This story originally appeared in Shopping Centers Today on December 4, 2017
By Rebecca Meiser
Michael Glimcher has never known much separation between the retail world and his home life. His family founded Glimcher Realty Trust, a Columbus, Ohio–based REIT that owned roughly two dozen regional malls, open-air centers and fashion outlets before being sold to Washington Prime Group in 2015. In his youth, Glimcher spent many afternoons drifting through the nearby Polaris Fashion Place mall, eating at its food court and speaking with the store owners. Such early experiences never did fade for Glimcher: With nearly 30 years in the industry under his belt today, he became CEO of Chicago-based Starwood Retail Partners in September.
Surely, Glimcher brings to the job not only the lessons derived from his own achievements, but most likely a lot of the valuable things he saw and heard while growing up as well. “The fun part was that my dad had done joint ventures with Ed DeBartolo Sr. and Mel Simon and a lot of other legends in the business,” he said. “He was constantly bringing retailers home for dinner. Retail was just something I grew up around. It was a normal part of my life.” Thus, part of his goal as CEO of Starwood, he says, is to replicate exactly that: a mingled retail and home experience as a normal part of the shopper’s life. “Very clearly, we’re primarily a mall portfolio, and we’re primarily going to do retail, but I think there’s the opportunity to add other uses,” he said.
Like many other shopping center executives, Glimcher perceives value in shrinking down Starwood properties’ traditional apparel footprint in favor of more entertainment-based tenants: beauty salons, gyms, bowling alleys and such like, and of course, restaurants. “I want to give people lots and lots of reasons to come to our properties,” he said. And he does not want those experiences to close down for the day when the stores do. “We are aggressively looking for hotels, apartments and offices that will cohabitate with our sites.”
Glimcher says the locations of Starwood properties will appeal to builders (though the company is uninterested in doing any actual residential development, only in the ground leases and sales). “They’re generally located in the best locations in the markets that they are in,” Glimcher said. “That means that not only do retailers want to be there, but people may want to live and work there too.”
Under Glimcher’s direction, Starwood is assessing its assets to determine which uses are underserved in each market. “Every day my goal is to make the company and each of its assets more valuable,” he said. “And if someone else builds an apartment building or a medical office in our center, that’s a great thing. They are investing in our asset, in our neighborhood.”
Glimcher knows something about value-adding. After graduating from Arizona State University in 1990 with a degree in political science, he went to work at the family company. He worked his way up through the sales and leasing departments and became CEO in 2005. He took over at a time when the company was coping with a portfolio of stale, mostly class-B, midrange shopping centers and outlet centers. Glimcher sensed that customers’ retail needs were changing and that there would have to be fresh reasons for them to come to the centers. In 2008 he tipped the mix at the struggling Scottsdale (Ariz.) Quarter shopping center toward experientially oriented tenants: He recruiting the likes of Dry Bar and Blissful Yoga at a time when leasing to such tenants was hardly the norm. It was a brilliant play — soon Scottsdale Quarter was the company’s highest-performing property, and the now thriving center became the model for all the other properties. By the time the company was sold, Glimcher had successfully repositioned its portfolio from mostly ‘B’ centers to a 95-percent-occupied portfolio of larger-market malls and lifestyle retailers. “The company sold for twice what it was worth at the time I took it over,” he said.
The decision to sell Glimcher Realty to Washington Prime for $4.3 billion was savvy, says David B. Henry, CRX, the now retired vice chairman and CEO of Kimco Realty Corp., and a friend of Glimcher’s. “He orchestrated the sale at just the right time,” Henry said. “He was smart enough to know that REIT prices at the time were high and retail had some challenges coming up.”
Glimcher stayed on with the newly formed WP Glimcher as vice chairman and CEO but then resigned in 2016. His plan was to become an independent private developer, he says, but that all changed when Barry Sternlicht, chairman and CEO of Starwood Capital Group and of Starwood Property Trust, called up. “I hadn’t thought about doing something so big — Starwood has a portfolio of 30 million square feet — but the idea of it was exciting,” he said.
Starwood, for its part, is excited to have Glimcher on board. “His extensive industry experience and far-reaching relationships position him to step seamlessly into this role,” said Sternlicht.
Henry concurs. “Starwood has a portfolio of ‘B,’ ‘B’-plus malls, and Michael knows what it takes to maximize the net operating income, leasing and occupancy,” Henry said. “He’s dealt with problematic properties before. He’s exactly what the doctor ordered.”