Matt Mason: Retail’s revolving door – The Real Deal
Matt Mason was featured in The Real Deal’s article titled “Retail’s revolving door.”
While REITs have devised redevelopment strategies to convert former big-box spaces occupied by Sears and the Bon-Ton department stores, among others, finding new occupants for the smaller shops is a bit trickier, said Matthew Mason, a managing director with Conway MacKenzie who leads the global management and financial consulting firm’s real estate division. “Those fairly small footprints in the 4,000-to 5,000-square-foot range are usually best for a clothing retailer or soft goods,” Mason said. “A lot of those users are struggling. There is still a lot of leasing velocity out there and store openings, but it is below the number of store closings.”
Mason of Conway MacKenzie concurred. “Old Navy is picking up the slack for The Gap and Banana Republic. Landlords are pursuing more of that value-oriented apparel retailer,” he said.
At least two brands in SPG’s stable of tenants also did swaps to target value-oriented shoppers. True Religion’s stores rebranded as True Religion Outlet, and Johnston & Murphy became the Johnston & Murphy Factory Store.
And there’s still high demand for H&M and Forever 21 stores, as well as discount department stores like Burlington, Marshalls and T.J. Maxx, Mason said. “The thing about discount retailers is that the customer has to go there to see what they have,” he said. “It is an internet-proof business.”
Even as apparel retailers are showing signs of recovery, mall landlords are shoring up their business by branching out with tenants that would typically be located in open-air shopping plazas, from yoga studios to financial-services companies to cosmetology schools, Mason said.
“A lot of malls will start competing with the grocery store power center for these type of tenants,” he said. “We’ve done a couple of deals with swim schools taking space in a mall. From a landlord perspective, it attracts the exact demographic you want: parents with their children. They tend to stay in the mall longer, go to a restaurant and pick up some retail items.”