Siege on Retail & Retail Real Estate?

For a number of years, the CRE world has watched anxiously as the face of retail continues to change. There appears to be a siege on brick-and-mortar retail space as the delivery channels for retail products continue to evolve. Will retail space and development be a viable CRE category in which to continue to invest? Will developers still pursue new developments? Are the days of spec retail space over? How do we deliver and cater to the millennial generation? These questions and more are continuing to be a concern to brokers, owners, developers, analysts, researchers and others.

Retail is changing! However, one fact is undeniable. Products are still being bought and retail sales nationally are not declining. In fact, sales are increasing. The mechanism of delivery is the key that has everyone on the edge of their seats in order to understand its implications. In order to catch up to the market and the needs of the consumer, many retailers are changing their approach to what we most understand as “the store.”

Retailers are taking on the language of this generation in full stride. Many retailers have started (and are acting) on these ideas. Many like Starbucks, Apple, Urban Outfitters, along with other retailers want to create an experience for their consumers; a gathering place, a journey, a technological experience, self-checkouts and more.

How has this impacted occupancy and rents? Retail across the nation is seeing slight declines in both rents and occupancy. No doubt this is due to the need for an evolution of the store. Size used to matter; now craft, specialty and experience are driving the retail space market. The need for the Big Box will be very specific to specialty stores. There are a few timeless concepts that have seemed to dial into this philosophy long before it was vogue. Brands like Cracker Barrel, Bass Pro Shops and even a faded brand like Woolworth created an experience for the consumer. Although Woolworth faded, its principles will resurrect in the new era of retail. I shop, I eat and I socialize all at one stop.

Obviously, a few paragraphs cannot adequately address the topic. This is just a teaser of the trends in retail. More importantly though, how will these trends impact the face of retail and what should I look for if I am an owner, investor, developer, researcher or spectator? First and foremost, these trends will undoubtedly have impact on Retail CRE. The impacts will be more focused build-to-suits, urban uptick as far as interest and redevelopment and new communities incorporating a stand-alone experience. Rental rates in traditional retail will continue to see pressure, occupancy rates will most likely see a continued pressure and small-shop space will be in demand.

Why Brick and Mortar Isn’t dead: A Millennial’s perspective.

Retail sales continue to skyrocket online; technology allows office employees to go mobile, and life moves quickly towards a technological environment.

The ongoing discussion regarding the “death of shopping malls”, the “transition of office space”, and even the “lack of need for real estate professionals” often centers on the millennial generation.

Change always accompanies time, and while it may appear there imminent doom looms on the horizon; this transition is nothing new to society.

Time periods similar to the Industrial Revolution and the Digital Revolution both brought changes, not destruction. Each sector of real estate will be affected, but in such a way that they retain a large amount of square footage as a whole.

 

INDUSTRIAL – the growing dynamic of ecommerce, and ordering anything and everything online requires extensive storage. Large warehouses and manufacturing facilities are necessary and will continue to thrive.

 

OFFICE – many employees are working from home, and with video calling, cloud storage, and countless applications to streamline workflow, the “desk with your name on it” is becoming less necessary. However, what we are seeing in this sector is not death but a reformation. Offices are forming into open floor plans with a strong focus on collaboration and creative environments. This is different, but still requires square footage.

 

RETAIL – There is a large perception that retail stores are on the decline relative to their size and square footage. This may not be relative to space, but the stores themselves. Millennials are extremely aesthetic and seek creative, engaging places. This is going to require an effort from retailers to create an engaging store experience that is fueled by tech and aesthetics. Ecommerce is rising, but the larger percentage of customers prefers to “window-shop” online, and buy in stores.

 

OVERALL– concepts may become smaller, more efficient, and open. But the square footage will not dissipate, but rather transition to warehouses instead of full retail. The new generation also seeks more options on food & drink and this will absorb more square footage.

