1 00:00:04,080 --> 00:00:08,680 Speaker 1: Broadcasting live to New York Bloomberg eleventh, to Washington, d C. 2 00:00:08,880 --> 00:00:13,480 Speaker 1: Bloomberg to Boston Bloomberg twelve, under It to San Francisco 3 00:00:13,600 --> 00:00:17,840 Speaker 1: Bloomberg nine six to the country US Exam Channel one nineteen, 4 00:00:17,960 --> 00:00:21,480 Speaker 1: and around the globe the Bloomberg Radio Plus Appen Bloomberg 5 00:00:21,520 --> 00:00:25,560 Speaker 1: dot Com. This is taking Stock. I'm Kathene Hayes along 6 00:00:25,560 --> 00:00:29,800 Speaker 1: with pim Fox. We're going to recon. It's the world's 7 00:00:29,920 --> 00:00:33,519 Speaker 1: largest retail real estate conference where a year's worth of 8 00:00:33,600 --> 00:00:37,320 Speaker 1: deals take place in just three days. This conference and 9 00:00:37,320 --> 00:00:40,840 Speaker 1: convention for the shopping center industry taking place right now 10 00:00:40,920 --> 00:00:42,960 Speaker 1: in Las Vegas and PM we're gonna speak to the 11 00:00:42,960 --> 00:00:46,760 Speaker 1: President CEO of International Council of Shopping Centers, who's got 12 00:00:46,840 --> 00:00:49,080 Speaker 1: a somewhat more upbeep of retail than we've heard on 13 00:00:49,120 --> 00:00:52,200 Speaker 1: this show. Well, that's good because shopping malls, they seem 14 00:00:52,240 --> 00:00:55,200 Speaker 1: to be dying a slow and ugly death. We're gonna 15 00:00:55,200 --> 00:00:57,320 Speaker 1: be taking a look at the world of shopping malls 16 00:00:57,400 --> 00:01:00,360 Speaker 1: and retail right now. Let's go to Charles Pellet in 17 00:01:00,360 --> 00:01:03,160 Speaker 1: the Bloomberg newser in Fort Bloomberg Business Flash. I think 18 00:01:03,200 --> 00:01:05,319 Speaker 1: of him. Thank you, Kathleen, just getting word of the 19 00:01:05,440 --> 00:01:09,640 Speaker 1: un Credits Chief executive officer Federico Gazzoni has agreed to 20 00:01:09,720 --> 00:01:12,360 Speaker 1: step down after almost six years at the helm of 21 00:01:12,400 --> 00:01:16,000 Speaker 1: Italy's biggest bank, as his efforts to improve capital and 22 00:01:16,080 --> 00:01:19,760 Speaker 1: revive profit lost the support of investors. He will depart 23 00:01:19,840 --> 00:01:23,840 Speaker 1: once a successor has been named. Stocks are rising the 24 00:01:23,880 --> 00:01:27,800 Speaker 1: most in two months today is increasing speculation the Federal 25 00:01:27,840 --> 00:01:32,000 Speaker 1: Reserve will raise rates this summer, sparks gains in financial shares, 26 00:01:32,360 --> 00:01:35,640 Speaker 1: while housing data signals the economy is strengthening enough to 27 00:01:35,680 --> 00:01:40,039 Speaker 1: support higher borrowing costs. Brad McMillan, chief investment officer at 28 00:01:40,080 --> 00:01:44,320 Speaker 1: Commonwealth Financial Network, says consumers are spending. Just look at 29 00:01:44,520 --> 00:01:47,200 Speaker 1: new home sales this morning, and what that's meant is 30 00:01:47,240 --> 00:01:50,560 Speaker 1: not the consumers can't spend, but that they haven't chosen to. 31 00:01:51,280 --> 00:01:53,960 Speaker 1: But it's also meant that once they choose to start spending, 32 00:01:53,960 --> 00:01:57,080 Speaker 1: there's a lot of dry powder. Speaking of spending, Best 33 00:01:57,120 --> 00:01:59,800 Speaker 1: Buy fell the most in more than four months, after 34 00:01:59,840 --> 00:02:03,680 Speaker 