Shawn Massey, CCIM, SCLS

Weekly CRE and Retail Article Round Up – December 31st, 2012

Have a great New Year!
Dollar Stores Add Up To Big Bucks for Net Leased Investors – CoStar Group

Gift card sales to hit $110 billion this season: Report
Gift cards are still at the top of many consumers’ holiday shopping lists, according to CEB TowerGroup research. The firm expects 85 percent of the U.S. population will exchange gift cards this season, driving U.S. sales of gift cards to $110 billion.
The firm says the most popular type of gift card will be the “open loop” ones sold by American Express, Discover, Mastercard and Visa. The firm projects $40 billion worth of these cards, which can be used anywhere, to sell this holiday season. It expects consumers will spend about $19 billion on restaurant gift cards and some $36 billion on retailer gift cards. Electronic gift cards won’t be as popular as physical ones. While electronic gift card sales have increased since the firm began tracking them in 2010, sales in 2012 are projected to reach only $3 billion, reflecting slower-than-initially projected adoption.
And recipients are getting more conscientious about how they use the cards. CEB Tower Group reports that 75 percent of consumers will spend the full amount of money on the card, and 30 percent will spend $25 more than the value of the card, which is helping to lower spillage — the amount of money left on a gift card that a consumer will never spend — to $1.7 billion.
“Consumers continue to flock to gift cards as a popular gift choice due to the variety and assortment of cards available,” said CEB TowerGroup senior research director Brian Riley in a press release. “Consumers can now more easily use all the funds loaded on their gift card thanks to safeguards put in place by Title IV of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, which severely restricts expiration dates and fees.”
Gift card sales are rebounding after two years of slow growth in 2008 and 2009 due to the economic downturn, Riley says. CEB TowerGroup, which has tracked gift card sales and use since 2006, suggests that the market will top $130 billion in sales by 2015, with electronic gifting set to grow from $3 billion in sales this year to roughly $16 billion by 2015.
Inditex brings Massimo Duti brand to U.S.
Zara parent Inditex opened the first U.S. stores of its Massimo Dutti brand — in New York City and Washington — just in time for the Christmas shopping season. Massimo Dutti offers high-quality clothing and accessories at prices meant to entice the cosmopolitan professional customers of its rivals: Gap Inc. and H&M.
The three-story, nearly 30,000-square-foot New York City flagship, on a prime corner in midtown, is the chain’s largest. The Washington store measures about a third of that, which is more typical of Massimo Dutti. The company will use these as a test to help decide how many stores to open in the U.S., says retail analyst Dana Telsey, who follows the company as head of Telsey Advisory Group. The targets are likely to be such fashion-conscience markets as Boston, Chicago, Los Angeles and the San Francisco Bay Area, though whether the sites will be stand-alone stores or inside upscale malls is not known, Telsey says.

Massimo Dutti offers custom tailoring and emphasizes its collections of outerwear and wear-to-work fashions. “They feel like suiting stores,” Telsey said. “They have a fashion feel to them, and they feel European.” Dresses go for about $90 to $175, jeans sell for roughly $70 to $90, and sweaters run from about $70 to $175. Men’s jackets and blazers start at $68 and go as high as $238; trousers sell for $70 to $90.
In conjunction with the New York store opening, Massimo Dutti launched an online venue offering the full range of merchandise available in its physical stores.
Inditex has been reluctant to open a Massimo Dutti in the U.S. before now, citing Gap Inc.’s dominance. But opportunity knocks as consumers move away from khakis and toward more fashion-forward apparel, the company has told the media. “Ten years ago everyone said American Eagle Outfitters couldn’t attack the marketplace because Gap was so strong,” said C. Britt Beemer, chairman and CEO of America’s Research Group. “But I wouldn’t worry about Gap owning the category. You have to be more concerned about Target than you do about Gap for the young consumer.”

