CoyotE MAnAGEMEnt LP BUYS SIX CENTERS IN AUGUST, THE

Visit us at the 2010 ICSC
New York National Conference
Booth 474
Americas Hall II
A Publication Of Coyote Management, L.P.
Volume 8, No. 2, November 2010
Visit us at CoyoteManagement.com
BIG DEAL: Coyote Management L.P. Buys Six Centers in August, The Largest
Single Acquisition in the Company’s History
Many shopping center owners have talked about
acquisitions during the economic downturn but Coyote
Management, L.P. made it happen. The Dallas-based
company, in partnership with Garrison Investment Group,
through their affiliates have acquired Lakeshore Mall in
Gainesville, GA; Decatur Mall in Decatur, AL; Bellwood
Center, Promenade Montgomery Shopping Center and
Promenade Montgomery North Shopping Center in
Montgomery AL; and Quaker Village in Greensboro, NC.
A total of 1.6 million square feet of regional malls and
outdoor shopping centers.
“We began to assess the distressed sector as a way of identifying attractive properties,” said
Rulli. “We concentrated on regional malls that were under capitalized and under managed,
and fit well into our investment criteria.” During 2009, Coyote met with Garrison Investment
Group who eventually became the company’s capital partner in the August transactions.
The two companies were determined to acquire centers which were in some state of bankruptcy
or foreclosure process. After a portfolio was identified, and due diligence and research was
carefully prepared, a bid package was presented.
Lakeshore Mall and Decatur Mall have strong anchors and offer huge potential to recapitalize
and remerchandise with new tenants. The open-air
centers mark a new sector to Coyote’s portfolio.
Coyote’s Big Buy
© 2010 France Publications, Inc. www.shoppingcenterbusiness.com
The acquisition is a culmination of a number of strategic
“We recognize that this is the first venture for us in this
Michael E. Rulli
moves for Coyote. “These acquisitions represent the next
type of property and we plan to apply the same kind of
phase of
attention
our company’s strategic growth initiatives,” said
that we
The acquisition is a culmination of a number of strategic moves for
Coyote’s Chairman and CEO, Michael Rulli. “We
dedicate to
Coyote. “These acquisitions represent the next phase of our company’s
fully expect Coyote’s ownership of these kinds of
our regional
strategic growth initiatives.”
assets to increase dramatically over the next two
malls.”
– Michael Rulli, Chairman & CEO, Coyote Management, L.P.
years.”
More
Coyote has always had a reputation of buying
than the
value-added malls in secondary markets with high barriers to entry and turning them around.
acquisition itself, Coyote’s transaction has been
Coyote sold off a number of its assets before the recession, gaining top dollar for centers that
groundbreaking in the industry in that it shows that an
it had revitalized and remerchandised, keeping Temple Mall, Temple, Texas, and Alton Square
established company can acquire properties through the
Mall, Alton, Illinois, in its portfolio.
bankruptcy courts.
Coyote Management, L.P., bought six centers in August, and the company is moving ahead
in management as well.
3BOEBMM4IFBSJO
M
any shopping center owners
have had their eyes on the
acquisition market during the
downturn, but few have pulled the trigger. Not so with Coyote Management,
L.P. The Dallas-based company has
reformulated itself in the last few years,
says Michael Rulli, chairman and CEO
of Coyote.
Coyote has always had a reputation of
buying value added malls in secondary
markets with high barriers to entry and
turning them around. Coyote sold off a
number of its assets before the recession,
gaining top dollar for centers that it had
revitalized and keeping just two assets
in its portfolio. In August, Coyote partnered with Garrison Investment Group
to acquire two enclosed malls and four
open-air shopping centers in the Southeast, more than doubling the size of its
ownership portfolio.
The acquisition is the culmination of a
number of strategic moves for Coyote.
“About 18 months ago, we started to assess whether or not we needed to change
our criteria for acquisitions,” says Rulli.