There is no doubt that the face of commercial real estate is changing, and with this change brings new opportunities, and a chance to grow. I am of the opinion while brick and mortar will be impacted and become more efficient, the tangible locations of offices and retail businesses will never be lost. The fact is, people want to deal with people. Although our world moves towards technological interactions, the reality of face-to-face relationships is vital to being

The Case for Social Media in CRE

The Case for Social Media in CRE

“Where did you find us?” – “You’re all over the internet.” A conversation that many professionals in the commercial real estate industry never thought they might have. As our society and industry are dynamically changing, the case for social media only grows in strength. Here’s a quick rundown of why staying active on the Internet is not just important, but now imperative to continue to grow your business.

1. Elevate your platform.

-While the merit of physical networks will never dissipate, social media provides an ability to connect to thousands of individuals in an instant. This shotgun approach to marketing provides an incredible way to share information and market yourself.

2. Build your online presence

-SEO Value

-Connect with Industry Leaders

-Build market trust with potential clients and existing Relationships

3. As our society begins to change, so does the industry.

-The millennial generation is an extremely informed and thus skeptical group. Providing      a continued stream of information that is relevant to your business and community              establishes you as a knowledgeable, trustworthy professional. In most cases, prior to        even meeting a client, they are looking you up online. This includes, website, blog,              social media, and the more you share… the more they believe in your ability as a                professional.

4. Keeps you informed and constantly learning.

– More than the external business relationships, staying active in the stream of                     information keeps you updated, and involved in the flow of the market and industry. We     know that it is imperative to keep learning, social media is a conduit to constantly be           learning and improving your business simultaneously.

 

Now is the time to begin the process of sharing all of your expertise online, and while the dividends are not yet directly connected to one specific post… things are definitively moving in that direction. Get out there, get social.

Boutique Firm or National?

Boutique Firm or National?

 

Often times in the marketplace of commercial real estate many ponder the question, “Should I choose a national firm or a boutique firm?” This might come across as self-serving, but I do believe the facts are credible and they represent the 21st century marketplace. How should you decide and what factors should you consider? Is a boutique firm capable of executing the high-level real estate transactions in the marketplace?

First and foremost, Technology has made a huge difference in the real estate marketplace. Firms of all sizes have access to similar modalities, whether it is a listing service, a database, mapping tools, gap studies, needs analysis, financial modeling, social media, research and analysis, and the list goes on. This advancement alone makes the playing field highly competitive among all sizes of brokerages. No longer do national firms separate themselves from boutique firms in this arena since most are staying on the cutting edge of these technologies.

Secondly, the Network of buyers is no longer limited to nationals. Access to these buyers with all the previous tools mentioned is no longer limited to a select few firms. A boutique firm that is disciplined in the marketplace has the same market presence as their largest competitors. Therefore, listing exposure is on a level playing field and usually will get more attention from a boutique firm.

Thirdly, Commercial Real Estate Organizations are open to all brokers and now firms of all sizes are creating cultures that require involvement in these organizations. Some of these include NAIOP, SIOR, CCIM, ICSC, Retail Live, CFCAR, and others. These organizations thrive on the concept of networking and usually involve the best in class for all brokers no matter the size of their organization. Many transactions result from participation in these highly organized groups that foster relationships and deal making sessions.

Fourth, Specialization in a sector of commercial real estate used to be a differentiator for national firms. They focused on creating experts in each discipline to include Retail, Industrial, Office, Multi-Family, Investment, and Land. Now boutique firms in large and tertiary markets are deploying a highly specialized group of real estate brokers that are the local experts in each discipline. The brokers in these firms are capable and often times more compelling than national firms. I would suggest no matter how you answer the question of which firm to choose, you ensure that your broker is a specialist in the class of real estate you own.

Fifth, Teams are a must in commercial real estate today. The solo practitioner is becoming obsolete since the demands due to technology and the needs of clients are more complex. This has been a standard practice of national firms, as they understood the value of teamwork. Boutique firms are now committed to this strategy in the marketplace and are executing teams with excellence.  This is necessary as it increases marketing horsepower and transaction excellence.