1: four were casting second quarter profit. The trailed animalists estimates 35 00:02:03,960 --> 00:02:08,000 Speaker 1: and announcing the departure of Sharon McCollum, who helped revamp 36 00:02:08,040 --> 00:02:11,760 Speaker 1: the company's operations and cut costs. Best By says McCollum 37 00:02:11,800 --> 00:02:15,800 Speaker 1: will step down as chief financial officer and chief administrative 38 00:02:15,880 --> 00:02:19,720 Speaker 1: officer after the company's annual meeting in June. Best Buy 39 00:02:19,800 --> 00:02:23,120 Speaker 1: shares down today by six point six percent to thirty 40 00:02:23,160 --> 00:02:26,880 Speaker 1: dollars and eighty four cents. Commerce Department said purchases of 41 00:02:26,960 --> 00:02:29,600 Speaker 1: new homes searched in April to the highest level since 42 00:02:29,639 --> 00:02:32,799 Speaker 1: the start of two thousand eight. Tenure down five thirty 43 00:02:32,800 --> 00:02:35,840 Speaker 1: seconds the old one point eight five percent, Gold down 44 00:02:35,919 --> 00:02:39,600 Speaker 1: one point eight percent, SMP up twenty six a gain 45 00:02:39,680 --> 00:02:43,079 Speaker 1: of one point three percent to thirty two on Wall Street. Now, 46 00:02:43,160 --> 00:02:45,600 Speaker 1: I look at other news from around the world. Thank you, 47 00:02:45,680 --> 00:02:49,079 Speaker 1: Charlie from the Bloomberg Newsroom. I'm Vonnie Quinn. Human remains 48 00:02:49,120 --> 00:02:51,519 Speaker 1: may hold the answer to questions about what caused that 49 00:02:51,639 --> 00:02:55,240 Speaker 1: egypt air plane to crash. A senior Egyptian forensics official 50 00:02:55,320 --> 00:02:58,919 Speaker 1: healthy associated press body parts suggest there was an explosion 51 00:02:58,919 --> 00:03:01,560 Speaker 1: on board the plane. Egypt State Van News agency is 52 00:03:01,600 --> 00:03:05,079 Speaker 1: denying the report. However, other Egyptian officials have said they 53 00:03:05,120 --> 00:03:08,919 Speaker 1: believe terrorism is the most likely cause. In a speech 54 00:03:08,960 --> 00:03:12,000 Speaker 1: to thousands of people today in Hanoi, President Obama encouraged 55 00:03:12,080 --> 00:03:16,400 Speaker 1: Vietnam to strengthen its human Rights record, arguing countries prosper 56 00:03:16,639 --> 00:03:20,400 Speaker 1: when they embrace freedom of speech, press and assembly. Confronting 57 00:03:20,520 --> 00:03:26,240 Speaker 1: art imperfections and allowing everybody to have their say has 58 00:03:26,280 --> 00:03:28,560 Speaker 1: helped us grow stronger and more prosperous and more just. 59 00:03:30,120 --> 00:03:32,280 Speaker 1: A new report shows the nation seems to be kicking 60 00:03:32,280 --> 00:03:35,800 Speaker 1: the habit faster than ever. Bloomberg's Michael Barr has more 61 00:03:35,840 --> 00:03:39,520 Speaker 1: on the declining smoking rates. A new government report shows 62 00:03:39,520 --> 00:03:42,520 Speaker 1: smoking among adults in the US felled a fifteen percent 63 00:03:42,680 --> 00:03:45,560 Speaker 1: last year and involved the biggest one year decline in 64 00:03:45,600 --> 00:03:48,680 Speaker 1: more than twenty years. The rate felled two percentage points 65 00:03:48,680 --> 00:03:52,280 Speaker 1: from when about seventeen of an ould said they had 66 00:03:52,320 --> 00:03:57,000 Speaker 1: recently lit up. Experts believe anti smoking ad campaigns, increases 67 00:03:57,040 --> 00:03:59,640 