medeiros, CEO, BR Malls; Mark L. Myers, executive vice president, head of commercial real estate, Wells Fargo Bank; Brian Smith, president and COO, Regency Centers; and Arturo Sneider, SCLS, partner, Primestor Development.

Left to right: Bill Hughes, Joe Dykstra, Joseph McKeska, Tom Roberts and Hessam Nadji assess the state of retail real estate during Marcus & Millichap’s annual panel discussion at RECon.

The panel’s moderator, Marcus & Millichap managing director Hessam Nadji, set the stage for the Monday evening discussion by pointing to retail’s broad recovery. “The consumer that was supposed to go hide in the corner—and never be back—is back,” Nadji told an audience of several hundred real estate professionals Monday at the Renaissance Hotel in Las Vegas.

Nadji noted that retail sales volume is 12 percent higher than it was at the economy’s pre-recession peak in 2007. Centers of technology, energy and trade are producing growth that is fueling job growth and retail. In another positive sign, forward-thinking retailers are meeting the challenge by embracing technology to complement their brick-and-mortar stores, he said.

Asked to speculate about vacancy trends during the next 12 months, Cole Real Estate Investments’ executive vice president Tom Roberts suggested a modest change. “The pace of vacancy reduction will pick up a bit,” he said. He expects both cap rates and interest rates to remain relatively stable during that period, a view shared by Joseph McKeska, senior vice president of real estate for Supervalu. Bill Hughes, senior vice president of Marcus & Millichap Capital Corp., responded that interest rates will likely rise during the next 12 months. Fellow panelist Joe Dykstra, executive vice president and head of acquisitions and dispositions for Westwood Financial Corp., predicted that interest rates will edge downward.

Panelists likewise commented on evolving retail real estate strategies. Prospects for financing retail are still decidedly mixed. Bill Hughes, senior vice president of Marcus & Millichap Capital Corp. cited the rising profile of securitization in retail finance. This year, CMBS accounts for 64 percent of retail financing by dollar value, a significant increase from 45 percent last year, he noted.

Citing loan terms reminiscent of the last boom, such as multiple years of interest-only payments, Hughes said, “There’s a little bit of froth out there.”  But he added that lenders are largely sticking to the more conservative credit standards that took hold after the recession. Hughes agreed with the widespread perception that many capital sources to keep a tight handle on the retail finance spigot. “Commercial banks and private funds are looking for deals to put dollars into, but it’s got to be a great story,” he explained.

Joseph McKeska, senior vice president of real estate for the grocery wholesaler and retailer Supervalu, urged the audience to view credit standards more broadly. “There’s a lot of emphasis on financial underwriting, but I think it’s also important to understand the grocer’s business plan,” he said. “You are becoming a business partner to that grocer.” In March, Supervalu completed the $3.3 billion sale of five of its grocery brands to a consortium led by Cerberus Capital Management L.P. Part of Supervalu’s restructuring strategy, the sale included $3.2 billion in assumed debt and $100 million in cash.

Other panelists also tempered their generally upbeat outlook with a strong note of caution. “The big value-add plays are really behind us,” Dykstra said. Capital sources, as well as investors, must now carefully weigh their risk tolerance. As a rule, Dykstra added, “We will not buy properties at less than a 6 cap rate. We will buy very, very few properties at less than a 7-cap.”

Surging demand, new retail concepts and stirrings of new development were the talk of the Las Vegas Convention Center on Monday during the first day of RECon, the International Council of Shopping Centers’ annual spring convention. It is impossible to tell how many deals will emerge from the event, but as thousands of real estate professionals roamed the vast halls of the 3.5 million-square-foot facility, participants reported a sense of renewed optimism about the market.

“Going into the show, we have more meetings this year than last year,” said John Bacon, vice president of marketing with Cole Real Estate Investments. As of Monday morning, the firm’s acquisition team had scheduled about 240 meetings and the leasing team had about 110 meetings on the calendar. “Our leasing people were getting calls as late as Friday night” from attendees hoping to schedule meetings at the last minute, Bacon added.

