Shawn Massey, CCIM, SCLS

April CRE and RETAIL ARTICLE ROUND-UP – May 6, 2013

I hope you enjoy!
CRG2 CEO Singer Named Women’s Biz Enterprise Star
MEMShop to target Binghampton area
Nike ‘breaks ground’ in Memphis instead of Mississippi
Say Goodbye to the Office Cubicle
Wal-Mart continues college campus growth
Staples looks to downsize 39 stores
Will J.C. Penney’s Real Estate Be Its Savior?
Top Five Reason to use a real estate professional
D. Scott McLain, CCIM: How Government Influences Retail Site Decisions
CS: Prospecting – The 5 Steps of the Initial Meeting
New York company continues to rack up Memphis real estate
Cordova shopping center sold to Georgia company
Huddle House featured in QSR Magazine
From the Desk of Garrick Brown
2013: The Year of Dollar Stores and Same Day Delivery Service
Before I get into this week’s topic, I got a lot of interesting feedback from our piece last week on dollar stores. Though I am not yet ready to pronounce a dollar store bubble, the rate of growth from this sector of retail has far surpassed that of any other sector over the past three years. Some of the most active chains have been adding 300 to 600 stores annually for the last few years with plans to continue at a similar rate of growth not only in 2013 but for the next few years to come. My basic premise is that all indications are that the return of the housing market should translate into normal GDP growth in the 3.0% range by next year and that the return of home value appreciation should mean that consumers are in a much better place within the next few years. In light of that, is the current rate of dollar store growth sustainable?

First, a couple of new metrics for you. I completed our new 2013 National Retail and Restaurant Expansion Guide this past week (it is now in the capable hands of my art department all of whom I will owe a steak dinner upon their completion of laying out a report that will be close to 200 pages when finished). The report will be released shortly (we are shooting for a week from today), but I crunched some numbers from the different sectors we are tracking.

This year I tracked the growth plans of over 40 national dollar store and discount chains. All told, the plans of these retailers could add as many as 1,858 new units over the next year. This should translate into anywhere from 19.2 to 26.3 million square feet of occupancy growth throughout the United States across all retail product types.

Among the leaders in growth; Dollar General has about 635 stores in development (for an astounding growth rate of nearly two new locations per day), Family Dollar is planning on 500 new stores while Dollar Tree is going to open 300 stores. Meanwhile, Five Below is looking at 60 stores while $0.99 Only is planning on 30. The list goes on and on and I am not even touching on the discounters like Big Lots, Alco, dd’s, Fallas Paredes and others that I include in this same general off-price category. These are stunning numbers for the third year in a row and nearly all of the chains I mentioned are seeking similar rates of growth next year and likely beyond.

My question was basically this; assuming that consumers do eventually return to a better place (maybe not where they were in 2005, but certainly a better place than where they have been), will the market be able to sustain this many dollar stores? My gut tells me no, but that the whole segment certainly won’t come crashing down. But there will be a shakeout. It might not occur for another three or four years, but this is bound to happen.

I heard from a lot of landlords and developers who expressed their concerns as well, as well as their preference to sign five year deals with these tenants—though most of the chains they are seeing are pressing for ten year leases. I heard from a lot of investors who shared my concern that cap rates for dollar store properties as triple net investments may be out of whack with the actual risks. I also heard from some who thought my concerns were overblown—that the economy may come back to 3% growth but that the gap between the haves and have-nots will only increase and this will give the dollar stores legs. That is certainly one of the reasons I am not willing to say there is a bubble yet—the new normal won’t look anything like the old normal and until we see movement in wages, mere job creation alone (since so many of the jobs that have been created are lower paying service jobs) will not be enough to reverse this trend.

But I think that some of the most interesting comments that I got were those that were sent to me by Shan Hatfield, an appraiser with Urban Realty Solutions of Tampa. Shan focused in on the difference between dollar store growth in urban and rural areas. He pointed out that many of the most active chains he sees in Florida are focusing on rural growth and that this may be their saving grace. According to Mr. Hatfield; “In Florida we are witnessing Dollar General, and similar stores, popping up in great numbers. Some of these stores are in urban areas, but most of them are being built in rural locations. In reading your analysis of Dollar Store economics, I feel that it lacks the key element of fuel costs as it relates to rural retailing. Most Americans are city dwellers and are not conscious of what it costs to go “into town” for goods and services. I believe these rural locations contend with different factors than the urban locations, in that the price of fuel greatly affects local demand. The equation is pretty simple: The consumer’s car gets 20 miles per gallon. Wal-Mart is 15 miles away and Dollar General is 5 miles away. The round trip to Wal-Mart is 1.5 gallons of fuel; the trip to Dollar General is 0.5 gallons of fuel. This equates to Wal-Mart costing $3.50 to $4.00 per trip more than Dollar General. For weekly or monthly shopping, Wal-Mart is the one stop retailer for groceries and home goods, but for one or two items, Dollar General is more economical choice, and depending on the distance to Wal-Mart, may be the only choice.”