Massimo Dutti, which accounts for about 7 percent of total Inditex sales, was the most profitable of the company’s concepts this year, with an operating margin of 24 percent, versus Zara’s 19 percent. In the first half of 2012, Inditex opened 19 Massimo Dutti stores and 33 Zara stores. Today Massimo Dutti operates some 600 stores in nearly 60 countries across Europe, the Americas and Asia. All told, Inditex opened 166 stores in 39 markets worldwide.
Hong Kong’s street of gold
A surge in leasing demand drove rental values up nearly 35 percent year on year on Hong Kong’s Causeway Bay shopping street, to $2,630 per square foot, making the avenue the world’s most expensive retail street for 2012, according to Cushman & Wakefield’s Main Streets Across the World annual report. Causeway Bay overtook New York City’s Fifth Avenue, which has ruled the ranking for the past 11 years and posted $2,500 per square foot for 2012. Of the 326 prime locations in 62 countries surveyed, 147 saw rents increase year on year, with only 49 experiencing declines (or 15 percent of the total surveyed, versus 19 percent in 2011). The biggest climber among the top 10 was Paris’ Avenue des Champs-Élysées, which jumped two places into third, with average rent at $1,129 per square foot. Ginza Tokyo placed fourth, at $1,057 per square foot.
Women step into spotlight at Mall of Emirates
Majid Al Futtaim’s Mall of the Emirates, in Dubai, received ICSC’s 2012 Middle East and North Africa Community Support Award for the “It’s a Woman’s World at Mall of the Emirates” campaign. Majid Al Futtaim conceived the campaign to foster a sense of community among its shoppers, who represent some 200 nationalities and cultural backgrounds. The mall’s management team recognized five local women for contributions to society (one launched a charity to help train impoverished women as beauticians). The women were lauded through a press event and by means of a Facebook app and special offers from retailers, as well as other events in promotion of International Women’s Day (March 8). The ICSC Foundation established the Middle East and North Africa Community Support Award to encourage community support from the region’s shopping centers and shopping center development or management firms. Mall of the Emirates will receive a $5,000 donation from the foundation toward philanthropic endeavors. The mall and winners of other community-support awards will compete for the Albert Sussman International Community Support Award.
Friedland Properties, of New York City, purchased a 19,100-square-foot retail building on New York City’s Madison Avenue for $141.5 million from BNY Mellon.
Branch Properties, LLC, an Atlanta-based, private real estate investment firm, paid $24.5 million for City Walk, in Sandy Springs, Ga., and $13.2 million for the retail portion of Merchant’s Festival, in East Cobb, Ga., to Target Corp.
For the first time, professors at the Wharton School of the University of Pennsylvania will join industry leaders in teaching University of Shopping Centers courses at ICSC’s annual event on the school’s campus in Philadelphia.
The executive track will be one of three taught by Wharton professors. “Students are going to take back practical information from the most noted experts in business academia and be able to apply what they learned to their businesses immediately,” said James Maurin, SCSM, chairman of Stirling Properties and dean of the executive curriculum.
Peter Linneman, professor emeritus of real estate at the Wharton School, CEO of American Land Funds and KL Realty and founding principal of Linneman Associates, will be teaching several of the executive track courses, including “How Much Should You Allocate to Redevelopment” and “The Macro Economic Signs That Tell You To Buy, Sell, Hold or Redevelop. Linneman has been a member of the Wharton faculty for 32 years, serving as the founding chairman of Wharton’s Real Estate Department. He was also director of the Zell-Lurie Real Estate Center and founding co-editor of The Wharton Real Estate Review.
Barbara Kahn, of the Wharton School and director of the Jay H. Baker Retailing Center, will be teaching “Analysis of Consumer Behavior in An Omni-Channel World.” The class will focus on understanding the purchase process and decision-making behavior of customers and how to develop strategies that are essential to building brand loyalty.
The 2013 program will run March 4–6. This year 47 new courses have been introduced to maximize educational opportunities and match the right classes with every level of experience. Among some of the expanded courses are property and asset management, leasing, marketing, retailing, law, and finance, comprising 60 classes over three days.