Lastly, Local Knowledge is often times dominated by a strong local boutique firm with excellence in some of the core competencies mentioned above. The local firm is usually plugged into the local economy, the growth, jobs, new developments, local and state trends and drivers in a specific geography. This market knowledge usually cannot be compared to a national reaching into a market that they are less familiar with. Time and again listings will be with a national and nothing happens particularly in a tertiary market like Brevard County. Specialized Brokers with market knowledge are the most effective in a specific marketplace and will produce the desired result more often due to an insider’s perspective.

Written by Jeffery T. Robison, CCIM
Principal | Broker

Success: How to Achieve it, and know you are on the right track

photo credit: SalFalko via photopin cc

photo credit: SalFalko via photopin cc

I recently spent time with the CEO of a well-known REIT for whom I represent a few assets in their portfolio. The title, “CEO” might have led you down the road of thinking “wow he must be a success”.  As we walked along one of the centers, he stopped to bend down and pick up some trash. Note to self, “this guy is a success”. I later joked with him and told him that I had almost picked it up, but wanted to see what kind of man he was, he chuckled in response. Our actions, attitudes and daily choices define true success and our core values.

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Finding Focus at Work: Helpful Hints to Evade the Noise

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photo credit: nadineheidrich

The culture of our day can be incredibly noisy. At times the thought pollution in my mind becomes so much that it is hard to stay focused and have clarity. As I was considering what I did even today, it occurred to me that so many things clamor for my attention and it can constrain my ability to focus and act at times. I am an entrepreneur in the Commercial Real Estate market and there are so many ways to make a buck that sometimes it is easy to chase ALL the golden eggs and wind up (a) “broker” than broke! So how do you gain focus and clarity to be successful in life?

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Client Contact Management: Why, How, and What

contact-manager

In my tenure in commercial real estate, our firm has tried many data management systems for all the right reasons. Throughout this time we have: upgraded existing ones, bought new ones, imported data from other sources, and shopped for the ideal one countless times. This journey seems to be never ending and frustrating as we look for the panacea of client management systems. Each move we have made has been the next best step towards the summit of the peak where we can stick our flag into the ground and claim, “we have made it”. I am certain this is many in the CRE markets quest and I want to share a few practical tips of success that I have learned over the years. Hopefully, these ideas will begin to unlock the magic of a good database and its usefulness in building your brokerage.

1) First of all, there is no panacea! Client management is simply…discipline, discipline, discipline. This effort cannot be polished off or improved by latest and greatest state of the art system. You must dig deep and make it a part of your day, your routine, and your resolve.

2) Second, you must be comfortable with the system you are using. I will refer to this as competence. This is an area that makes the best of intentions with databases falter due to lack of confidence in working your way around the system. If you are uncomfortable, it is imperative that you either get training or request your firm provide it for you.  Having confidence and an understanding will empower you to begin to make headway in your database.

3) Third, be consistent with the information. “garbage in garbage out”. Each system has a few nuances that help you to code or keyword clients in groups. This one area alone is the gold of the system. Would it make a difference in your marketing if you knew all the tenants in your market and could create a list of them with a few clicks to prospect in some way? Once you learn to harvest this list there are a number of modalities that you can utilize to “touch” prospects and clients.

4) Fourth, mobility is a huge asset with a database. With the database I currently use, the interface and syncing function across all of my devices is awesome! I save a lot of time with the ability to look up the contact info of clients in the database when mobile and away from the computer. I know that if I do the work of adding clients, vendors, prospects, etc… into my database, I can access them anywhere I am!

Last, the whole point of databasing is to be able to make money$$$. The skills and tools required are innate to many other areas of our lives we just need to transfer them to managing a huge asset of our business, CONTACT$.  What system do you use? Please share any ideas that you have found helpful.