He concludes, “I believe the cost of fuel is significantly changing retailing in rural communities, because in many cases the cost to drive to the store is now more expensive than the goods at the store. Compare the cost of a gallon of fuel to the cost of a roll of aluminum foil, a box of garbage bags, or a bag of charcoal. The rural consumer is not going to casually drive 15 miles to get these things. They will do without until they are close to the store or they will find a closer alternative. These rural stores will have an advantage over the larger do everything urban stores, until, like you propose there are too many of them, or the price of household goods inflates to match that of fuel; making it a benefit to drive the 15 miles for a better discount. Maybe there is hope for them.”

Very insightful and interesting points to chew on. Assuming Mr. Hatfield is right, then it may be Walmart that has the most to fear. That being said, I am not sure things will play out that way—though I am in 100% agreement that the dollar chains would be best focusing their growth in rural communities. That being said, I still think that if I were Dollar General that I would consider lowering my growth rate next year just a notch or two.

Moving on, while bricks-and-mortar retail growth is being dominated by low price point players (dollar stores, discounters, off-price apparel chains), food related users (groceries and restaurants) and service providers (automotive, cellular, etc.), hard-goods retailers are mostly on the sidelines. But they are far from inactive.

From a commercial real estate perspective, it would be easy to see the rise of e-commerce as being a us versus them phenomena. And certainly, there is no doubt that bricks and mortar landlords are feeling some pain. E-commerce has wiped out a few bricks and mortar sectors. It has slowed growth and is posing real challenges. It is forcing landlords and retailers alike to rethink the entire shopping experience.

But the best retailers aren’t just rolling over and a number of them are looking to beat Amazon at its own game. In past newsletters we have talked about some of the space implications for landlords and shopping centers and how “Experiential Retail” would be the buzz words of the next few years in the bricks and mortar segment. While this is true, the buzz words for the retailers themselves are ‘Omni Channel.”

2013 is the year of same day delivery. Amazon currently has about 50 million square feet of warehouse distribution space throughout the United States. They plan to boost that number to 90 million square feet by 2016 and are actively shopping multiple million square foot warehouse requirements across multiple major U.S. markets.

Many have speculated that this might be a tax play. Certainly, from my outpost here in Northern California, I heard plenty of that as they inked two recent million square foot deals for warehouses in the central California towns of Tracy and Patterson. Why else would they make such a move, when they already had a monstrously huge warehouse facility just over the state line in Fernley, Nevada that already served Northern California and most of the West Coast. Speculation regarding the ICSC-backed Main Street Fairness Act has been part of this. This is the legislation that would essentially take away the loophole that leaves billions of uncollected state sales tax on the table with most online sales. Yet, this piece of legislation only recently began to gain traction. Before the election it was going nowhere, with House Republicans fearful to support it—lest it be deemed a tax increase. We still don’t know how the House will go, but the Senate recently passed it. But Amazon’s moves were planned long before these events. The reason is simple; their goal is to conquer the bricks and mortar world by creating the first workable same day delivery infrastructure.

And though it remains to be seen if same day delivery can actually be done in a workable way (previous attempts have always collapsed under the costs involved), the race is on. Amazon is already beta testing a service in ten major U.S. markets. They are not the only online player in the game—eBay is testing a concept in two markets and Google recently announced plans to launch a service in San Francisco that may serve as a model for rolling out to other cities.

Yet, as frightening as this may sound to some bricks-and mortar retailers, this is actually where many of them may already have an advantage. With local outlets already in place, for many retailers the issue will just be one of tackling the supply chain and logistical challenges of truly integrating their online and bricks and mortar presence to serve in this capacity. Which is why, for many retailers, this has become the big challenge of the next couple of years and why many will be focusing much of their capital expenditures budgets towards IT and logistics, rather than new stores or remodels.

This year will be the first that Target is expected to spend as much on their supply chain and technology infrastructure as they do on new store and remodel investment. Meanwhile, Macy’s, Nordstrom and Walmart are all also integrating their online platform with their stores for inventory management and order fulfillment. In fact, Nordstrom has been testing a same day delivery pilot since 2011 and may be the most ahead of the game. Regardless, the concept is simple—utilize your entire infrastructure (warehouses and bricks-and-mortar stores) to fulfill e-commerce sales.

Macy’s has been exploring that concept with a number of its stores, but they have also joined with Target and Walgreen’s in partnering with eBay in testing a mutual service that might offer same day delivery. Meanwhile, Walmart has a pilot in four markets, and also recently made the extremely outside the box (and possibly just thinking out loud statement) that they were looking at a number of options to create same day delivery functionality, even that of utilizing in-store customers to deliver goods to their neighbors. Not sure how this would work, but assume that you could tell your clerk at check-out that you were game for an additional merchandise discount if there were any packages to deliver near your house? Regardless, the long and short of it is that the race is on and existing bricks and mortar retailers actually do have two advantages over Amazon. They have stores in place (though they might not yet have the infrastructure needed) and they have the one thing that Amazon still does not have—the bricks and mortar locations that make it easier for customers to return goods.

