As Fairfield County retailers took stock of Black Friday, it appears investors are not averse to taking stock in those stores ”“ by proxy, anyway.
As of the close of November, Urstadt Biddle Properties Inc. could make a claim few Fairfield County companies could match ”“ its stock price was above its level at the start of the year at more than $15 a share.
The Greenwich-based company is among the largest property owners in Fairfield County, with its portfolio heavily slanted toward retail shopping plazas. The company”™s retail holdings in Fairfield County total nearly 1.1 million square feet of space, including Ridgeway Shopping Center in Stamford, one of the two largest shopping centers in the county along with Berkshire Shopping Center in Danbury, which is owned by the Hawley Cos.
Urstadt Biddle also owns the Dock Shopping Center in Stratford and Danbury Square adjacent to Danbury Fair Mall, the largest retail center in Fairfield County.
With Urstadt Biddle”™s fortunes tied directly to that of its tenants, the company”™s stock provides one indicator of the outlook for local retail establishments.
While a few big-box stores are in the process of shutting down locations in Fairfield County, the county”™s retailers have appeared resilient in the early part of the recession, although an economist warned last month that Connecticut will likely feel the full effects of the downturn after much of the rest of the country (see story on page 3).
Despite Connecticut retail sales sagging under the strain of the recession, as evidenced by a sharp decline in sales taxes collected by the state, Urstadt Biddle has maintained its stock price ”“ all the more remarkable given the declines suffered by other small- and mid-cap real estate investment trusts (REIT) with shares listed on the New York Stock Exchange.
“With shopping centers, if the anchor store closes ”¦ you can have a ripple effect, because other stores in that center can close as well either due to provisions in their leases or simply due to a drop in business,” said Wing Biddle, president of Urstadt Biddle. “We have been receiving some calls from tenants seeking a temporary rent relief, but from what I hear from friends and colleagues that own centers in other parts of the country, the drop in store sales in our area has not been nearly as bad as it has been in other parts of the country.”
Urstadt Biddle was the result of a spinout of a Merrill Lynch REIT evenly split between retail, office and industrial properties. Over time, the new company divested much of its industrial and office portfolio to focus on the retail segment where it felt it had a competitive advantage in a steady Northeast market. Urstadt Biddle relocated in 1996 from New York to Greenwich.
The company also owns several office buildings in Greenwich. Including properties in New York and a handful of other states, the company”™s total assets were valued at just over $500 million as of last July.
Biddle said that Urstadt Biddle will be opportunistic about making acquisitions to expand its holdings.
“What”™s happening is that people who own centers in our area want yesterday”™s price if they want to sell, and it hasn”™t sunk into most people about what is happening with prices,” Biddle said. “In Fairfield (County) and Westchester, most of the shopping centers are owned by families ”¦ that have owned the real estate sometimes for generations. They do not have big mortgages and may not be under any pressure to sell.”