Conversations with a variety of attendees revealed optimism fueled by stepped-up interest in investment sales, leasing and development. “The net-lease industry as a whole is hot,” said Stan Johnson Co. managing director Harold Briggs Monday morning at the firm’s booth in the convention center’s south hall. The company’s net-lease retail transaction volume posted a 50 percent year-over-year increase during the first quarter, outperforming the company’s office and industrial sales growth by a considerable margin. One noteworthy net-lease retail trend is the participation of institutional investors, particularly in the $50 million to $100 million range, Briggs reported. “You’ll see five or six institutional buyers compete for portfolios of 15 to 20 assets,” he said.

Owners exhibiting at the show confirmed on Monday that renewed tenant interest is pushing them to adjust their tactics. Scott Prigge, senior vice president of property operations for Regency Centers Corp., said that pet supply stores, fitness centers and fast-casual restaurants are leading the way. Quick-Service restaurants, said Prigge, “can’t get enough space.”

Underscoring his point, a variety of fast-casual restaurant brands like Subway, Smashburger and Jersey Mike’s are using RECon as a bully pulpit to bring attention to their expansion programs and identify suitable space for new locations. Demand for space in desirable locations has improved to the point that Regency aims to backfill a vacant space with the best possible tenant. This year the company is also rolling out a company-wide campaign to review best practice in customer service.

Other restaurant niches besides are commanding the attention of RECon attendees. Chef-driven restaurants are catching on, especially as part of redevelopment in core urban areas that appeal to members of Generation X and Generation Y, according to James McCandless, director of retail for Streetsense, a diversified Bethesda, Md.-based consulting, design and development firm that is a member of the X Team network of service providers and consultants. Another X Team member, Legend Retail Partners, recently rolled out its new Urban Legend affiliate in an effort to tap into the growing chef-driven restaurant market, reported Legend partner David Larson.

Real estate investment is increasingly becoming a global business, with widening competition as more players place money around the globe. Depending on investment goals, players may be drawn to the recovering U.S. markets or the lagging European markets. And while U.S. investors seek opportunities in Asia, local investors there are already well entrenched.

Foreign investors are so eager to pursue opportunities in U.S. real estate that they are racing to join the biggest deals, making it sometimes difficult to differentiate between clients and competitors. That was a conclusion among speakers on the Urban Land Institute Spring Meeting keynote panel, “Capital Markets: Who Has the Capital and Who is Getting It,” which was moderated by Christopher Ludeman, CBRE Group Inc. president of brokerage services and the capital markets. Capital is flowing in from around the globe, ranging from the top-ranking Koreans—now permitted to invest abroad and only held back in the U.S. by FIRPTA limitations—to those from the Middle East and Canada, noted LaSalle Investment Management global head of the capital markets Jon Zehner. And he is keeping an eye on China and Australia as capital sources.

The Japanese, too, are eager to invest outside their slow-growing borders, noted J. Michael Stedman, senior executive vice president of Union Bank, whose employer is owned by Bank of Tokyo/Mitsubishi.

Meanwhile, some big U.S. investors see more opportunity overseas than in their own backyards. Zehner observed that the spread between assets in primary and secondary markets is now 75 to 100 basis points in the U.S. and Canada but 250 to 350 basis points in Europe. In fact, his company is representing a major Asian financing source venturing with a regional European fund to invest in U.K.-located residential property. The U.K. economic cycle is six to 12 months behind the U.S.’s, according to Charles Fedalen Jr., executive vice president & group head of the Wells Fargo CRE Institutional and Metro Markets Group and the Wells Fargo Real Estate Banking Group.

Elsewhere, John Miller, senior managing director for Tishman Speyer, pointed to a fund his company recently put together using Chinese currency to invest in that country. He noted a lot of pent-up demand there.

Wherefore Art U.S. Returns?

Speakers on “The Next Best Bet: Making the Case in a Capital Constrained Market” all expressed interest in European investment. But they also see opportunity in various segments of the U.S. market, although with the U.S. recovery at something of a midway point, identifying risk-adjusted returns can be challenging, they said.

The multi-family sector continues to attract attention, and PIMCO vice president Chris Flick is no exception. He said he still sees room for growth even though the best deals were done two years ago. Damian Manolis, managing director at Prudential Real Estate Investors, advised seeking out micro areas that work, even in more concentrated cities like Seattle and Washington, D.C.