2013 is the year of same day delivery. We might not see workable systems online until next year and I suspect that we will never really see this in rural locations. In fact, what I really anticipate is that next day delivery ultimately becomes the norm and that this will be a sustainable practice. But as scary as that may sound to bricks and mortar players, here is the good news; those who master Omni Channel marketing may actually be able to finally compete with Amazon in the digital world.
Terranomics Top Five
Report: Asian and Hispanic households outspend White non-Hispanic households
Drug Store News 04.04
The Economist: Expect major growth, competition for retail clinics, urgent care and telehealth
Drug Store News 04.04
Macy’s, Others Turn Stores Into Online Fulfillment Centers
Forbes 04.03
Amazon, Walmart experiment with lockers
Drug Store News 04.03
Internet Shopping Sprees Are Driving an Astonishing Building Boom
Wired 04.03
The Big Picture
Survey: More consumers plan to use tax refund to shop
Chain Store Age 04.03
Why Grocers Like Tesco Find Trouble in the U.S. Market 04.03
Same-day shipping will soon be ubiquitous
CNN Money 03.29
Retailer Roundup
Microsoft Specialty Store to open kiosk at International Plaza in Tampa
Tampa Bay Times 04.06
Happy Socks To Open Retail Store In New York City
PRNewswire 04.05
Gander Mountain opens first firearms store in Minnesota
Retailing Today 04.05
Fruth opens 27th store in Ironton, Ohio
Drug Store News 04.05
Bed Bath & Beyond, T.J. Maxx head to Wendover Village
The Business Journal 04.05
Former J.C. Penney building to become world class math facility
Austin Business Journal 04.04
Samsung to open shops inside Best Buy stores
Retailing Today 04.04
British Chic Tested as Asos to TopShop Seek U.S. Growth
Bloomberg 04.02
OfficeMax goes big with small business store
Retailing Today 04.02
Shoe Carnival Q4 profit slips; on track to open 30 stores in 2013
Chain Store Age 04.01
Leslie’s Swimming Pool to open 48 stores this spring
Chain Store Age 04.01
Aaron’s plans 125 stores and 750 retail jobs for 2013
Chain Store Age 04.01
Grocery Grab Bag
The Restaurant Review
One to Watch: Muscle Maker Grill opening 25-35 each year for the next 5 years
QSR 04.05
TravelCenters of America Opens New QSRs
Convenience Store News 04.03
Twisted Root Looks to Suburbs for Growth
Nation’s Restaurant News 04.03
First Watch plots aggressive expansion, tripling locations by 2017
Nation’s Restaurant News 04.02
Gas Station Fueling Growth with New Fast Casual Concept with 11 new openings 04.02
‘Global Domination’ Driving CEO of Dickey’s Barbecue 04.02
First Watch to Open New Restaurants in Florida, Georgia and Tennessee
Restaurant News 04.01
REIT/Investment Outlook
STORE to Applebee’s Franchisee: See You Tomorrow buying 34 restaurants
Globe Street 04.03
Someone recently asked me for a brief explanation of what makes a great economic development web site.
Here’s what I had to say.
What Lease Writers (And Others) Don’t Understand About Builders Risk Insurance Coverage
5 Commercial Real Estate LinkedIn Groups You Must Follow Marketing: most effective tool ever or a necessary evil that just won’t go away? u/?goback=%2Egde_2141955_member_229781329

Survey: More consumers plan to use tax refund to shop
April 3, 2013 Los Angeles — Survey results released Wednesday by PriceGrabber found that 54% of consumers expect to receive a tax refund this year. And, the majority plans to use the money for purchases.
According to PriceGrabber’s poll of 5,655 U.S. online shopping consumers, 24% anticipate a bigger refund than last year and 26% expect about the same amount. Thirty-two percent anticipate receiving less compared to 2012, and 18% aren’t sure how much money they will receive.
Tuesday Retail & Consumer Round-Up
April 2, 2013 Despite another week of unseasonably cold temperatures across much of the U.S., shoppers stepped up their spending in the week leading up to Easter. However, the frosty start to spring, especially compared to record-warm temperatures last March, means we will most likely start to see steep markdowns for apparel and seasonal merchandise.
The International Council of Shopping Centers (ICSC) reported that chain store sales rose 1.9% for the week ending Mar 30th compared to the year-ago period, while sales soared 4.7% over the prior week, which was the best performance in over 17 years. However, that was more a reflection over the timing of Easter and will be offset by a sharp fall next week.
Consumer Spending in U.S. Climbs by Most in Five Months
March 29, 2013, Consumer spending climbed in February by the most in five months and confidence unexpectedly improved in March, showing job-market gains are helping Americans overcome tax increases and concern about federal budget cuts.
Purchases, which account for about 70 percent of the economy, rose 0.7 percent after a 0.4 percent advance the prior month that was bigger than previously estimated, according to Commerce Department data today in Washington. Another report showed consumer sentiment advanced to a four-month high.
Apparel Stores
Abercrombie & Fitch reveals international expansion plans
April 3, 2013 New York — In its annual report filed Tuesday, Abercrombie & Fitch revealed that it plans to open Abercrombie & Fitch flagship stores in Seoul and Shanghai in 2013, as well as 20 international Hollister stores. The news sent the teen retailer’s shares rising on Wednesday.

