BOOMERS SPEND MOST BUCKS
Young adults may be the hottest demographic targeted by advertisers, but those reliable boomers are still spending the most money, according to the most recent Consumer Expenditure Survey. People ages 45-54 spend an average of $48,748 per year, while ages 25-34 spend only an average of $40,318 per year. Consumers ages 35-44 come in a close second with $48,330.
THE PRICE OF PAN PACIFIC
Pan Pacific Retail Properties, the largest West Coast neighborhood center REIT, is an appealing acquisition target for companies that want to enter the hard-to-penetrate California markets, says Wachovia Securities analyst Jeffrey Donnelly. Other than closely held Donahue Schriber, the Vista, Calif.-based REIT represents the last opportunity for a major shopping center owner to obtain a dominant position out west. Pan Pacific's low financial leverage, simple investment structures, lack of development activity and concentrations in high-quality, high-growth assets and markets indicates a buyer could pay as much as $162 per square foot for the portfolio, Donnelly says. Here are some REIT highlights from 2003:
$245 million worth of non-strategic assets sold
13% growth in same-store releasing rents
5 million sq. ft. added to portfolio
20.8 million sq. ft. in portfolio
95.4% occupancy rate
34.51% of annualized base rent comes from Southern California
5 vacant anchor spaces in portfolio
31% debt-to-total-market-cap ratio
130 properties in portfolio
512 leases expiring in 2005
10 consecutive years with an occupancy rate at or above 95%
Wal-Mart makes up 2.53% of total annualized base rent
3,199 tenants
$6.49 in base rent per anchor square foot
Source: company reports, 2003
THE BIERI REPORT: PHILLY FEET
When it comes to foot traffic, as monitored by consulting firm Bieri Co., The King of Prussia centers rule Philadelphia. Franklin Mills, with its regional draw, also ranks high. Traffic at Marlton Square, Promenade at Sagemore and Glen Eagle Square is much lower, but then these centers are also smaller. Bieri uses five measures to evaluate major market shopping centers: sales per square foot, total sales volume, foot traffic counts, anchors and specialty tenants. Bieri Company will provide foot traffic counts on different U.S. markets in future issues of Retail Traffic.
| Center Name | Foot Traffic Score |
|---|---|
| Burlington Mall | D |
| Gallery at Market East | C+ |
| Echelon Mall | C |
| Exton Square | C/C- |
| Cherry Hill Mall | C |
| Plymouth Meeting Mall | C- |
| Court at King of Prussia | A |
| Moorestown Mall | C |
| Granite Run Mall | A+ |
| Franklin Mills | A++ |
| Suburban Square | D- |
| Glen Eagle Square | D- |
| Marlton Square | D/D- |
| Promenade at Sagemore | D/D- |
| Deptford Mall | B |
| Oxford Valley Mall | B/B+ |
| Springfield Mall | C |
| Willow Grove Park | C- |
| Montgomery Mall | B/B+ |
| Plaza at King of Prussia | A++ |
CHANGE IS THE NAME OF THE GAME
Sporting goods retailers are rethinking their merchandise. Since 1997, the way Americans play has changed. For example, old sporting equipment standbys are losing favor to new pursuits. Snowboarding is on the rise, with 5.6 million participants in 2002, double 1997. Volleyball is down to 11.5 million participants from 17.8 million in 1997, according to data compiled by the National Sporting Goods Association. (For more on sports retailing, see Retail Face Off on page 20.)
