Broadcasting live to New York Bloomberg eleventh, to Washington, d C. Bloomberg to Boston Bloomberg twelve, under It to San Francisco Bloomberg nine six to the country US Exam Channel one nineteen, and around the globe the Bloomberg Radio Plus Appen Bloomberg dot Com. This is taking Stock. I'm Kathene Hayes along with pim Fox. We're going to recon. It's the world's largest retail real estate conference where a year's worth of
deals take place in just three days. This conference and convention for the shopping center industry taking place right now in Las Vegas and PM we're gonna speak to the President CEO of International Council of Shopping Centers, who's got a somewhat more upbeep of retail than we've heard on this show. Well, that's good because shopping malls, they seem to be dying a slow and ugly death. We're gonna be taking a look at the world of shopping malls
and retail right now. Let's go to Charles Pellet in the Bloomberg newser in Fort Bloomberg Business Flash. I think of him. Thank you, Kathleen, just getting word of the un Credits Chief executive officer Federico Gazzoni has agreed to step down after almost six years at the helm of Italy's biggest bank, as his efforts to improve capital and revive profit lost the support of investors. He will depart
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US commercial property values they rose by an average of ten percent in twenty fifteen, and since two thousand and nine, well, commercial property values have actually doubled. Here to tell us more about the world of real estate and shopping centers is Tom McGee. He is the president and the chief executive of the International Council of Shopping Centers and he joins us today from Las Vegas. Tom, thanks very much
for being with us. Tell us why you're in Las Vegas along with almost thirty five thousand nine of your favorite friends. Well, good day and thanks for thanks for having me on Tim. I am in Las Vegas is the site of our annual recon convention, which brings together it's actually going to be close to thirty seven thousand people at the at the most recent count that come together fundamentally to do deals, to talk about leasing opportunities
and shopping centers around the country. And there's a tremendous amount of energy that's taking place here. There's a lot of positive feedback about the industry and vibrancy, and I I think that if you took a mood in the temperature of the folks that are here, that would be quite optimistic. I mean, doing a deal, which is fundamentally why people are here, is somewhat of an optimistic bet on the future. And so we're very pleased with the
number of people that are here. And this has got to come to a surprise to anybody who's listening to Bloomberg Radio our guests talking about retail ice age for for retailing right now. According to uh Burt Flickinger of Strategic Resource Group, although your latest figures show that there was actually an increase in UM the malls segment in terms of occupancy combined super regional and regional malls in the first quarter from NYOT four percent now it's up
to ANTY three point seven. But brick and mortar is failing. That's the story, right, I'm not necessarily failing. But it's online sales that are the place to be, is what many are arguing when it comes to retail. Yeah, I know, I know that there is a lot of certainly um folks that believe that that's the case, but that actually isn't the case. I mean, certainly e commerce is here to stay and it's going to play an important role in retail, but um brick and mortars here to day
as well. If physical retail is doing quite well. You know, you mentioned the occupancy rates, and I think what isn't being told and is the real story now is one of conversions that it's not really bricks versus clicks. It's really one of bricks an clicks, and consumers expect a seamless shopping experience, whether they're online or in a physical retail location. And still to this day, the vast majority
of sales in this country happen in physical retail. E commerce sales are less than ten percent of the total retail sales, and actually their growth as the percentage is moderating. If you look at where the growth is coming, Yes, some of it's coming from Amazon, but a lot of it is coming from retailers that have physical locations that
are building out their e commerce platforms. Speaking to this synergistic um synergy between e commerce and physical retail, which we use the term omni channel, What if you could just speak a little bit about the change that has taken place at malls at a time. For example, Macy's shuttering, what thirty six additional stores, seventy eight k martin Sears locations also going to close, but a lot of them.
Malls have to spend capital in order to revamp. But they're not necessarily putting in stores, They're putting in things like restaurants in movie theaters. No, you're absolutely right. I mean I think that what the mall owners and really property owners, whether it's some malls or open air centers, lifestyle centers, etcetera. They're adapting to what the needs of
consumers are. I mean, this is the ultimate consumer facing business, and right now, consumers have a tremendous appetite for entertainment, restaurants,
lifestyle type of things, services and so um. As some of the anchor stores may close, it represents new opportunities to fill that with other offerings that you know, the consumer likes and in fact, you know, I think if you talk to the vast majority of landlords, they would tell you that the you know that that the energy that's in their properties is quite high, and that adding those new locations or new service offerings is quite positive. So this is a day three of RECON, the world's
largest retail real estate convention in Las Vegas. But what are the singles coming out? What deals have been made? Are there certain malls and kinds of malls that nobody wants to invest in, but other ones that are hot? This is what investors want to know. Now, I don't I mean, I wouldn't say that there's one segment of the market versus others that that I would point to
that is particularly doing better or worse. Shire at RECON, I think that when you have thirty seven thousand people here, all of those segments are doing are doing well, and from the standpoint of leasing and deals getting done, I would say that there's just a lot of energy here and I actually this is my first RECON as president CEO of by C s C. And so it is pretty inspiring when you walk around the facility. We pretty much take over the vast majority of Las Vegas Convention Center.
And when you walk around and you see the level of energy and the number of meetings that are being held virtually every one of the uh the locations that are set up, it's pretty overwhelming. And it really, if you think of retail and shopping centers, is somewhat of a of a signal or a bell whether about the American economy. I think it does portel somewhat of an optimistic tone. Right now, Tom, does everybody there want an Apple store in their more? Well? Apple? I think, what,
you know, it's a it's a good point. Certainly Apple is a hot retailer. But I think what what Apple has really demonstrated the importance of experience in the retail environment, and that is I think the theme that is so important to be successful in retail today, which is the consumer expecting experience when they go shopping. It's not just about you know, consummating a transaction and not just that commodity element of shopping, but It's really about how do
I feel when I'm in the shopping center? What does it where does it transport? Mean? To an Apple is a great example of that thematic element of experience being so important. By the way, Tom McGee, president CEO of the International Council's Shopping Centers, joining us from Recall in Las Vegas. This is Boomberg Radio. Bloombertaking Stock is brought to by Audi Medalands in Secauca's New Jersey, powered by Benzel Bush, offering a commitment to service, luxury and value
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