German holding company Joh. A Benckiser Group, which owns a majority stake in Peet’s Coffee & Tea, bought the 610-unit, Minneapolis-based Caribou Coffee chain for $340 million.
Nordstrom will open a Nordstrom Rack off-price store in downtown Washington, at Somerset Partners’ mixed-use 1800 L Street. The 35,000-square-foot store is scheduled to open this spring in a former Borders store.
DDR Corp. plans to sell 22 acres to Ikea Property for construction of the Swedish furniture chain’s first store in Kansas. The land is adjacent to DDR’s Merriam (Kan.) Town Center, southwest of Kansas City. Construction of the 349,000-square-foot Ikea is set to begin this summer, with a targeted opening in the fall of 2014.
The Uselessness of Economic Development Incentives
Yield Investors Attracted to Valuation of Net Lease Dollar-Store Properties
Dollar Stores Add Up To Big Bucks for Net Leased Investors
New research confirms central-city comebacks
Greg Kraut on Avison Young’s Breakthrough Year
Commercial Real Estate Top 10: The Jim Cramer Hall of Fame
Started by Eric Hawthorn, Social Media Associate at Llenrock Group, LLC
The Pros and Cons of Rezoning a Property
Last Post of the Year
December 24, 2012 by Chris Clark
Top 5 Things You Need To Know About LIBOR | Shelton Business Services: Proven Executive Coaching, Objective Management Consulting and Reliable Financial Services
Once Proudly Web Only, Shopping Sites Hang Out Real Shingles
Top 10 Of 2012 Plus 5 That You May Have Missed.
by dukelong on December 23, 2012

Ok Ok Ok I know I said I would not do any end of the year lists. I have been asked by several nice people to do some sort of recap or what I think will happen next year type of thing. Well, uh no I think not. Hopefully you will find some value in the following links and possibly bookmark for future reference.
So here they are.
1. Updated: 2012 Top 57 Commercial Real Estate Blogs You Must Read!
2. New Fresh and Updated: Top 10 Most Influential Online Commercial Real Estate People.
3. Updated: 2012 Top 100 Commercial Real Estate People You Must Follow On Twitter.
4. 5 Categories of Commercial Real Estate Mobile Apps.
5. Top 12 Must Have Mobil Apps for Commercial Real Estate.
6. Motionloft. Real World Traffic Analytics For Commercial Real Estate.
7. Updated: Top 150 Commercial Real Estate People You Must Connect With On LinkedIn.
8. “It’s All About Relationships In Commercial Real Estate.” That’s Bullshit!
9. Open Letter To The CEO Of Xceligent. You think you know but you really don’t know.
10. 10 Ways Old School Commercial Real Estate Is Still Kicking Ass.
And 5 you may have missed.
1. 5 Sleaziest Things In Commercial Real Estate And What They Say About You And Commercial Real Estate.
2. Organisational Commercial Real Estate and Social Media.
3. Commercial Real Estate and PORN!
4. What Is You Better Find Out!
5. My Mom is on Facebook. Which is AWESOME for me!
My view: It’s a whole new reality for retail real estate market
Memphis area ‘underperforming’ nation, Burgundy Book says
5 shopping trends that came out of 2012 stealth
Retail Store of the Year: And the winners are
Tennesseans could vote on wine in grocery store sales this year
Microsoft to open 6 retail stores in early 2013, after adding 51 shops this year
Retail real estate brokers report that more Web shops are inquiring about renting space as they mull setting up brick-and-mortar stores

TOP RETAIL NEWS from the desk of Al Taf
Bernanke says fiscal cliff already hurting economy
December 17, 2012, WASHINGTON (AP) — The U.S. economy is already being hurt by the “fiscal cliff” standoff in Washington, Federal Reserve Chairman Ben Bernanke said Wednesday. But Bernanke said the Fed believes the crisis will be resolved without significant long-term damage.