Starwood Capital Group senior vice president Mark Deason, however, sees more opportunity in recovering sectors such as the office market, where he said you can still achieve cash-on-cash returns in the double digits (although largely only as much as 10 percent). Pricing is far ahead of fundamentals in the primary markets but more closely aligned in secondary markets, he noted, although he confessed to remaining focused on the primary cities. And Manolis pointed to the recovering job market and lack of development as contributing to a more solid office sector, even while companies are pursuing smaller space-per-person ratios and hoteling to minimize office size. Flick was less optimistic about the sector but allowed that opportunity could increase as conditions improve.

The panel as a whole was less optimistic about retail and industrial property, although Flick suggested a “barbell” model to retail opportunities, with high- and low-end properties offering the best bets. Grocery-anchored centers, he said, are too popular to offer good deals. That makes it necessary to focus on in-line retailers for growth—and that, the panel agreed, requires strong relationships with national retailers, the better to identify expansion plans. As for industrial, only development offers returns, Flick affirmed.

It is also challenging to find good hotel deals, especially in the limited-service segment, Deason said, although his company has been an active hotel buyer. The panel agreed hotels may have hit the bottom of the cycle and are about to turn upward again.

A series of audience polls turned up continued favor for the multi-family, industrial and retail sectors, with office and hotel eliciting a more negative response.

By Suzann D. Silverman, Editorial Director

While the Baby Boomers and Gen Y sit at opposite poles, that doesn’t make it necessary to choose between them as targets for housing or retail. In fact, according to analysis at last week’s Urban Land Institute Spring Meeting, the two groups—those in the process of entering the ranks of seniors and their children—complement each other.

That’s good news, considering they represent the two biggest generational groups in America—and when it comes to housing, the two biggest buyer groups, according to Alan Mark, CEO of The Mark Co. During a panel comparing the two generations, he quoted the Baby Boomers as comprising 47 percent of buyers, with Gen Y at 35 percent, Gen X at 14 percent and the 64-and-older group at 4 percent.

Comparing the two groups is complicated by the fact that the beginning and end of the Baby Boomer generation are more easily identified and their composition is more clearcut. A larger group than their children, they are mostly native born and mostly white, for instance, while Gen Y includes a significant immigrant population, from a variety of countries, making them less unified, noted Robert Lang, director of Brookings Mountain West at the University of Nevada at Las Vegas. That said, Gen Y is a more tolerant generation, not fearing change and, having never been through the urban exodus of the 1970s, more drawn to cities than their parents, who prefer privacy and space.

“What’s different is the pace of change,” added Jamie Gutfreund, chief strategy officer for The Intelligence Group, who noted that the bar continues to rise. She emphasized the need to look ahead to who this group will be as they continue to age. Already, she noted, quoting her Cassandra Report, 82 percent would rather live in a city than a small town, and they are highly entrepreneurial (49 percent want to bypass traditional companies in favor of startups). And they rely on the opinions of family and friends.

Many say they want to live with their parents, yet Mark noted that a lot of them are second-home buyers. Everything about them is different, observed Jeff Kreshek, vice president of West Coast leasing for Federal Realty. “They want to be challenged … they want the experience, but in a very different way.” And they want experience shopping even when they don’t want to interact with people, he observed. In the retail sector, properties that offer a “sense of place” will have a better chance of succeeding, he said, pointing as an example to his company’s Santana Row in San Jose, Calif.

Despite the differences between the two generation, mixing the generations is important, according to Mark, who said the younger group doesn’t want to live only with other members of Gen Y. And he sees room for combination. For instance, both groups like high-rises, although for different reasons. Baby Boomers are ready to give up caring for a house and property, while Gen Y has no time or interest in such responsibility, he explained. And when they move into multi-family housing, they are drawn to different types of units: Gen Y to smaller, more affordable units and the Baby Boomers to larger units. Mark cautioned that those larger units should be placed at the top of the building, where the views are better.

Specific preferences don’t stop there: Baby Boomers like outdoor space (even if it’s not private), a single level (don’t build their space on multiple levels), larger common rooms for entertaining (more important than large bedrooms) and two rather than three bedrooms to encourage their children to visit but not move in. Gen Y also likes social aspects, but they prefer a rooftop deck for gathering (it can also double as a marketing venue for the building), dog runs and stylish finishes.

For more on Gen Y retail preferences, see the ULI Special Report “Gen Y Goes Shopping.”