“We initiated research models to ascertain where our real growth was going to
come from. We even considered going
into another sector as a primary investment vehicle.”
In the past, Coyote acquired centers
The interior entrance to the Belk location
at Lakeshore Mall in Gainesville, Georgia.
Lakeshore Mall in Gainesville, Georgia, was one of six centers that Coyote and Garrison Investment Group acquired through bankruptcy court auction in August. The
center was remodeled 4 years ago.
with minimal equity ratios. With the sure on its assets, and the bankruptcy
capital markets no longer able to provide court had ordered the properties be court
large percentages of debt, the company auctioned.
required a change in strategy to move
After the portfolio was identified, Coyforward.
ote and Garrison spent a lot of time doing
“We began to look at the distressed their due diligence and researching the
sector as a way to identify attractive prop- properties to prepare a bid package that
erties,” says Rulli. “We concentrated on the bankruptcy court would accept.
regional malls that were under capitalized
“We realized this portfolio represented
and under managed, and fit well into our tremendous potential, similar to what we
investment criteria. They were, however, had been able to achieve with the properwell positioned.”
ties we used to own,” says Rulli.
During the latter part of 2009, Coyote
By identifying the centers, Coyote
met with Garrison Investment Group, picked up the six centers one-by-one at an
who eventually became the company’s auction in the bankruptcy court in Atlanta.
capital partner in the August transaction. Together with Garrison, the company acCoyote and Garrison discussed strategy quired Lakeshore Mall, a 517,153-squareand how the two partners might pursue foot regional mall in Gainesville, Georgia;
the acquisition market together. The two Dectaur Mall, a 576,000-square-foot recompanies determined to acquire centers gional mall in Decatur, Alabama. Coyote
that were in some state of bankruptcy or and Garrison also acquired several neighthe foreclosure process. The six centers borhood shopping centers as part of the
acquired were former properties of First portfolio, including three in Montgomery,
Republic Group Realty. That company Alabama, that First Republic had acquired
had filed bankruptcy to prevent foreclo- from Colonial Properties Trust in recent
…4)011*/($&/5&3#64*/&44…/07&.#&3
In the past, Coyote acquired centers with minimal equity ratios, but with the capital markets
no longer able to provide large percentages of debt, the company required a strategic change
moving forward.
The newly acquired six properties add an additional 1.6
million square feet to the existing 1.2 million, for a total
of 2.8 million square feet owned and managed by Coyote.
NEW: Decatur Mall
card and stroller program, a new website, new interior and exterior banners as well as a new
marketing and advertising campaign which includes TV, radio, print, and social media.
ShopDecaturMall.com
Decatur Mall is a single-level 576,000 square foot
enclosed regional mall located in Decatur, Alabama
along the city’s main retail corridor on Beltline
Road in close proximity to some of the key retailers,
including Lowe’s and Home Depot. It has four
traditional anchors including Belk, Dillard’s, Sears,
and JCPenney, plus an 8-screen Regal Cinemas and
over 50 specialty shops and restaurants.
Since Coyote purchased the mall in August 2010, they have remerchandised and repositioned
the mall by expanding and renovating Maurices, adding a Guest Services Center, a new gift
Shopping Center Business, full-page
feature, November 2010
Decatur Mall generates 4 million shoppers each year and is the only enclosed mall within a
30-mile radius.
Major Employers
Decatur is home to 18 Fortune 500 companies including Pepsi Cola Bottling Company,
Nucor Steel and General Electric as well as a diverse group of aerospace, pharmaceutical
and manufacturing industries, which provide a solid economic base.
Demographics
*Population *Average HH Income
*Median Age
249,650
$56,000
39
Anchors/Majors/Specialty Stores
Belk
Dillard’s
Sears
JCPenney
Regal Cinemas
American Eagle
Aéropostale
Claire’s Boutique
Bath & Body Works
Finish Line
Hibbett Sporting Goods
Kay Jewelers
Maurices
FYE
Chuck E. Cheese’s
NEW: Lakeshore Mall
population of over 600,000,” said Shawn Merecki, Vice President
of Leasing. “This is a prime location for expanding a retail chain or
for an entrepreneur seeking the perfect spot to start out.”