The company also said in the report that it is maintaining its focus on boosting profitability by simplifying processes, eliminating less-profitable parts of its business, shoring up efficiencies and cutting expenses.
Jos. A. Bank fiscal 2012 profit slips, sales rise
April 3, 2013 Hampstead, Md. — Jos. A. Bank Clothiers reported Wednesday that net income for the fiscal year ended Feb. 2 slid to $79.7 million, from $97.5 million in the prior year.
Annual sales rose 7.1% to a record $1.05 billion, from $979.9 million. Same-store sales decreased 0.5%. Jos. A. Bank had warned that net income for fiscal year 2012 was expected to be approximately 20% lower than net income for fiscal year 2011.
rue21 Opens 900th Store on the Way to 1,000 This Year
March 27, 2013 Value-fashion retail chain rue21 opened its 900th store this month in the Southern Hills Shopping Center of West Plains, MO. The 5,000-square-foot store is the company’s 21st location in that state.
The Pittsburgh, PA-based retailer has successfully opened more than 500 stores in the last five years and expects to open another 125 stores in 2013. The fast-growing retailer has and has opened 23 stores so far this year. The company intends to open its 1,000th store in the fourth quarter of 2013, and the company’s long term plan is to grow the chain to more than 1,700 stores in the United States.
Drug Stores
Rite Aid comps down in March
April 4, 2013 CAMP HILL, Pa. — Same-store sales at Rite Aid decreased 2% in March, including a 3.8% increase in same-store sales on the front end and a 4.5% decrease in pharmacy sales.
The 4,621-store chain reported total sales for the month of $1.939 billion, a 2.5% decrease compared with $1.989 billion in March 2012, while same-store prescription count increased 0.3%. The company said that of the 3.8% increase in front-end same-store sales, 3% came from a shift in timing of Easter, which fell on March 31, as opposed to April 8 last year.
Walgreens reports March sales increase of 2.3%
April 3, 2013 Deerfield, Ill. — Walgreens reported Wednesday that sales for the month of March increased 2.3% to $6.2 billion.
Total front-end sales increased 5.4% compared with the same month in fiscal 2012, while same-store front-end sales increased 4.2%. Front-end sales will have benefited from a March 31 Easter — last year Easter sales fell in April. As a result Walgreens said it will report combined comps for March and April with its April sales results.