Speaker 1: in the cost of a pack of cigarettes and smoking 68 00:03:59,680 --> 00:04:02,680 Speaker 1: band to play the role in the decline. Michael Barr 69 00:04:02,680 --> 00:04:07,040 Speaker 1: Bloomberg Radio, New York States Attorney general is suing Domino's Pizza, 70 00:04:07,120 --> 00:04:10,840 Speaker 1: alleging it underpaid workers. Eric Schneiderman says his office is 71 00:04:10,920 --> 00:04:15,360 Speaker 1: uncovered called rampant wage violations. The company calls that also disappointing, 72 00:04:15,400 --> 00:04:18,240 Speaker 1: and contends it's worked with the stage for three years 73 00:04:18,279 --> 00:04:21,880 Speaker 1: to help its franchises comply with New York's complex wage laws. 74 00:04:22,160 --> 00:04:24,200 Speaker 1: Global News twenty four hours a day, powered by our 75 00:04:24,200 --> 00:04:27,159 Speaker 1: twenty four journalists more than one fifty news bureaus around 76 00:04:27,160 --> 00:04:30,240 Speaker 1: the world. From the Bloomberg Newsroom, I'm Bonnie Quinn, Charlie, 77 00:04:30,800 --> 00:04:33,839 Speaker 1: and we thank you and again recapping stocks are surging, 78 00:04:33,960 --> 00:04:37,119 Speaker 1: with the SMP five hundred index up one point three percent, 79 00:04:37,200 --> 00:04:40,760 Speaker 1: gaining twenties six points to two thousand seventy four. Town 80 00:04:40,800 --> 00:04:44,800 Speaker 1: industrials up two oh five, a gain of one I'm 81 00:04:44,880 --> 00:04:50,440 Speaker 1: Charlie Peloton. That's a Bloomberg Business flash. You're listening to 82 00:04:50,640 --> 00:04:55,080 Speaker 1: taking stock with pin Box and Kathleen Hayes on Bloomberg Radio. 83 00:04:56,040 --> 00:04:59,520 Speaker 1: US commercial property values they rose by an average of 84 00:04:59,640 --> 00:05:04,800 Speaker 1: ten percent in twenty fifteen, and since two thousand and nine, well, 85 00:05:04,800 --> 00:05:08,560 Speaker 1: commercial property values have actually doubled. Here to tell us 86 00:05:08,600 --> 00:05:11,520 Speaker 1: more about the world of real estate and shopping centers 87 00:05:11,600 --> 00:05:14,479 Speaker 1: is Tom McGee. He is the president and the chief 88 00:05:14,480 --> 00:05:18,200 Speaker 1: executive of the International Council of Shopping Centers and he 89 00:05:18,320 --> 00:05:21,960 Speaker 1: joins us today from Las Vegas. Tom, thanks very much 90 00:05:21,960 --> 00:05:23,640 Speaker 1: for being with us. Tell us why you're in Las 91 00:05:23,760 --> 00:05:27,760 Speaker 1: Vegas along with almost thirty five thousand nine of your 92 00:05:27,800 --> 00:05:31,479 Speaker 1: favorite friends. Well, good day and thanks for thanks for 93 00:05:31,520 --> 00:05:34,039 Speaker 1: having me on Tim. I am in Las Vegas is 94 00:05:34,080 --> 00:05:38,040 Speaker 1: the site of our annual recon convention, which brings together 95 00:05:38,080 --> 00:05:40,520 Speaker 1: it's actually going to be close to thirty seven thousand 96 00:05:41,279 --> 00:05:43,719 Speaker 1: people at the at the most recent count that come 97 00:05:43,760 --> 00:05:48,080 Speaker 1: together fundamentally to do deals, to talk about leasing opportunities 98 00:05:48,120 --> 00:05:51,680 Speaker 1: and shopping centers around the country. And there's a tremendous 99 00:05:51,680 --> 00:05:54,520 Speaker 1: amount of energy that's taking place here. There's a lot 100 00:05:54,520 --> 00:06:00,080 Speaker 1: of positive feedback