Lakeshore Mall is located 55 miles north of Atlanta
along the shores of Lake Lanier, the nation’s most
visited lake (over 7.5 million visitors annually) in
Gainesville, Georgia. Lakeshore Mall is a single-level
517,153 square foot enclosed regional mall with
anchors Belk, Sears and JCPenney plus over 50
specialty shops and restaurants.
The City of Gainesville is the retail and healthcare hub for the
Northeast Georgia region, and is the county seat of Hall County
with the 4th fastest growing population in the U.S. Hall County
was ranked one of the “Top 50 Places To Live” (2007 Adventure
Men’s Journal) and one of the “Best Places To Practice Medicine”
(2007 Medical Economics)
ShopLakeshoreMall.com
Since acquiring in August 2010, Coyote is in the process of adding a number of new amenities
including: Guest Services, a new gift card program, stroller program, new website, new interior
and exterior banners, as well as a new marketing and advertising campaign which includes TV,
radio and print.
The mall underwent a $3.5 million renovation in 2006, which included major interior and
exterior enhancements. It is situated in the main retail corridor of Gainesville with Wal-Mart
Supercenter, Lowe’s and Target located in the immediate periphery of the property.
“Lakeshore is the only regional mall serving the 14-county Blue Ridge Mountain region, with a
Shawn R. Merecki
For information, contact Shawn Merecki, VP of Leasing at
[email protected]
Major Employers
Forbes Magazine has ranked Hall County as one of the “best small places for business and
careers.” It is home to a wide range of major employers (over 1,000), including Northeast
Georgia Health Systems, Pilgrims Pride, and Wrigley Manufacturing Company.
Demographics
* Population
* Average HH Income
* Median Age
631,491
$70,336
36
Anchors/Majors/Specialty Stores
Belk
Sears
JCPenney
Express
Bath & Body Works
Victoria’s Secret
Finish Line
Hibbett Sporting Goods
Kay Jewelers
Maurices
Books-A-Million
LensCrafters
Claire’s Boutique
Body Shop
Cato
Coyote’s Senior VP Led Company
In The Acquisition that Doubled
The Size Of Ownership Portfolio
Over 18 months ago, John N. Desco, Senior Vice President,
Asset Management for Coyote Management, began to assess
new opportunities for growing the company’s portfolio. A
tenured financial strategist, Desco has been involved in the
acquisition, ownership, operation and disposition of enclosed
regional malls since 1989 and is responsible for Coyote’s
acquisitions and dispositions, property-level financing, and
day-to-day asset management.
John N. Desco
“We focus on identifying opportunities to increase the
properties’ long-term income through leasing initiatives,
redevelopment, marketing and sponsorship programs,” said
Desco.
The partnership with Garrison Investment Group and the months of work with the
bankruptcy courts to acquire the six properties are a credit to Desco’s insight and laborious
efforts.
“We realized this portfolio represented tremendous potential, similar to what we had been
able to achieve with our existing properties,” said Desco. Coyote acquired the two regional
malls and four open-air centers one-by-one in a live auction held by the bankruptcy court
in Atlanta.
Desco received his Bachelor of Business Administration degree in real estate finance
in 1982 from Southern Methodist University in Dallas, Texas. In 1989, he earned his
Master of Business Administration degree from SMU with a concentration in corporate
finance and real estate finance, receiving several academic awards in the process. He is an
active member of ICSC, and has served on its CSM Committee. In addition, he holds
both Senior Certified Shopping Center Manager (SCSM) and Senior Certified Leasing
Specialist (SCLS) designations. He is also a licensed Real Estate Broker in the State of
Texas.
