Luxury brands moving into US malls; Gaming & Leisure buys property for $250M

S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.

Luxury brands are expanding their retail space in class A malls in the US, taking advantage of the properties' optimized tenant mix, Jones Lang LaSalle Inc. said in a report.

Between July 2023 and July 2024, 48.5% of new luxury stores were opened in malls, while street retail accounted for 40.9% of new store openings. Prime malls had the lowest vacancies, with an average vacancy of 5.8% in the second quarter, on the back of solid demand and positive net absorption, Jones Lang LaSalle said.

Luxury brand owners have entered new markets by launching stores in malls. Kering SA-owned Balenciaga opened a 10,000-square-foot store at the American Dream mall in East Rutherford, NJ, while Saint Laurent entered Maui, Hawaii, and Denver through malls.

LVMH opened its first Dior store in Orlando, Fla., at the The Mall at Millenia, while Loewe opened its first store in Massachusetts at the Copley Place mall in Boston.

CHART OF THE WEEK: Most US office REITs book lower Q2 operating metrics

⮞ Most US office real estate investment trusts reported weaker operating metrics in the second quarter.

⮞ Nine office REITs reported quarter-over-quarter declines in their operating funds from operations (FFO) per share, while seven logged higher operating FFO per share.

⮞ The EBITDA of 12 office REITs declined sequentially in the second quarter, and 10 booked higher EBITDA.

ACQUISITIONS

– Pennsylvania-based Gaming & Leisure Properties Inc. acquired the land underlying the casino and entertainment venue Bally's Chicago at 600 N Wabash Ave. in Chicago, for $250 million. The deal is subject to customary adjustments.

– A joint venture between The Related Group and Integra Investments acquired a waterside property for $100 million at 1809 Brickell Avenue in Miami, the Commercial Observer reported. The joint venture secured a $527 million loan from Tyko Capital for the project.

– Los Angeles-based Afton Properties purchased The Landing at Arroyo, a 212-unit apartment complex in Ventura County, Calif., for $95 million from the USA Properties Fund Inc., the Commercial Observer reported.

STRATEGY

– Outparcel property-focused FrontView REIT Inc. filed paperwork with the Securities and Exchange Commission for an initial public offering expected to raise as much as $100 million, Bisnow reported.

– American Tower Corp. completed the sale of its operations in India to Brookfield Asset Management Ltd.'s Data Infrastructure Trust.

US HOTEL PERFORMANCE

US hotel performance was down year over year across all three key metrics during the week ended Sep. 7, STR reported, citing data from CoStar, which provides information and analytics on property markets.

Revenue per available room (RevPAR) was $86.48, down 5.2% from the comparable week in 2023. Average daily rate decreased 1% to $149.67 and occupancy fell by 4.2% to 57.8%.

Among the top 25 markets, Houston reported the biggest year-over-year gain in occupancy and RevPAR. Detroit and Houston logged the highest increases in average daily rate. Las Vegas and Boston reported the steepest drops in RevPAR.

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