about the industry and vibrancy, and I 101 00:06:00,080 --> 00:06:02,280 Speaker 1: I think that if you took a mood in the 102 00:06:02,400 --> 00:06:04,159 Speaker 1: temperature of the folks that are here, that would be 103 00:06:04,200 --> 00:06:06,760 Speaker 1: quite optimistic. I mean, doing a deal, which is fundamentally 104 00:06:06,800 --> 00:06:09,560 Speaker 1: why people are here, is somewhat of an optimistic bet 105 00:06:09,560 --> 00:06:12,120 Speaker 1: on the future. And so we're very pleased with the 106 00:06:12,160 --> 00:06:13,800 Speaker 1: number of people that are here. And this has got 107 00:06:13,880 --> 00:06:15,719 Speaker 1: to come to a surprise to anybody who's listening to 108 00:06:15,760 --> 00:06:20,279 Speaker 1: Bloomberg Radio our guests talking about retail ice age for 109 00:06:20,279 --> 00:06:24,240 Speaker 1: for retailing right now. According to uh Burt Flickinger of 110 00:06:24,480 --> 00:06:28,320 Speaker 1: Strategic Resource Group, although your latest figures show that there 111 00:06:28,400 --> 00:06:31,280 Speaker 1: was actually an increase in UM the malls segment in 112 00:06:31,360 --> 00:06:35,279 Speaker 1: terms of occupancy combined super regional and regional malls in 113 00:06:35,360 --> 00:06:37,880 Speaker 1: the first quarter from NYOT four percent now it's up 114 00:06:37,880 --> 00:06:41,719 Speaker 1: to ANTY three point seven. But brick and mortar is failing. 115 00:06:41,800 --> 00:06:44,000 Speaker 1: That's the story, right, I'm not necessarily failing. But it's 116 00:06:44,160 --> 00:06:47,120 Speaker 1: online sales that are the place to be, is what 117 00:06:47,200 --> 00:06:50,080 Speaker 1: many are arguing when it comes to retail. Yeah, I know, 118 00:06:50,160 --> 00:06:53,440 Speaker 1: I know that there is a lot of certainly um 119 00:06:53,600 --> 00:06:56,400 Speaker 1: folks that believe that that's the case, but that actually 120 00:06:56,440 --> 00:06:58,440 Speaker 1: isn't the case. I mean, certainly e commerce is here 121 00:06:58,480 --> 00:07:00,279 Speaker 1: to stay and it's going to play an important role 122 00:07:01,080 --> 00:07:04,240 Speaker 1: in retail, but um brick and mortars here to day 123 00:07:04,279 --> 00:07:07,040 Speaker 1: as well. If physical retail is doing quite well. You know, 124 00:07:07,200 --> 00:07:10,600 Speaker 1: you mentioned the occupancy rates, and I think what isn't 125 00:07:10,640 --> 00:07:13,120 Speaker 1: being told and is the real story now is one 126 00:07:13,160 --> 00:07:16,640 Speaker 1: of conversions that it's not really bricks versus clicks. It's 127 00:07:16,640 --> 00:07:20,640 Speaker 1: really one of bricks an clicks, and consumers expect a 128 00:07:20,720 --> 00:07:23,840 Speaker 1: seamless shopping experience, whether they're online or in a physical 129 00:07:24,200 --> 00:07:27,679 Speaker 1: retail location. And still to this day, the vast majority 130 00:07:27,680 --> 00:07:29,840 Speaker 1: of sales in this country happen in physical retail. E 131 00:07:29,920 --> 00:07:32,960 Speaker 1: commerce sales are less than ten percent of the total 132 00:07:33,000 --> 00:07:36,320 Speaker 1: retail sales, and actually their growth as the percentage is moderating. 