MARKETING
New Corporate Campaign
Gives Clear, Concise Directive:
SHOP HERE
wHen
to SHop
The campaign will
be utilized
How
monday – Saturday 10am – 9pm
Sunday 12noon – 6pm
to enjoy
at Alton
Square Mall, Temple
Mall, Decatur Mall and
Lakeshore Mall and will
match the criteria of each of
the properties, and be equally
apropos and effective in
each. The “Where To Shop”
campaign reaches varying
wHAtdemographics,
ethnicities,
todiverse
Give
and
retail options.
Stop by our Customer Service Center located on the
lower level near New York & Company and take
advantage of these shopper conveniences.
•
•
•
•
•
:&
Stroller rentals
Complimentary wheelchairs
Lost and Found
Gift Cards
Children’s Birthday party information
HQ
1$OE\6W
SHopper AmenitieS
WHU
'U
+RP
HU
$GDP
AdditionAL CuStomer ServiCeS inCLude:
• Automated external defibrillators (Aed) – contact
mall Security at 558.3041 or in the Security office
on the upper level near Sears
• Atm machine – on the lower level near Sears
• the eagle’s nest Children’s Soft play Area – on the
upper level near Sears
• Fax/ Copy Services – in the Hayner Library and
uS post office inside the mall
V3D
UN Z
D\
200 Alton Square
Alton, Illinois 62002
618.465.5500
Where to shop.
Alton Square Mall offers two convenient
gift card options. The Alton Square Mall
Gift Card is accepted at over 60 fabulous
stores and restaurants inside the Mall, and the
Discover “Anywhere” Card can be used wherever
Discover is accepted. They’re both great choices for
any gift-giving occasion. Available at Customer Service
in any denomination from $25 to $250.
47-10-MIS-BNR1-Banner-Rev.indd 1
10/25/10 11:14 AM
JCPenney • Macy’s • Sears
and many fine specialty shops
“We are proud to roll out the new marketing campaign which
is
ShopAltonSquare.com
designed to maximize traffic and sales,” said Kymberley Scalia,
Corporate Director of Marketing.
There is a $2 service fee per Alton Square Mall Gift Card purchased,
and a $3.50 service fee per Discover “Anywhere” Card.
STORE DIRECTORY
The newly launched corporate marketing campaign,
“WHERE TO SHOP,” gives the shopping centers
a simple, effective message: ‘Shop here because we
have what you need’. The appeal of this campaign
theme is the clear and simple directives of what,
where, when, how and why. It’s like a recipe for
successful shopping: Where to shop, how to save on
your shopping, what’s happening at the center, and
the like. A simple grid of photos against a seasonally
relevant background supports the simplicity of the
message.
Where to shop.
Give a Deca
tur Mall Gi
to purchas
ft Card.
e, visit Custo
at the main
mer Service
, located
entrance ne
ar Chuck e.
A $2.00 serv
Cheese’s.
ice fee per
card applies
.
10/6/10
Where to shop.
t Card Cling
53-HOL-10-R2_Poster Event.indd 1
10/11/10 10:43 AM
10:50 AM
Where to sh
op.
46-10-MIS-W
D1-Gif
Rainbow, a national clothing retailer based in
Pennsylvania has opened a 5,121 square foot
store at Temple Mall, adding to the 20,000
square feet of new merchants added in the first
half of the year, including L’Patricia. Founded
in 1935, Rainbow USA has over 1,200
locations nationwide, and in Puerto Rico and
the Virgin Islands. The retail giant carries an
extensive array of juniors, plus sizes, children’s,
shoes, and fashion accessories.
“Rainbow is a great asset to the property and
complements our existing tenant mix designed
to draw a wide range of shoppers to the mall,” said Shawn Merecki, VP of Leasing.
Temple Mall, is a single-level, enclosed 555,400 square foot enclosed regional mall located in
Temple, Texas, located between Dallas and Austin. It is anchored by Dillard’s, Macy’s and JCPenney
and features an all-digital 16-screen Premiere Cinema and over 50 specialty shops and restaurants.
