06/30/2014 | by
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Shopping Center REITs Can Do Experience Retail, Too, Wheeler Says

Jon Wheeler, chairman and CEO of Wheeler Real Estate Investment Trust (NASDAQ: WHLRP), joined REIT.com for a CEO Spotlight video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York.

Mall REITs have been reorienting their businesses around the idea of “experience retail” to make their properties destination centers and combat the rise in e-commerce. Wheeler said those same principles can apply in shopping centers, noting that it has been part of his company’s strategy “for quite some time.” Given the size of the properties, mall owners can implement experience retail concepts on a larger scale, but Wheeler said, his company focuses more on “creating a better cross-shopping, co-tenancy environment” as part of its strategy.

“That includes bringing in retailers that are not currently represented. We also have a tremendous amount of community events that we put on in the centers portfolio-wide,” he said. Examples of such events include holiday celebrations and blood drives.

“Experience retail is not just a new trend, it’s here to stay. I think different [retail property owners] have utilized different venues to enhance that,” Wheeler said.

Wheeler’s company targets secondary and tertiary markets rather than the larger metropolitan areas in part because it can acquire assets at higher cap rates outside of marquee markets, according to Wheeler. He said his company also benefits from its knowledge of the dynamics and retailers in the smaller markets and its relationships with investment brokers in the areas.

Wheeler said the company is in a good position to expand its portfolio in its key markets in part because lenders’ views on shopping center REITs have greatly improved since the financial crisis. He said his company is finding the capital markets are open to financing the business. “Pretty much all the lenders are back” in the market now, according to Wheeler.