Electronic Stores
Samsung to open shops inside Best Buy stores
April 4, 2013 RICHARDSON, Texas — Best Buy has partnered with Samsung Electronics to install Samsung Experience Shops in more than 1,400 Best Buy and Best Buy Mobile specialty stores across the United States beginning this month. By early May, 900 Best Buy and Best Buy Mobile specialty stores will feature the Samsung Experience Shop, with the remainder launching by early summer.
Ahold USA adds six more LEED stores to its fleet
April 2, 2013 New York — Ahold USA, a division of Netherlands-based Royal Ahold, said six newly built stores had received LEED (Leadership in Energy and Environmental Design) certification from the U.S. Green Building Council. The locations include four stores in the Stop & Shop New England and New York Metro divisions, one in the Giant-Landover division and one in the Giant-Carlisle division.
These stores feature white roofs to reflect sunlight and reduce heat gain in the stores, skylights to harvest daylight and reduce electricity consumption during peak daylight hours, and LED lighting throughout the store. Smaller cooling systems are improving the efficiency of refrigerated display cases and open deck refrigerated cases have been replaced with closed door ones.
Report: Tesco exploring options for Fresh & Easy
March 29, 2013 New York — British grocery giant Tesco is moving closer to selling off its U.S. Fresh & Easy division, with Tesco CEO Philip Clarke traveling to the United States next week to try and strike a deal.
Tesco has held discussions with Trader Joe’s and others about selling Fresh & Easy, but a break-up of the business is considered the most likely option, the report said. Other options include closing the business and selling off assets.
Supervalu Cuts 1,100 Jobs
March 26, 2013 MINNEAPOLIS — Supervalu here on Tuesday said it would cut an estimated 1,100 jobs in the wake of its sale of its largest retail chains.
The reductions include both current positions and open jobs that will not be filled. The final dates for the affected employees vary.
Home Improvement & Office Products
Furniture, bedding help Conn’s more than double profit
April 3, 2013, THE WOODLANDS, Texas — Specialty retailer Conn’s Inc. said profits more than doubled in the quarter ended Jan. 31 as it continued to focus on higher-margin goods such as furniture and bedding.The company, which also sells appliances, consumer electronics, and lawn and garden equipment, said furniture and mattress sales accounted for 20.9% of product revenues in the quarter and 30.8% of the product gross profit.
Total revenues, including its in-house credit operation, were $250.3 million, up 10.4% from $226.7 million in the three months ended Jan. 31, 2012.Net income was $17.7 million or 50 cents per share. That was up from $7.7 million or 24 cents per share in the comparable quarter.
Aaron’s plans to open 125 stores this year
April 1, 2013, ATLANTA — Rent-to-own merchant Aaron’s says it plans to open 125 stores this year and hire 750 people. At its 2013 National Managers Meeting in Nashville, Atlanta-based Aaron’s also reported that the company and its franchisees had added a combined 950 employees last year in the United States and Canada.
“Aaron’s has experienced consistent growth, with 2012 delivering financial results that were the best in the company’s history,” Aaron’s Chairman, President and CEO Ronald Allen said in a release. “We plan to continue new store openings in 2013 across the United States and Canada, which in turn creates jobs.”
Little Greek Restaurant Dives into Retail
April 5, 2013 Little Greek Restaurant is making a name for itself as an emerging concept in the restaurant industry. In January, development plans were announced for 2013 openings, including opening six franchised locations in new markets, including Austin, Texas; Louisville, Kentucky; and Little Rock, Arkansas. Little Greek is also developing a new prototype with the projected opening of a New Tampa location in late April. In addition, Little Greek Restaurant is advancing into the retail industry with making its signature products available for purchase.
Taco Bell aims to double domestic sales