The mall serves a primary population of over 150,000.
For more information, visit TempleMall.com.
Social Media
Efforts Yield
Huge Results at
Temple Mall
Temple Mall gained 500 Facebook ‘fans’ in less than
three months by creating a “thank you” campaign that
randomly chooses fans to receive prizes including mall
and merchant gift cards and a variety of gifts with
personalized messages in gratitude for their loyalty.
The strategic Facebook initiative was promoted via an
an E-blast campaign to their 5,000 mail subscribers
sending out bi-monthly emails. Collateral marketing
materials supporting the campaign were created
and distributed at mall events and at key locations
throughout the mall.
“This social media campaign is hugely successful
because it targets our most loyal consumers and rewards them with more incentives to shop with us,” said Temple Mall marketing director Lisa Perez.
MARKETING
Marketing Focus Boosts Sales and
Increases Shopper Loyalty
Shopping center marketing is an essential yet often underestimated
aspect of increasing profitability. Leading the Coyote team in awardwinning advertising and marketing initiatives is longtime marketing
strategist Kymberley Scalia, SCMD, Corporate Director of Marketing.
Kymberley S. Scalia
Scalia also focuses on community relationships at each of the markets
Coyote is in. Working with the marketing directors in each of the properties, Scalia believes in using
“grassroots strategies” to attract shoppers to the malls.
to Give
To CelebraTe
Rainbow Joins the MerchanT Mix
For Holiday Season 2010
Scalia incorporates all properties into one strategic corporate campaign,
which is extremely effective and cost efficient. “I always look for
marketing opportunities that impact merchant sales and communicate
new services, amenities and enhancements we’ve made to improve our
malls.”
What
How
TEMPLE MALL
2.indd 1
10/26/10
11:35 AM
A Publication of
Coyote Management, L.P.
16475 Dallas Parkway, Suite 250
Addison, Texas 75001
Phone: 972-248-9375
Fax: 972-248-0871
CoyoteManagement.com
Editor: Kymberley Scalia, SCMD,
[email protected]
Leasing Contact: Shawn Merecki,
Vice President of Leasing
[email protected]
“Our properties are located in smaller, community-minded cities where relationships rule,” she
says. “We look at what the community cares about, whether it’s wildlife, sports, education, or
environmental issues. Then, we work in tandem with the city and community leadership to show
our commitment and build consumer loyalty.”
“I always look for marketing opportunities that impact merchant sales
and communicate new services, amenities and enhancements we’ve
made to improve our malls.”
– Kymberley Scalia, SCMD, Corporate Director of Marketing
Creating positive public relations initiatives is also integral to Scalia’s marketing plan. She works in
partnership with the marketing directors to communicate with key media what is happening at the
centers, with an emphasis on promoting new stores, mall amenities, services, and shopping center
and store events.
Implementing crowd-drawing programs such as “Wine Walk”, where shoppers (over age 21) sample
wines and appetizers at an array of shopping center merchants, art programs, character visits tied
into live radio remotes, free concerts, kids clubs, family movie nights, and savvy gift with purchase
campaigns are essential to the overall marketing strategy to draw shoppers into the center and into
the stores.
In addition, Scalia feels strongly about customer service and has reinstated programs at Lakeshore
Mall and Decatur Mall to help evaluate the level of service and motivate the staff and merchants to
exceed consumer expectations by rewarding excellence. The addition of a Guest Service Center is
a must in her opinion, the perfect place to promote and sell mall services and gift cards as well as
provide amenities such as strollers, lost and found, fax and copy services and more.
Social media is another key marketing tool for the centers. Facebook has a growing presence for each
center, and all websites are monitored and updated to bring viewers the most up-to-date information
available.
“When it comes to impacting sales, we focus on what makes the customer loyal. We want consumer
advocacy. If they are telling everyone they know to shop with us, then I am doing my job right.”