Leanne Lachman

By Suzann D. Silverman, Editorial Director

As retail strives to recreate itself for the post-recessionary market, investors and developers are targeting one group in particular, and they are an opinionated and fickle bunch. The good news is that Gen Y loves to shop, the Urban Land Institute found in its most recent study of the generation’s retail preferences. The study, released at the Spring Meeting in San Diego on Thursday, followed last year’s report on Gen Y housing preferences.

Gen Y, those 18 to 35 years old, constitutes a strong segment for retailers. Beyond being a huge group, they bring financial strength to the market. Sixty-five percent of the 1,251 respondents to the survey do not receive financial help from their parents, with 41 percent working full time and fully 46 percent achieving household income of $50,000 or more per year. Thirty-two percent own their own home (predominantly those in their 30s).

And they are a financially responsible group, noted study author Leanne Lachman. Although they carry an average of $22,000 in student debt, four of five don’t use credit cards and 27 percent pay their credit card bills in full every month.

And they do shop. Eighty-five percent of respondents said they enjoy shopping, and not just women. In fact, eight of 10 men admitted to favoring this pastime. Overall, blacks and Hispanics turned in higher numbers than whites, with 89 percent of each group claiming a liking for shopping versus 83 percent of whites. Only 4 percent of the overall group said they hate shopping.

Shopping for them is very much a social pastime. Sixty-five percent said they typically shop with friends or family members. And 28 percent said shopping centers are their favorite place to get together with friends. Seventy-five percent go out to the movies, And 46 percent eat out with family or friends at least once a week.

Online shopping figures heavily in Gen Y activities, but bricks-and-mortar stores are still important. While 45 percent spend at least an hour online each day exploring retail-oriented sites, they often use Web sites for research, making their actual purchase in the store (conversely, of the 38 percent who purchase electronics online, one-quarter first go to the store for research).

With Gen Yers sporting short attention spans and a low boredom threshold, Lachman advised shopping center owners to think about fresh stimuli to keep this group interested. Certainly they are fickle restaurant goers, but the overall mix in a mall or shopping center needs to appeal to a range of interests that include entertainment, value, style and social gathering. Pop-up shops can be a critical part of this mix, according to Team I-Sight president Linda Berman, who noted they are not just for temporary offerings but are being used for experimentation by well-known chefs as well as established retailers seeking to try new ideas before they implement them in their stores. In fact, she said, they are turning to fashion schools for inspiration, setting up competitions between groups of seniors to get new, inexpensive inspiration from the Gen Y group itself.

Shopping center owners also need to think about other lifestyle preferences, Berman cautioned. For instance, while they have a strong preference for including their pets in many aspects of their lives, “everyone should have great pet concepts in their mall,” she declared, pointing to the hospitality sector, where brands like the Ritz Carlton have figured out how to incorporate pet attendance successfully. Yet among retail center owners, nobody has. With the pet segment highly fragmented, with many mom-and-pop owners, “developers are still looking for retailers.”

The popular stores targeting the generation continue to thrive, according to Steve Morris, president & co-founder of Asset Strategies Group—the likes of Forever 21 or H&M. But don’t be too quick to dismiss longer-standing brands, he cautioned. This group also likes thrift and discount stores. Department stores, too, continue to attract them, although they are using these stores differently, Lachman noted, doing their research online and then heading directly to their target item in the store for purchase. The end result, though, is that Macy’s, despite many dire predictions through the years, keeps performing again and again, noted session moderator Alan Billingsley, principal of Billingsley Investments, and Lachman added that JC Penney ranked high on survey respondents’ preference list despite recent criticism of its experiment with incorporating discounts rather than offering sales.

For a comparison of Gen Y and Baby Boomer characteristics and residential preferences, turn to the ULI Special Report “Across the Generations.”

Renewed development, technology, taxes on internet sales and other retail trends will be in the air when 32,000-plus professionals gather at the Las Vegas Convention Center next week for RECon, commercial real estate’s largest event.

Real estate professionals talk deals at the Las Vegas Convention Center during the 2012 edition of RECon.

Attendees at the International Council of Shopping Centers’ annual spring convention will be pursuing deals and connecting with clients in an atmosphere marked by some upbeat metrics. Colliers International reported on Wednesday that shopping centers absorbed nearly 4.5 million square feet during the first quarter as average asking rents rose 0.3 percent to $14.80 per square foot and vacancy improved from 10.09 percent to 10.06 percent nationwide.

