Many developers are focusing on completing existing projects while keeping an eye on their liquidity. What are their plans for the future?
Most retail property developers are putting the brakes on expensive new projects until they can assess the impact of COVID-19. To accommodate tenants eager to open stores, others are plowing ahead with centers and redevelopments that were already well underway.
At the end of 2019, Regency Centers had $350 million of development and redevelopment in process and nearly $225 million more planned. “Since the onset of the pandemic, we’ve diligently reevaluated future timing and scope for each of these projects,” said CIO and Executive VP, Mac Chandler. They intend to finish construction on those projects that are nearly complete, as well as those where we have lease obligations. The company will spend about $80 million to wrap those projects up, including the new Sprouts Farmers Market-anchored Village at Hunter’s Lake in Tampa, Florida
Supermarkets are driving much of the new construction that is going ahead. Site Centers reduced its construction and redevelopment pipeline by 46 percent, leaving about $30 million to fund ongoing projects, including 10 new anchor stores, said Mike Makinen, Executive VP and COO.
Kimco Realty had only a few active projects when the crisis hit, leaving its pipeline largely on track, CEO Conor Flynn said. As far as minor construction projects go, Kimco has “postponed nearly $100 million of capital expenditures originally planned for this year,” Flynn said.
RPAI reduced planned development spending for this year by $75 million to $100 million, primarily by halting multifamily and office space at its Carillon project in Prince George’s County, Maryland, said Shane Garrison, president and COO.
Brixmor President and CEO Jim Taylor said the firm will push $110 million of anticipated 2020 capital expenditures into 2021. “With a priority on liquidity and an eye towards a more favorable cost environment as we emerge from the crisis, our construction and redevelopment teams are working with tenants to extend certain opening time frames,” he said.
At Weingarten Realty, “all three of our large new developments remain active,” said Andrew Alexander, chairman, President and CEO. The firm expects to complete two supermarket-anchored, mixed-use developments near Washington, D.C., and one in Houston by mid-summer. “Given the small amount of capital required to complete and our strong liquidity position, we do not anticipate that the pandemic will interrupt these projects,” Alexander said.
Federal Realty Investment Trust is paring down its development spending from $35 million to about $10 million a month. The company shut down construction projects in Massachusetts and California but is proceeding with construction at CocoWalk in Coconut Grove, Florida, and the 909 Rose building in Maryland, as both are nearly complete.
Mall owners are reinvesting in existing properties, as few mall-based tenants are growing during the pandemic.
Simon Property Group has suspended or eliminated more than $1 billion of redevelopment and new development globally and is focusing on projects nearing completion.