133 00:07:36,320 --> 00:07:38,840 Speaker 1: If you look at where the growth is coming, Yes, 134 00:07:39,080 --> 00:07:40,920 Speaker 1: some of it's coming from Amazon, but a lot of 135 00:07:40,960 --> 00:07:44,000 Speaker 1: it is coming from retailers that have physical locations that 136 00:07:44,040 --> 00:07:46,560 Speaker 1: are building out their e commerce platforms. Speaking to this 137 00:07:46,680 --> 00:07:51,000 Speaker 1: synergistic um synergy between e commerce and physical retail, which 138 00:07:51,000 --> 00:07:53,720 Speaker 1: we use the term omni channel, What if you could 139 00:07:53,720 --> 00:07:56,200 Speaker 1: just speak a little bit about the change that has 140 00:07:56,240 --> 00:08:00,520 Speaker 1: taken place at malls at a time. For example, Macy's shuttering, 141 00:08:00,840 --> 00:08:04,080 Speaker 1: what thirty six additional stores, seventy eight k martin Sears 142 00:08:04,080 --> 00:08:07,040 Speaker 1: locations also going to close, but a lot of them. 143 00:08:07,040 --> 00:08:09,920 Speaker 1: Malls have to spend capital in order to revamp. But 144 00:08:09,960 --> 00:08:12,080 Speaker 1: they're not necessarily putting in stores, They're putting in things 145 00:08:12,120 --> 00:08:15,280 Speaker 1: like restaurants in movie theaters. No, you're absolutely right. I 146 00:08:15,320 --> 00:08:17,400 Speaker 1: mean I think that what the mall owners and really 147 00:08:17,440 --> 00:08:20,760 Speaker 1: property owners, whether it's some malls or open air centers, 148 00:08:21,200 --> 00:08:24,360 Speaker 1: lifestyle centers, etcetera. They're adapting to what the needs of 149 00:08:24,400 --> 00:08:27,800 Speaker 1: consumers are. I mean, this is the ultimate consumer facing business, 150 00:08:27,920 --> 00:08:33,240 Speaker 1: and right now, consumers have a tremendous appetite for entertainment, restaurants, 151 00:08:33,559 --> 00:08:37,559 Speaker 1: lifestyle type of things, services and so um. As some 152 00:08:37,679 --> 00:08:40,800 Speaker 1: of the anchor stores may close, it represents new opportunities 153 00:08:40,800 --> 00:08:44,120 Speaker 1: to fill that with other offerings that you know, the 154 00:08:44,160 --> 00:08:46,480 Speaker 1: consumer likes and in fact, you know, I think if 155 00:08:46,520 --> 00:08:49,920 Speaker 1: you talk to the vast majority of landlords, they would 156 00:08:49,920 --> 00:08:52,800 Speaker 1: tell you that the you know that that the energy 157 00:08:52,880 --> 00:08:55,640 Speaker 1: that's in their properties is quite high, and that adding 158 00:08:55,640 --> 00:08:58,640 Speaker 1: those new locations or new service offerings is quite positive. 159 00:08:59,160 --> 00:09:02,560 Speaker 1: So this is a day three of RECON, the world's 160 00:09:02,600 --> 00:09:05,960 Speaker 1: largest retail real estate convention in Las Vegas. But what 161 00:09:06,040 --> 00:09:08,640 Speaker 1: are the singles coming out? What deals have been made? 162 00:09:08,679 --> 00:09:11,120 Speaker 1: Are there certain malls and kinds of malls that nobody 163 00:09:11,160 --> 00:09:13,320 Speaker 1: wants to invest in, but other ones that are hot? 164 00:09:13,320 --> 00:09:15,760 Speaker 1: This is what investors want to know. Now, I don't 165 00:09:15,800 --> 00:09:18,040 Speaker 1: I mean, I wouldn't say that there's one segment of 166 00:09:18,080 --> 00:09:20,800 Speaker 1: the market versus others that that I would point to 167 00:09:20,920 --> 00:09:23,280 Speaker 1: that is particularly doing better or worse. Shire at RECON, 168 00:09:23,400 --> 00:09:26,360 Speaker 1: I think that when