April 4, 2013 Taco Bell intends to double its domestic sales from $7 billion to about $14 billion over the next decade with more menu innovation, the rollout of breakfast and a new snack-focused afternoon “Happier Hour.”
Taco Bell Corp. chief executive Greg Creed outlined the Irvine, Calif.-based quick-service brand’s strategy for the next 10 years as a keynote speaker at the 17th annual UCLA Extension Restaurant Industry Conference in Los Angeles on Wednesday.
Nutrition firm seeks to complete growth
April 03, 2013 One of the largest health industry franchise chains in the country, Omaha, Neb.-based Complete Nutrition, plans to expand on the Gulf Coast.

The company, with 171 locations nationwide, is in five Florida markets. That includes two stores in Sarasota and one in Cape Coral. But the chain doesn’t have any stores, so far, in Tampa Bay — even though it recently signed popular former Buccaneers running back Mike Alstott to a national spokesman role. “We view Tampa Bay as potentially a great market for us,” Complete Nutrition Vice President of Development Steve Brewster tells Coffee Talk.
Restaurant Industry Takes a Tumble in February, NRA Says
April 2, 2013, Due in large part to softer same-store sales and customer traffic levels, the National Restaurant Association’s (NRA) Restaurant Performance Index (RPI) slipped below 100 in February.
The RPI, a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry, stood at 99.9 in February, down 0.8 percent from January’s five-month high. February represented the fourth time in the last five months that the RPI stood below 100, which signifies contraction in the index of key industry indicators.
First Watch to Open New Restaurants in Florida, Georgia and Tennessee
April 1, 2013 Bradenton, FL Award-winning Breakfast, Brunch and Lunch restaurant First Watch today announced plans to open restaurants in Orlando, Fla.; Alpharetta, Ga.; Dunwoody, Ga.; and Franklin, Tenn. The new restaurants will employ approximately 25 people each.
Subway Named Brand of Year in 2013 Harris Poll EquiTrend Study
April 1, 2013 MILFORD, Conn. — The Subway restaurant chain has been named Brand of the Year in the Quick Service Restaurant category according to the 2013 Harris Poll EquiTrend study. This marks the ninth year in a row that the sub sandwich franchise has received the highest score among QSR brands included in the annual study which measures consumer perceptions of more than 1,500 brands in more than 155 categories.
The Harris Poll EquiTrend study, conducted by Harris Interactive, reveals the brands that Americans rank highest in brand equity. Surveying more than 38,000 American consumers, the study measures the level of quality, familiarity, and purchase consideration for each brand, and then awards “Brand of the Year” status to the top-ranked brand from each category.
Dollar Stores, Warehouse Club & Other Retailers
Study: DSW is America’s favorite shoe retailer, followed by Nordstrom
April 3, 2013 Boulder, Colo. — In survey results released Wednesday by Market Force Information, DSW was named America’s No. 1 shoe retailer by more than 4,000 consumers polled.
Nordstrom, Nike, Shoe Carnival and Famous Footwear rounded out the top five.
Shoe Carnival Q4 profit slips; on track to open 30 stores in 2013
April 1, 2013 Evansville, Ind. — Shoe Carnival reported Monday that net earnings for the quarter ended Jan. 28 slipped to $3.2 million, compared with $3.3 million in the year-ago period.
Revenue rose 13.1% to $205.7 million from $181.9 million, and same-store sales edged up 0.5%. For the full year, profit rose to $29.3 million from $26.4 million, sales increased 12.1% to $855 million, and same-store sales advanced 4.5%.
Toys’R’Us sales slip in Q4
March 29, 2013 WAYNE, N.J. — Toys“R”Us reported that sales for the the fourth quarter decreased $155 million to $5.8 billion and that net earnings fell to $239 million from $343 million in the prior year.
Comparable-store sales fell 4.5%, thanks in large part to continued weakness in the entertainment category. The juvenile and learning categories proved to be strong performers during the quarter. Net sales for the year were $13.5 billion, compared with $13.9 billion in the prior year. Net earnings were $38 million, compared with $149 million in the prior year.
D. Scott McLain, CCIM: How Retailers Make Site Decisions
Goody’s Takes 13,000 SF at Senatobia Plaza

