has just published a two-part Q&A with Hartman Simons partners Lori Kilberg and Benno Rothschild on the outlet-mall development boom. Below are two excerpts: When did the outlet-mall development boom really begin, and how were developers able to quickly assemble the land needed for the projects?

Kilberg: The current outlet development boom is really the continuation of a trend that started decades ago. During the recent recession, so many other commercial real estate sectors stumbled, but outlet malls continued to do well because of their appeal to the value-oriented customer.

Seeing the success of outlets, other types of developers—especially those who had assembled land for residential properties but could not get the financing for those projects—began partnering with outlet developers for new projects. Developers also began redeveloping existing properties, looking to convert projects that had fallen on hard times into outlet properties that could make them money. Is there a certain kind of retailer that is most likely to want to rent space at an outlet center?

Rothschild: The most important tenants for outlets are going to be fashion retailers for the most part, though houseware retailers such as Le Creuset, Williams Sonoma and Pottery Barn are rapidly becoming more prevalent as well. One of the reasons retailers find outlet sites so appealing is that, in general, they have a less expensive rent structure and reduced operating costs, making them more profitable than full-priced stores.


To read the full Q&A, click here for Part 1 and here for Part 2.