you have thirty seven thousand people here, 169 00:09:26,400 --> 00:09:29,200 Speaker 1: all of those segments are doing are doing well, and 170 00:09:29,280 --> 00:09:32,880 Speaker 1: from the standpoint of leasing and deals getting done, I 171 00:09:32,880 --> 00:09:34,760 Speaker 1: would say that there's just a lot of energy here 172 00:09:34,760 --> 00:09:38,120 Speaker 1: and I actually this is my first RECON as president 173 00:09:38,200 --> 00:09:40,760 Speaker 1: CEO of by C s C. And so it is 174 00:09:40,800 --> 00:09:44,160 Speaker 1: pretty inspiring when you walk around the facility. We pretty 175 00:09:44,240 --> 00:09:46,880 Speaker 1: much take over the vast majority of Las Vegas Convention Center. 176 00:09:47,400 --> 00:09:49,120 Speaker 1: And when you walk around and you see the level 177 00:09:49,200 --> 00:09:51,160 Speaker 1: of energy and the number of meetings that are being 178 00:09:51,160 --> 00:09:55,400 Speaker 1: held virtually every one of the uh the locations that 179 00:09:55,440 --> 00:09:58,559 Speaker 1: are set up, it's pretty overwhelming. And it really, if 180 00:09:58,600 --> 00:10:01,800 Speaker 1: you think of retail and shopping centers, is somewhat of 181 00:10:01,880 --> 00:10:04,360 Speaker 1: a of a signal or a bell whether about the 182 00:10:04,400 --> 00:10:07,640 Speaker 1: American economy. I think it does portel somewhat of an 183 00:10:07,640 --> 00:10:10,920 Speaker 1: optimistic tone. Right now, Tom, does everybody there want an 184 00:10:10,920 --> 00:10:14,800 Speaker 1: Apple store in their more? Well? Apple? I think, what, 185 00:10:15,200 --> 00:10:17,760 Speaker 1: you know, it's a it's a good point. Certainly Apple 186 00:10:17,880 --> 00:10:20,600 Speaker 1: is a hot retailer. But I think what what Apple 187 00:10:20,679 --> 00:10:25,520 Speaker 1: has really demonstrated the importance of experience in the retail environment, 188 00:10:25,559 --> 00:10:28,000 Speaker 1: and that is I think the theme that is so 189 00:10:28,080 --> 00:10:30,800 Speaker 1: important to be successful in retail today, which is the 190 00:10:30,840 --> 00:10:34,240 Speaker 1: consumer expecting experience when they go shopping. It's not just 191 00:10:34,400 --> 00:10:37,280 Speaker 1: about you know, consummating a transaction and not just that 192 00:10:37,440 --> 00:10:40,320 Speaker 1: commodity element of shopping, but It's really about how do 193 00:10:40,400 --> 00:10:42,520 Speaker 1: I feel when I'm in the shopping center? What does 194 00:10:42,600 --> 00:10:45,040 Speaker 1: it where does it transport? Mean? To an Apple is 195 00:10:45,040 --> 00:10:48,680 Speaker 1: a great example of that thematic element of experience being 196 00:10:48,720 --> 00:10:52,920 Speaker 1: so important. By the way, Tom McGee, president CEO of 197 00:10:52,920 --> 00:10:56,760 Speaker 1: the International Council's Shopping Centers, joining us from Recall in 198 00:10:56,840 --> 00:11:02,120 Speaker 1: Las Vegas. This is Boomberg Radio. Bloombertaking Stock is brought 199 00:11:02,120 --> 00:11:05,040 Speaker 1: to by Audi Medalands in Secauca's New Jersey, powered by 200 00:11:05,120 --> 00:11:08,120 Speaker 1: Benzel Bush, offering a commitment to service, luxury and value 201 00:11:08,120 --> 00:11:11,640 Speaker 1: with total transparency. Start your journey at Audi medalands dot 202 00:11:11,640 --> 00:11:13,280 Speaker 1: net and define the way you drive.