ala moana center presentation
TRANSCRIPT
AGENDA
Market Overview
Ala Moana Center
Expansion and Redevelopment
Louis Vuitton
Leasing Strategy
Economics and Value Creation
Q&A
Ala Moana Center Tour
2
MARKET OVERVIEW
Scott Creel
Senior Marketing Manager
5
6
TOURISM
Hawaii is one of the world’s top tourist
destinations
• 8.2 million visitor arrivals
• 75.4 million visitor days in 2013
• $14.5 billion in visitor spending in 2013
7
TOURISM
57% of Ala Moana Center shoppers are tourists
• 30% of total from Japan
• 8% of total from the U.S.
• 5% of total from Australia
• Growing demand from Korea and China
– 4% of total from South Korea
– 2% of total from China
8
9 9
ALA MOANA CENTER
Kay Day Senior Director of Leasing
10
HISTORICAL HIGHLIGHTS
1884 – Land for sale by estate of Princess Bernice Pauahi Bishop
1912 – Dillingham Corporation purchased land for $25,000
1957 – Construction begins on Ala Moana Center
1959 – Ala Moana Center opens - 680,000 sf, 87 stores
1966 – Doubles in size to 1.3 M sf, 155 stores
1982 – Daiei and Equitable Life acquires Ala Moana Center
1987 – Makai Market food court opens
11
HISTORICAL HIGHLIGHTS
1990 – 3rd Level Center Court Expansion
1998 – Neiman Marcus and Upper Level Expansion
1999 – GGP acquires Ala Moana Center
2003 – J.C. Penney closes
2005 – 30 new stores and restaurants open in former JCP
2008 – Nordstrom and 29 new stores open
2013 – Sears closes and redevelopment project begins
ALA MOANA CENTER - 1932
12
ALA MOANA CENTER - 1957 The swamp land was filled in with acres of coral from nearby Dillingham dredging projects
13
ALA MOANA CENTER - 1960
14
15
ALA MOANA CENTER - TODAY
EXPANSION & REDEVELOPMENT
David Cuthill Vice President - Development
Francisco Gutierrez Senior Director - Development
17
OVERVIEW
GGP acquires Sears pad in early 2012
Construction begins mid-2013
~660,000 square feet of additional GLA
On schedule for completion in Q4 2015
Nordstrom opens in mid-2016
18
PROJECT AREA
18
19
Parking
Structure
Park Lane Condo (Air rights parcel)
Small
Shops
20
STREET LEVEL
MALL LEVEL
21
22
UPPER LEVEL
23
24
25
26
27
28
29
Nordstrom Court
• Add rendering of Nordstrom building/court
30
Nordstrom Court
• Add rendering of Nordstrom building/court
31
Renovation of Existing Mall Center Court
32
Renovation of Existing Mall Street Level Common Area
33
Renovation of Existing Mall Food Court
34
Renovation of Existing Mall Common Area
35
36
37
38
39
40
41
42
LOUIS VUITTON MOËT HENNESSY
John Slavinsky
Senior Vice President-Real Estate
43
44
LVMH at Ala Moana Center
Evolution
Expansion
Rankings
Trends
LVMH in Oahu
45
LEASING STRATEGY
Upgrade luxury and fashion tenants across entire mall level
• Accommodate strong demand from luxury/fashion retailers
Backfill Nordstrom building and wing
• Satisfy demand from large-format stores
Enhance dining and entertainment options
46
NEW TO MARKET RETAILERS
47
RELOCATIONS & ADDITIONAL STORES
STREET LEVEL
48
MALL LEVEL
49
UPPER LEVEL
50
CONCLUSION
Sandeep Mathrani
Chief Executive Officer
52
ECONOMICS
Phase I
Demolish Sears, expand mall, reconfigure center court
$573.2 million total projected cost
$294.3 million investment to date
9%-10% expected return on investment
Q4 2015 expected project opening
Phase II
Nordstrom box repositioning
$85 million total projected cost
9%-10% expected return on investment
53
Value Creation – Phase I
Total Projected Cost $573
Expected Return on Investment 9% - 10%
First Year Stabilized NOI $55
Capitalization Rate 4%
Total Value of Phase I $1,375
Less – Total Projected Cost (573)
Value Creation $802
Diluted Common Shares 946
NAV per Share $0.85
54
CONCLUSION
Significant shareholder value creation
Other value creation opportunities exist
Expansion and redevelopment on schedule and
within budget
Irreplaceable asset
55
Property Tour
Group 1 Kay Day, Senior Director - Leasing
Francis Cofran, Senior GM
Group 2 Jared Chupaila, VP Leasing
Dave Cuthill, VP Development
Group 3 Terry Migliaccio, Senior Director – Leasing
Francisco Gutierrez, Senior Director – Dvpt
Group 4 Jordan Brant – Senior Leasing Rep
Scott Creel, Senior Manager – Marketing
56
BIOGRAPHIES
57
Kay Day
Kay Day is senior director of leasing for General Growth Properties, with primary responsibility for leasing and
merchandising Ala Moana Center. Since joining Ala Moana Center in 1996, Kay has overseen the
transformation of the Center’s tenant mix to rival the best shopping centers and shopping streets in the world.