New retail center development and expansion is on the minds of many professionals. “One of the things I’m focusing on is trying to identify (the location) and the velocity of new shopping centers,” said Mark Keschl, national director of Collier’s retail services group. “So far during the first quarter, we’re starting to see green shoots of new centers.” He cited outlet centers as a category that has been subject to considerable buzz, as well as some projects. But, he added, rumored projects of all categories must still land tenants in order to advance beyond the talking stage. In addition to talking deals on behalf of their various clients—retailers, restaurants, owners and investors—Colliers professionals will be taking time to walk the show floor and scope out new retail and restaurant concepts, Keschl said.

An increasingly upbeat assessment of the market is prompting Kemper Development Co. to reveal details of a planned $1.2 billion expansion of the Bellevue Collection, its mixed-use property in Bellevue, Wash. “We are excited about what’s going on in the market,” said Jennifer Leavitt, vice president of marketing. She points to such indicators as 48 consecutive months of improving sales in the company’s retail portfolio and increasing interest in high-end retail, along with strong demand for the property’s office space. Kemper Development regards this year’s RECon more as an opportunity to introduce clients to its plans than as a place to sign tenants to the new space.

In addition to development and leasing opportunities, retail real estate investment will also be in the air at RECon. Heading into the show, the retail real estate investment atmosphere has been somewhat sketchy, asserts Gerard Mason, executive managing director for Savills. “Right now it’s kind of a Mexican standoff,” he said. REITs and other institutional investors are flush with cash, and deploying capital is a higher priority than filling their coffers through asset sales. As Mason sums up the dilemma:  “You can’t sell, because you don’t need the money, and you can’t buy, because nobody’s selling.” New product is difficult to come by these days, but Mason said he expects retail property trades to pick up later in the year as investment managers look to meet goals for allocating capital.

Duke Realty Corp. has sold the Shops at Pembroke Gardens, a 391,120-square-foot lifestyle retail center in South Florida for $188 million to an undisclosed buyer as it continues to reposition to mainly industrial holdings. The Indianapolis REIT noted that proceeds of the sale to an institutional joint venture would be used toward the purchase of an industrial portfolio.

“The sale of this retail asset is in alignment with our asset repositioning strategy, which includes divesting our retail holdings and targeting an asset allocation mix of 60 percent bulk industrial, 25 percent suburban office and 15 percent medical office by the end of 2013,” Denny Oklak, Duke Realty chair and CEO, said in a news release. “This disposition is a significant and strategic step in our repositioning strategy that has decreased our investment allocation in retail assets and resulted in significant gain. Proceeds from the sale will be accretively recycled into an eight-building industrial portfolio that we currently have under contract for purchase.”

Duke Realty built the retail center, located at the Interstate-75 and Pines Boulevard interchange southwest of Fort Lauderdale, in 2008 in conjunction with Jeffrey R. Anderson Real Estate, according to a company spokesperson. The center is 90 percent leased with stores like Bath & Body Works, Sephora, Banana Republic, Barnes & Noble, Old Navy, Ann Taylor and Cold Water Creek and numerous restaurants including The Cheesecake Factory.

“The Shops at Pembroke Gardens is a highly leased property and has quickly established a dominant presence in the South Florida landscape since it was built in 2008, making it attractive to investors,” Danny Finkle, senior managing director of HFF, which advised Duke Realty on the sale, noted in the release.

Finkle’s team at HFF included Jim Batjer, managing director; Luis Castillo, director; and Robert Saracco, a senior analyst. The team worked with Jeff Behm, vice president of dispositions for Duke Realty.

Duke Realty also owns seven acres slated for retail development outside but contiguous to the Shops at Pembroke Gardens and another 44 acres that has been master planned for approximately 700,000 square feet of Class A office space. A Duke Realty spokesperson told Commercial Property Executive that the firm is interested in either selling or leasing those properties.

Ed Mitchell, senior vice president of Duke Realty’s South Florida operations, noted in the news release that the properties have “outstanding accessibility and visibility.” He added that his team is “ready to work with interested parties on land sales and development opportunities.”