U.S. mall vacancies decline in first quarter: Report
U.S. regional malls performed well during the first quarter, according to research firm Reis. The vacancy rate in this sector fell for the sixth straight quarter, down 0.3 percentage points to 8.3 percent, the biggest drop in a decade. Average asking rents rose 0.4 percent from the previous quarter, to $39.46 per square foot yearly, the biggest increase since 2008. But U.S. neighborhood strip-center performance was less robust, says Reis, even though reduced openings offset anemic tenant demand. Some 10.6 percent of U.S. neighborhood strip-center space was vacant at the end of the first quarter, the firm says, off from 10.7 percent in the previous quarter. Roughly 873,000 square feet of new strip-center space opened up during the first quarter, up 0.04 percent from the fourth quarter of 2012, when 1.23 million square feet opened. Meanwhile, retailers absorbed 2.8 million square feet of neighborhood strip-center space during the first quarter — about even with fourth-quarter 2012 but off from the year-ago first quarter. First-quarter average rent grew 0.3 percent quarter on quarter, to $19.18 per square foot. The national vacancy rate for neighborhood strip centers is just half a percentage point below the 1990 all-time high of 11.1 percent that was also reached in 2011. Vacancies also remain well above their 2005 low of 6.7 percent.
Whole Foods to grow produce on store’s roof
The distance from farm to market is about to get a lot shorter. Whole Foods Market is building a 20,000-square-foot greenhouse on the roof of a store in the New York City borough of Brooklyn. There, in partnership with Gotham Greens, the grocery chain will grow pesticide-free produce for Whole Foods stores all over the city.
“Gotham Greens has been a valued local supplier of high-quality, flavorful and fresh produce to Whole Foods Market since early 2011, making this greenhouse project a natural and extremely exciting next step in our relationship,” said Christina Minardi, Whole Foods Market’s Northeast regional president, in a press release. “We’re particularly excited to partner with a local organization with roots right here in Brooklyn and a mission in line with our own, in that we both care deeply about providing local, fresh and sustainably produced food.”
The greenhouse will save trucking fuel, and an advanced irrigation system will use as much as 20 times less water than conventional farms do. The glazing and the electrical fittings are designed to be energy-efficient too. Gotham Greens operates a farm elsewhere in Brooklyn and is an “industry leader in urban and rooftop greenhouses,” according to Whole Foods.
“Talk about local! This project takes the discussion from food miles to food footsteps,” said Viraj Puri, a Gotham Greens co-founder, in a press release. “Our greenhouse will provide Whole Foods Market shoppers with access to the freshest, most delicious leafy greens, herbs and tomatoes, year-round that will be grown right above the store’s produce department. We’re thrilled with this partnership and to be part of the growing national movement of farmers and food producers committed to providing consumers with high quality, responsibly produced food.”
Forest City uses social media to find tenants
Forest City Enterprises is giving customers a virtual sneak peek at its renovation plans for Short Pump Town Center, Arlington, Va. The mall owner is also using the Popularise social-media tool to solicit community feedback about the $10 million project. “The reason we are doing it is to gain the most interaction and insight from our community, and for them to define what a better experience looks like in our shopping centers,” said Jane Lisy, Forest City’s senior vice president of marketing. Popularise enables owner-developers to introduce renovation plans and updates online and to interact with members of the community. Forest City’s Drawing Board platform went live on this week. “The social media and technology really give us the ability to connect with our customers in a way that we have never been able to do before,” said Joe Boehm, Forest City’s executive vice president of retail leasing.
The 1.2 million-square-foot property, which celebrates its 10th anniversary this fall, is currently 95 percent occupied, though half its leases expire within the next 12 months. Anchors are Dick’s Sporting Goods, Dillard’s, Macy’s and Nordstrom. The renovation is scheduled for completion early next year.
“We intend to be talking to our customers on an ongoing basis about the design decisions we’re making,” said Lisy. If architects are focused on providing additional seating, for instance, while people say what they really want is a family restroom closer to the play area, the online platform can help address that. “We are going to be talking about things that make this the best renovation to meet the needs of our customers,” she said.
Forest City says it will keep the social-media platform up for an indefinite period, depending on the amount of feedback generated.
Many resort to retail therapy, report says
“Retail therapy” is a real phenomenon, according to an survey of 1,000 Americans. Of the respondents, 64 percent of women and 40 percent of men said they shop to improve their mood. Nearly 40 percent of the women said retail therapy improves mood, versus about 20 percent of the men.
The chief item most of the women respondents said they buy when indulging in retail therapy is apparel (57.9 percent), while the largest percentage of the male respondents said they go for food (28.1 percent). The women ranked food second on the list of what they buy when seeking a mood boost, followed by shoes, accessories, and books/magazines. Electronics came in second for the men, followed by music and movies, clothes, and games and toys.
Nearly 20 percent of the respondents said that a bad day at work tends to spur them to seek retail therapy, close to 15 percent said bad news does so, and about 12 percent cited problems with a love partner. “Our survey confirms that shopping truly is ‘therapy’ for many people, and can help raise one’s spirits after a bad day,” CEO Kevin H. Johnson said in a press release.
The survey echoes findings from a study by the University of Michigan Ross School of Business that suggests that one component of retail therapy — making buying decisions — can help to restore a sense of control and reduce sadness. In a study of 45 female undergrads, 44 percent chose to buy a snack after viewing a movie clip that portrayed a bullying incident. Participants rated their emotions at the beginning and end of the experiment, at which time the “sadness scores” of the buyers were significantly lower than those of the nonbuyers.
“We think there are benefits to buying something new and showing it off,” wrote University of Michigan marketing professor Scott Rick in the report. “But when it comes to alleviating sadness, actively choosing between products is essential, even if those choices are hypothetical. Shopping is a natural, easy vehicle for choice. There are other situations that afford opportunities to choose and restore personal control, but they may be less tempting and harder to find than the mall.”
OfficeMax is testing a smaller format for small-business customers. The 8,000-square-foot unit is up and running at The Shops of Grand Avenue, in Milwaukee. The typical OfficeMax store measures 23,000 square feet. Beyond merely stocking supplies, the new store offers such services as website design and data storage. OfficeMax is undergoing a merger with Office Depot.
Nordstrom is opening two Nordstrom Rack stores, one at Belle Isle Station, in Oklahoma City, and the other at 901 Market St., in San Francisco. The 34,000-square-foot Oklahoma City store is to open this fall and the 45,500-square-foot San Francisco store in the spring of 2014.
French luxury-apparel chain Iro opened its first U.S. store last week — a 2,000-square-foot unit in New York City’s SoHo district. Iro says it aims to operate 20 U.S. stores by 2015. The company is seeking sites in Boston, Chicago, Las Vegas, Los Angeles, Miami and San Francisco. Iro operates four stores in Paris.
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Tractor Supply profit up in Q1; opening 100+ stores
Brentwood, Tenn. — Tractor Supply Co. reported Wednesday that net income for the quarter ended March 30 rose to $44 million, compared with $40.3 million in the year-ago period.
Sales increased 6.4% to $1.09 billion from $1.02 billion in the prior year’s first quarter. Same-store sales edged up 0.5%.
The company said it expects capital expenditures to range between $240 million and $250 million including spending to support 100 to 105 new store openings in 2013, as well as to support construction of a southeast DC opening later this year and a new store support center slated to open in 2014.

