VIVA LA RETAIL
|Five Bisnow-ers are in Vegas at the annual ICSC RECon event, pounding the pavement to make sure you don't miss a beat. More tomorrow, but here's what we've found so far: Retail?s back on track, if the 35,000 people expected (and 143 new exhibitors) today are any indication. Bisnow?s reporters will be on the ground for the next two days, bringing you armchair coverage of the biggest retail event of the year. ?We're out of space? on the event floor says a proud David Henry, CEO of Kimco Realty Corp and future ICSC chairman. He says there's hardly any shopping center development right now and international retailers are interested in expanding into the US—and this cross-border attentiveness will only further help shopping centers. But the industry still faces challenges, including the lack of an online sales tax, economic-driven decreases in store footprints, and the continually struggling mom-and-pops.|
We also sat in on a special interest group finance panel, packed with industry folks wanting to hear and have a conversation with top industry leaders like Johnson Capital president Guy Johnson, above, plus two finance gals from Texas (remember, don't mess with Texas)—1st Service Solutions CEO and CMBS vet Ann Hambly and US Bank Special Asset Group West?s Celeste Gladych. Rounding out the cast were Torchlight Investors' Joe Clarke and PCCP partner Bill Lindsey. Hot topic: the portfolio of Nevada properties and notes valued at $1B that was sold off last week in an Archetype and Auction.com auction. (We told you it was coming). Auction.com SVP Ken Rivkin told us this morning the 59-asset portfolio sold for over $340M, many of the assets trading for over $30M. Guy says they traded so high because people thought they were putting one over on the banks and the banks cleaned up.
The conversation quickly turned to borrower workouts of distress CMBS (defaults broken down by vintage: 16.2% in ?05, 23.3% in ?06, 43.6% in ?07, and 20% in ?08). Ann, whose firm is a borrower advocate in loan restructuring and assumptions, says if the borrower is willing to pay, it'll have to be in default or going into default before the lender will discuss restructuring. From a lender perspective, Bill says borrowers need to hand over financials and most of the time there's no workout because there's no agreement on value. Celeste says US Bank will work with borrowers if they can modify and make a loan performing again—and guess what?—character and integrity matter.