Duke Realty has been remaking its portfolio since the fall of 2009, when it consisted of 55 percent office, 36 percent industrial, 5 percent medical and 4 percent retail. Since that time, the firm has been disposing of non-core assets and acquiring more industrial properties, including selling a suburban office portfolio to an affiliate of the Blackstone Group in October 2011 for $1.1 billion. More recently, Duke Realty sold its interests in a joint venture to its partner Chambers Street Properties for $98.6 million. The portfolio consisted of 16 office properties and one industrial asset – Goodyear Crossing Industrial Park III, an 820,000-square-foot warehouse and distribution facility in Phoenix.

The REIT currently owns two other lifestyle retail properties – The Shops at West End in St. Louis Park, Minn., and The Shoppes at Montage in Moosic, Pa.

“Duke Realty’s long-term strategic plan calls for exiting the retail sector,” the REIT spokesperson told CPE. “We will market and sell our remaining retail properties when appropriate to maximize value.”

Global real estate investment manager Amstar has announced the opening of yet another institutional-quality shopping center in Turkey. Located in the underserved market of the city Kahramanmaras, the administrative center of the eponymous province, Maras Shopping Center targets a regional population in excess of 1 million. The asset, developed with Turkey-based Renaissance Development, is part of a three-asset portfolio worth an estimated €570 million ($745 million).

The four-story Maras Shopping Center sits on a 387,500-square-foot site at the junction of the main north-south and east-west highways. Dubbed Piazza Maras, the site’s location ensures Maras Shopping Center with maximal levels of pedestrian as well as auto traffic.

“Due to the project’s prime location and critical mass, we expect it to capture the city’s entire catchment area and be the leading attraction in Maras for the foreseeable future,” said  Amstar Global Partners President Jason Lucas.

Developed in 18 months, the retail and entertainment center was 95 percent leased upon opening. The property includes 153 retail stores, 24 restaurants and cafes, a skating rink, family entertainment center and eight-screen cinema. The first three levels of Maras Shopping Center are anchored by lifestyle, fashion and homeware stores. The top floor however is reserved for the entertainment district, open kitchen concepts, outdoor cafes, dining terraces, housed under a large wood and glass skylight. The property’s design is signed by Hollywood-based architecture firm 5+ Design, and features both modern and historical architecture, with a number of elements drawing on the region’s specific geographic location. The use of stone and wood in the property’s design allow the retail center to easily integrate in the nearby landscape, giving a glimpse into the future of urban development for the Southeastern Turkish city.

Maras Shopping Center is the fourth operational retail center developed in Turkey by the Amstar – Renaissance Development joint venture. The partnership’s completed projects include the award-winning Kozzy Shopping Center in Istanbul, the also acclaimed Adana Optimum in Adana and the recently-opened Piazza Samsun Shopping Center in Samsun. The latter opened in April 2013 and is one of the largest shopping centers in Turkey. The property features 710,000 square feet of gross leasable area and was 98 percent leased upon opening. It boasts 165 international and domestic retail shops, 31 cafes and restaurants, a ten-screen cinema, skating rink, bowling alley and 1,700 parking spaces. Samsun’s first five-star hotel, the 163-key Anemon Samsun expected to open in May 2013, is also part of the project. A fifth shopping center, dubbed Piazza Urfa is currently under development by the same partnership in the city of Sanliurfa. Expected to open in November 2013, the property will offer 506,000 square feet of leasable area, bringing the joint venture’s Turkish retail portfolio to an estimated 2.7 million square feet.

Amstar capitalized Maras Shopping Center along with Piazza Samsun Shopping Center and Piazza Urfa through Amstar Global Property Fund II, Amstar’s second international real estate development fund. The fund closed in mid-2012 after reaching its €95 million (circa $124 million) equity commitment from institutional and high net worth investors from Europe and the U.S. Amstar Global Property Fund II invested in the three-project portfolio along with Renaissance Development, Amstar’s Turkey-based partner. The Renaissance portfolio includes 30 million square feet of commercial space and 11 shopping centers in Turkey.

At the 2013 Mortgage Bankers Association CREF/Multifamily Housing Conference, David Durning, president and CEO of Prudential Mortgage Capital Co., explains Prudential’s targets for balance sheet, Fannie Mae, Freddie Mac and FHA, CMBS and bridge financing for 2013.