The steep tax increases and spending cuts can be avoided with a successful budget deal, Bernanke said during a news conference after the Fed’s final meeting of the year. The Fed’s latest forecasts for stronger economic growth next year and slightly lower unemployment assume that happens. Still, Bernanke said the uncertainty surrounding the resolution is already affecting consumer and business confidence. And it has led businesses to cut back on investment.

U.S. holiday sales pick up slowly after Sandy
December 14, 2012, WASHINGTON – U.S. consumers shook off Superstorm Sandy last month and stepped up holiday shopping, helped by a steady job market and lower gasoline prices.

Retail sales rose 0.3 percent in November from October, reversing the previous month’s decline. Sales increased mostly because Americans spent more online, bought more electronics and began to replace cars and rebuild after the storm

Discount Stores

Target announces another 2013 store opening
December 17, 2012, For the third consecutive business day, Target Corp. has announced a new store opening for 2013, giving the Minneapolis-based retailer plans to open 16 new locations next year.

No. 16 will be a 140,000-square-foot store that will open in October in Pamona, Calif., which is about 30 miles east of Los Angeles, according to Monday’s announcement. The store will employ about 200 people.

S&P lowers Kohl’s outlook to negative
December 12, 2012, Standard & Poor’s Ratings Services on Wednesday lowered Kohl’s Corp. outlook to negative from stable, saying that weak sales may continue into next year.

Last month the Menomonee Falls-based department store chairn reported that revenue at stores open at least a year fell 5.6% in November. Analysts surveyed by Thomson Reuters expected a 1.9% rise in the figure.Revenue at stores open at least a year is a key gauge of a retailer’s health, because it excludes results from stores recently opened or closed.

Vitamin Shoppe to acquire Super Supplements
December 17, 2012 North Bergen, N.J. — The Vitamin Shoppe announced that it has entered into a definitive agreement to purchase the assets of Super Supplements, a specialty retailer of vitamin, mineral and supplements for approximately $50 million.

Super Supplements, headquartered in Seattle, operates 31 stores in Washington, Oregon, and Idaho. The acquisition expands the Vitamin Shoppe’s presence in the Pacific Northwest where it currently operates 17 stores.

Home Improvement & Office Products

Bed Bath & Beyond Q3 profit beats, sales disappoint
December 20, 2012 Union, N.J. — Bed Bath & Beyond Inc. reported Wednesday that profit for the quarter ended Nov. 24 rose almost 2% to $232.8 million, from $228.5 million last year, edging Wall Street expectations.

Revenue increased 15% to $2.7 billion, just missing analysts’ forecasted $2.73 billion in revenue. Same-store sales rose 1.7%. The retailer said it estimates Hurricane Sandy lowered comps by about 0.9% during the period.


Newk’s Express Cafe Sees Big Year in 2012, Growth in 2013
December 21, 2012, Newk’s Express Café, which passed 50 total restaurants and entered several new markets in 2012, had a big year.

The fast-casual restaurant is ready to compound on this growth in 2013 with plans to open 10 new locations and sign additional multiunit operators with restaurant experience. Newk’s also passed $100 million in sales for the first time in 2012.

Darden Takes New Tack With Restaurant Chains
December 19, 2012,With generic menus and cheesy décor, America’s iconic chain restaurants have lost much of their relevance since their heyday in the 1980s. But the owner of Olive Garden and Red Lobster is determined not to be left behind by posh gastro pubs and glorified fast-food chains.

Darden Restaurants Inc. is building up a next generation of restaurants to take over its growth when the classic brands max out on expansion in the U.S. These smaller, trendier chains are meant to attract Millennials, with a greater focus on bar business, live music and unique tastes.

Quick Serves End 2012 with 1 Percent Traffic Gain
December 18, 2012, A promising start to 2012 for the U.S. restaurant industry followed by not-so-promising spring and summer quarters combined for a lackluster, yet stable industry, reports The NPD Group, a global information company.

