- February 7, 2014
Five minutes after prominent national commercial real estate executive Robert Taubman gave a tour of a sparkling new mall in Sarasota, he sat in a booth in that center's Cheesecake Factory. He sipped water and wiped sweat off his head with a white handkerchief.
Then, with the not-officially opened mall behind him, a $315 million project that's gobbled up a chunk of the Sarasota-Bradenton business community buzz for months, Taubman did what all successful executives do: He talked up what's next.
For Bloomfield Hills, Mich.-based Taubman Centers, the list is long. It includes three large shopping malls in China in development and pre-development, and a fourth property in Asia, in South Korea, also in the works. The firm clearly wants in on the burgeoning middle class boom in Asia.
Taubman Centers, publicly traded (symbol: TCO), also operates 20 properties in the United States and five in Florida, including Waterside Shops in Naples and International Plaza in Tampa. Several more domestic projects are in development, from Miami to New Jersey.
“We have a lot going on,” says Taubman. “And when you have a lot going on your team has to be absolutely well-oiled. What I tell my investor base is it's all about execution. We executed well in Sarasota. We need to execute well everywhere.”
Taubman spoke with the Business Observer after he led a media tour inside The Mall at University Town Center, an 880,000-square-foot center built in a partnership with University Park-based Benderson Development.
After the tour, Taubman, 60, discussed the obstacles and challenges to getting from groundbreaking to grand opening at The Mall at UTC. He also spoke about the state of the national retail real estate market. Here are edited experts of the conversation:
Try again: Plans for a mall began to formulate in the early 2000s. The location was always the same: in north Sarasota County, just west of the University Parkway exit of Interstate 75. At one point there was a fourth planned anchor, Nordstrom, in addition to potential hotels, homes and office space. But the recession torpedoed some of those initial plans.
“We thought the market was sensational in 2007 and then it fell apart in 2008,” says Taubman. “So we started and then had to stop. And then we had to figure out how to restart. But we thought Sarasota was one of the great untapped markets in America. We thought there was a gigantic retail void and we saw an opportunity to satisfy that.”
Adds Taubman: “I think there's a moment in time when everything comes together and the window of opportunity opens. You have to find that moment and walk through it.”
Even keel: Taubman, named CEO of the family-run firm in 1990, says the biggest lesson he's learned in shopping mall development is to connect parts of all sizes together early in the process. If one part isn't ready, he says, it could trigger a domino effect of problems. “When you build a shopping center the key is the anchor stores and bringing them together at the same time,” says Taubman. “The entitlements have to be in place, the land has to be there, the roads have to be there. All those things have to come together simultaneously.”
Go inside: The Mall at UTC has received praise for its architecture and construction materials. The ambiance is bright and colorful, which provides what mall officials consider both a relaxed and elegant vibe. The interior includes high-quality glass, metal, natural stone and wood. A key feature is a 1,100-foot long curvilinear vaulted skylight with a built-in color-changing LED lighting system that links Macy's at the north end to Dillard's at the south end.
“The physical venue is sensational,” Taubman says. “We love what we've done in terms of giving the customer a wonderful place to be that will encourage them to come into this space because it's such a friendly environment.”
Solid market: Taubman Centers had $767.15 million in 2013 revenues, up 7.1% from $716.39 million in 2012. “When you look at occupancy rates, rental rates and comparable year-over-year growth in companies like ours, publicly traded real estate investment trusts, retail real estate has been doing quite well,” says Taubman, chairman of the Real Estate Roundtable in Washington, D.C., and a board member of the National Association of Real Estate Investment Trusts. “Our share price, even in the big recent downturn, has done OK, much better relative to the market. Today, and in the recent past and in the long past, retail real estate has really outperformed.”
Company. Taubman Centers Industry. Retail, commercial real estate, development Key. Firm opened a new shopping center, The Mall at University Town Center, Oct. 16.
At a glance
Taubman Centers Inc.
Headquarters: Bloomfield Hills, Mich.
History: A. Alfred Taubman, who grew up in the Great Depression in Detroit, founded the firm in 1950. His first job in retail was with a Sims department store in Pontiac, Mich., when he was 11. He later served in World War II, and then, back home in Michigan, Taubman got into retail real estate when he saw the post-war middle class boom. His first project was a freestanding bridal shop in Detroit.
CEO: Robert Taubman
2013 Revenues: $767.15 million
Properties: Firm owns, manages and leases more than 20 shopping malls and retail centers worldwide. The total portfolio posted $721 in average sales per square foot in 2013, an all-time firm record.
Source: Taubman Centers