Commercial real estate group ICSC grappling with the post-pandemic landscape
Shoppers wear protective masks inside the Glendale Galleria shopping center in Glendale, Calif. On Thursday, May 6, 2021.
Bing Guan | Bloomberg | Getty Images
The world’s largest trade association for the retail real estate industry is rebranding to update its image amid massive changes in the way people shop.
The International Council of Shopping Centers announced on Monday that its initials ICSC will now stand for Innovating Commerce Serving Communities. The ICSC said the changes had been underway for about nine months.
The 65-year-old business group said the change is indicative of how the ICSC, its members – which include owners of U.S. malls and malls – and the entire commercial real estate industry are changing rapidly. , in part due to the repercussions of the coronavirus pandemic.
“The terminology ‘shopping malls’ or ‘commercial real estate’ is still clearly an important part of our membership,” said Tom McGee, President and CEO of ICSC. “But they somewhat describe the historical nature of our members, from a demographic perspective… the type of ownership it was. As opposed to the impact the industry has on communities.”
Today, said McGee, the ICSC’s membership base is expanding to include other companies such as tech start-ups and real estate service providers.
“It’s not just a rebranding,” he said. “To me that reflects what’s going on in the industry as a whole and within our members. And we move with the industry.”
The International Council of Shopping Centers has renamed its name, ICSC, to Innovating Commerce Serving Communities.
The ICSC also hopes that a major facelift will make the trade association more attractive to a younger workforce.
“We need to modernize the brand to attract new and younger generations to the industry and be more welcoming to emerging companies and other sectors within [commercial real estate]”the ICSC said in a dossier sent to some members ahead of the announcement on Monday.
The rebranding comes as much of the commercial real estate industry tries to find a new base as it emerges from the health crisis. One of the biggest threats to many malls and shopping centers has been the rise of e-commerce.
Not all properties have been damaged in the past year. Centers anchored by grocery stores and big box retailers like Target, for example, have flourished as shoppers seek out these businesses for the most part. Others, however – and mostly closed malls filled with clothing stores – have lost tenants and seen shoppers’ traffic fall off a cliff. About 25% of the roughly 1,000 U.S. malls are expected to close by 2025 as more consumers change their spending online.
Visitors are starting to come back. An index of 100 covered shopping centers followed by Retail analytics firm Placer.ai found that buyer traffic was only down 8.1% last month from June 2019, before the pandemic.
Owners face other obstacles in the fundamentals of their business. In parts of the country, rents for commercial assets have fallen and the amount of available space has skyrocketed, with supply far outstripping demand. Across Manhattan, retail rents have fallen for 15 consecutive quarters and are hitting historic lows.
The vacancy rate for all commercial real estate in the United States climbed to 10.6% in the first quarter of 2021, according to a study by real estate firm Newmark and Moody’s Analytics REIS. This marked a high not seen since 2013. More than 3.6 million square feet of retail space was brought back to market in 2020 and 800,000 square feet was returned in the first quarter of this year, have declared Newmark and REIS.
The vacancy rate for US shopping centers reached 11.4% in the first quarter, the highest percentage in a decade, according to REIS.
While the commercial real estate industry has struggled, the ICSC has saw its membership base shrink, according to a report in The Real Deal. It laid off dozens of employees last year, as in-person events were called off and income leveled off, the real estate information website said.
The ICSC has about 50,000 members in North America, according to a spokesperson.
The trade organization’s annual conference in Las Vegas, RECon, did not take place in 2020 due to the pandemic. The event normally attracts tens of thousands of participants from all over the world. The ICSC is now expected to gather its members in Sin City in December, with a full list of in-person events on the schedule for 2022.
“We expect it to be a blast,” McGee said. “People want to come together, and that’s historically what the ICSC is well known for.”