The summer (July, August, and September) of 2012 ended on a weaker note than it started, with visits flat compared to same period last year, according to NPD’s foodservice market research.

Restaurant Industry Ends Year With Lackluster Performance
December 18, 2012, CHICAGO — After a strong 2012 start, the U.S restaurant industry saw weaker spring and summer quarters compared to the same period last year. The result is a “lackluster, yet stable industry,” concluded The NPD Group Inc., a market research firm that studies the foodservice industry.

“While the restaurant industry basically recovered from last year’s traffic declines, a sluggish economy and continuing cost consciousness on the part of consumers kept the industry stable but not growing,” said Bonnie Riggs, NPD’s restaurant industry analyst.
New Look for Buffalo Wild Wings Debuts in Cincinnati
December 17, 2012, Minneapolis, MN, Buffalo Wild Wings®, Inc. today unveiled its new design prototype in Ohio, where the restaurant chain got its start 30 years ago. The opening of its restaurant in Cincinnati features the new layout and restaurant design and marks a new milestone for the company, which opened its first location in Columbus, Ohio, in 1982. The Cincinnati opening is one of nine new Buffalo Wild Wings restaurants that will be opening today.

“We are thrilled to be able to open our first restaurant with the new layout and design, which will bring the stadium experience to our Guests,” said Sally Smith, president and CEO of Buffalo Wild Wings. “Our roots are right here, so we knew this was the perfect place to launch our new design to our already passionate fan base. It’s an honor to be able to celebrate with those Guests who were with us from the beginning.”

Caribou Enters into Merger Agreement to be Acquired by Joh. A. Benckiser for $16.00 Per Share in Cash
December 17, 2012, MINNEAPOLIS, Caribou Coffee Company, Inc. (NASDAQ: CBOU), the second-largest company-owned premium coffeehouse operator in the United States based on the number of coffeehouses, and the Joh. A. Benckiser Group (JAB) announced a definitive merger agreement under which an affiliate of JAB will acquire Caribou for $16.00 per share in cash, or a total of approximately $340 million. The agreement, which has been unanimously approved by Caribou’s independent directors, represents a premium of approximately 30 percent over Caribou’s closing stock price on December 14, 2012, the last trading day prior to the announcement of the transaction.

At the close of the transaction, Caribou will continue to be operated as an independent company with its own brand, management team and growth strategy. Caribou will remain based in Minneapolis, Minnesota.

Checkers, Rally’s boost beverage sales via $1 offerings
December 17, 2012 Checkers Drive-In Restaurants Inc. has boosted beverage orders and sales by 2 percent at company restaurants by offering alternative $1 beverages and a soft-serve cone option at the pay window, according to officials.

The Tampa, Fla.-based operator and franchisor of about 488 Checkers and 290 Rally’s Hamburgers drive-thru restaurants began tests in April during which it offered 16.9-ounce bottles of water, 32-ounce cups of iced tea and cones filled with its new “Cold Creations” soft-serve ice cream for $1.
Dollar Stores, Warehouse Club & Other Retailers

Shell Considered Buying BP
December 17, 2012, THE HAGUE, Netherlands — Royal Dutch Shell plc considered buying rival BP plc, according to a German newspaper report.”I can’t imagine that there is anybody in our industry who did not look into that scenario,” Peter Voser, CEO of Shell, told the Frankfurter Allgemeine Zeitung. “At the end of the day, we are all business people.”

When the Frankfurt-based newspaper asked Voser if Shell were still interested in BP, he said he had no comment.
Survey ranks the 10 most ‘relevant’ retailers



Shawn Massey, CCIM, SCLS is a partner with The Shopping Center Group a 3rd party retail real estate advisory firm in their Memphis office, an adjunct professor in the graduate real estate program at The University of Memphis and a co-founder and Chairman of the Board for the Memphis Business Academy charter schools (K-12th grade) in the Frayser area of Memphis.
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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