She was responsible for leasing the last three major development projects, including the upper level expansion
that opened in 1999, the conversion of the former J.C. Penney building into four levels of retail in 2005 and the
Nordstrom wing in 2008. Kay is currently involved in the Ala Moana Center Ewa Expansion scheduled to open in
late 2015.
John Slavinsky
Mr. Slavinsky is currently the Senior Vice President of Louis Vuitton Americas. He is responsible for all real estate
activity, store planning and construction, commercial negotiation with department stores and retail store
network evolution. He is a 26 year veteran of Vuitton.
Mr. Slavinsky, until January of 2001, was the Senior Vice President of Stores for Louis Vuitton North America. Mr.
Slavinsky’s geographic area of responsibility covered the United States, Canada the Caribbean.
He became involved in the luggage and leather goods business in 1968 (16 years of age) and has never
worked outside of the luggage and leather goods industry. He sold his first piece of Louis Vuitton in 1972,
became a buyer of Louis Vuitton in 1981 for his then company, Houston Trunk Factory, and opened a joint
venture Louis Vuitton retail store in the Houston Galleria in 1984. He offices both in Texas and New York. He is
married and has two grown children. John graduated from the University of Texas in 1974.
David Cuthill
Dave Cuthill serves as vice president of development at General Growth Properties. With 20 years of retail
experience, Dave and his team recently finished the redevelopment of Glendale Galleria (Glendale, CA) and
is currently heading up all of the GGP development efforts in Hawaii, including: a) the expansion and
renovation of Ala Moana Center; b) Park Lane Ala Moana residential project, which is being developed by a
partnership between GGP, The MacNaughton Group, Blacksand Development and the Kobayshi Group; and
c) the expansion and renovation of Whalers Village. Prior to joining GGP in January of 2007, Dave spent four
years as a director of retail development for Opus NW and served as divisional vice president at Nordstrom, Inc.
for eight years. Dave’s introduction to the Hawaii retail market occurred in the late 1990’s with the bringing of
Nordstrom Rack to Ward Properties. He holds a Business Administration degree in Accounting from the
University of Washington and a Juris Doctor from Seattle University.
Francisco Gutierrez
Francisco is a Senior Director of Development at General Growth. Francisco has worked in design and
development for 18 years. He is the local contact and the lead for all entitlement, zoning, regulatory and
planning issues for the Ewa Expansion at Ala Moana Center. While at General Growth, Francisco’s involvement
includes the 2008 development of the Nordstrom Expansion at Ala Moana Center, the entitlements of the Ward
Neighborhood Master Plan, and the redevelopment of the Ward Center’s Village Shops. Francisco has also
worked as a Developer at Oliver McMillan, in the development of Pacifica and Symphony, two 40 story
residential high rise projects located in downtown Honolulu. Prior to that, he worked at The Mills Corporation
doing retail and mixed-use development, and as an architect at Gensler. Francisco received his Bachelor of
Architecture and Bachelor of Science in Environmental Design, from the University of Houston, and also holds a
Master of Architecture. He is an active board member of NAIOP, HI.
58
Scott Creel
As senior marketing manager, Scott leads the teams that oversee the extensive resident, domestic and
international consumer marketing efforts at Ala Moana Center, Whalers Village on Maui, and Prince Kuhio
Plaza on Hawaii Island. Prior to joining General Growth Properties in 2010, Scott served as regional marketing
director for MMI Realty Services, Inc., overseeing the consumer marketing efforts for Oahu’s other top shopping
destinations, including Pearlridge Center, Kahala Mall, Aloha Tower Marketplace, Hawaii Kai Towne Center,
Kapolei Shopping Center and Kamehameha Shopping Center. Prior to moving to Hawaii in 1992, Scott worked
for other national shopping center notables including LaSalle Partners Asset Management and TrizecHahn
Corp. Scott has served as a six-time ICSC MAXI Award judge and is active with the Hawaii ICSC planning
committee. Scott graduated from Southwest Texas State University with a BBA Finance, and obtained his
certified marketing director (CMD) accreditation in 1987 and his certified retail executive (CRX) accreditation
in 2013.
Robyn Tucker
Robyn Tucker currently serves as the marketing manager for Ala Moana Center on Oahu and Prince Kuhio
Plaza on Hawaii Island where she contributes to the consumer marketing efforts for the resident, domestic and
international customer and oversees all promotional events and activities. Prior to joining General Growth
Properties in January 2012, Robyn worked for Glimcher Realty Trust as a marketing coordinator for Pearlridge
Center on Oahu. In addition to her experience in marketing shopping centers, Robyn has also worked with
several non-profit organizations performing pro bono public relations and marketing services. Robyn attended
California State University, Sacramento, where she received a double Bachelor’s Degree in
Communications/Public Relations and Dance.
59
Ala Moana Center Expansion
www.alamoanaexpansion.com
www.hdcc.com
www.callison.com
Residential Development
www.parklanealamoana.com
www.tmghawaii.com
www.kobayashi-group.com
ALA MOANA CENTER INFORMATION
60