Pier 1 looks to have extended its positive streak: analyst
April 24, 2013, 5:24 PM
By Andria Cheng
While many other retailers’ spring and summer merchandise sales look to have been hurt by the colder weather in spring, Pier 1 Imports Inc.’s PIR +2.01% positive momentum looks to have continued, BB&T analyst Anthony Chukumba said in a report on Wednesday.
After contacting “a large number” of the company’s stores nationwide, the majority of those stores reported still “healthy” sales despite the cold weather, he said. The stores also said they are pleased with the company’s early summer seasonal merchandise sales, particularly outdoor furniture and cushions.
The analyst said he also noticed a very limited selection of seasonal items marked down by 20%, another piece of evidence that sales have managed to survive the unseasonably cold weather throughout the country.
He raised his first-quarter same-store sales estimate to a 7% increase from a 5% gain and said the new estimate could still be conservative.
Pier 1′s same-store sales last fiscal year rose 7.5%, leading to a three-year cumulative comparable sales increase of 28%, the company said earlier this month.
But there’s room for improvement.
Pier 1′s fiscal 2012 sales per square foot of $198 is still well below management’s three-year target of $225 and the historical peak of $235, he said.
Pier 1 shares closed little changed at $22.33 after a 33% gain in the past year.
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Target says 1Q profit will be short of outlook
Posted: Tuesday, April 16, 2013 7:37 am
MINNEAPOLIS — Target says its first-quarter adjusted profit will likely come in slightly below its forecast because of weaker-than-expected sales of seasonal and weather-sensitive items.
The discount retailer had predicted profit of $1.10 to $1.20 per share for the February-April period, excluding one-time items. Analysts expect earnings of 96 cents per share.
Target Corp. said Tuesday that it expects revenue at stores open at least a year, a key retail metric, will be about flat for the period.
The Minneapolis company is keeping its fiscal 2013 adjusted earnings guidance of $4.85 to $5.05 per share. Wall Street expects $4.55 per share.
Target, which has 1,808 stores, expects to report its first-quarter financial results on May 22. Its stock is down 59 cents to $67.89 before the market open.
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New CuraLase Franchise Opens in Boca Raton, Florida
CuraLase Global, Inc., located in Myrtle Beach, SC, is a franchisor of the CuraLase therapy for the treatment of pain. CuraLase Global, Inc. is opening a CuraLase franchise in Boca Raton, Florida in May, 2013. The clinic will be located at 3301 NW Boca Raton Blvd., Suite 100, Boca Raton, FL. Leslie Carmen, the managing partner of the new franchise, explained that she decided to get involved with CuraLase “after seeing my pain-stricken daughter get her life back, thanks to CuraLase. I feel a strong urge to pay it forward.”
CuraLase successfully treats the pain associated with many conditions through the use of CuraLase technology. These conditions include: back pain, cervical pain, sciatica, knee pain, fibromyalgia, migraine headaches, carpal tunnel, neuropathy, hip pain, plantar fasciitis, post-herpetic neuralgia, and shoulder/rotator cuff pain. For more information about CuraLase, go to the new website –
Enrique Alberto Wulff, MD, the physician for the new practice, is a member of the American Board of Psychiatry and Neurology. Dr. Wulff received his medical degree from Central University of Venezuela, Caracas and completed his residency at University of South Florida and Mount Sinai Medical Center in New York. He has received numerous awards throughout his career: Physicians Recognition Awards, Highest Academy Score in Residency Program, Compassionate Doctor Recognition, and more.
“We are excited about working with Dr. Wulff and the new franchise in Boca Raton and look forward to opening new franchises in other areas,” said Roger Porter, Owner and CEO of CuraLase Global, Inc. Porter plans to make CuraLase easily available to all people suffering with chronic pain.
Founded in 2006 and headquartered in Myrtle Beach, South Carolina, CuraLase has administered more than 65,000 treatments to patients from over 10 countries, establishing an international reputation for exceptional patient care. With an 87% success rate, CuraLase offers a non-invasive treatment option to individuals with pain. Carmen looks forward to “giving patients their life back, with real results in their pain reduction, and in most cases even pain elimination.” At this time, other franchise locations include Shenandoah, Texas, Melbourne, Florida, Myrtle Beach, SC and Mt. Pleasant, South Carolina.
For more information about the Boca Raton location, contact Leslie Carmen at
(561) 405-9555 or BocaClinic(at)gmail(dot)com
# # #
CuraLase Franchise Development Department
5046 Highway 17 Bypass South, Suite 200
Myrtle Beach, SC 29588
(843) 294-5273
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Shawn joined the Memphis Office of The Shopping Center Group in 2003 and became a partner in 2008 to focus on shopping center leasing and tenant representation. He has a Bachelor of Business Administration and an MBA in finance and real estate from The University of Memphis. Prior to joining The Shopping Center Group, Shawn was a Senior Project Manager for Cingular Wireless (AT&T) and was responsible for real estate development management, construction and implementation for wireless antenna and tower infrastructure for Tennessee and Mississippi. He is adjunct professor at The University of Memphis where he teaches the masters level class in real estate development and sustainability. In 2013 in will be working with Homburg Academy and University teaching on-line commercial real estate classes internationally. He holds both the CCIM and SCLS designations. Shawn engages in tenant representation, third party leasing/sales, investment sale and development consulting in the retail sector.
He is the co-founder and Chairman of the Board for the Memphis Business Academy charter schools (K-12th grade) in the Frayser area of Memphis. He is currently the 2013 vice-president of the Memphis CCIM chapter, 2013 Secretary/Treasurer of the MAAR Education foundation. He has serve on various charitable organizations boards in Memphis including Habitat For Humanity, the Binghamton Development CDC Retail Committee and Youth Visions. He is a member of Christ United Methodist Church. His wife is Price Phillips and he has two children Amanda and Matthew.
For all your retail real estate needs (tenant representation, landlord representation and property, investment & land sales) I hope that you will choose The Shopping Center Group and me to represent you and your business. We understand that representation is a privilege and that you have a choice!
The opinions expressed in this post are entirely my own. They should not be considered the opinion of The Shopping Center Group, LLC in which I am associated.

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