Shawn Massey, CCIM, SCLS

Weekly CRE and Retail Article Update – October 12th, 2012

Sorry for the day delay this week in our article round-up.  I attending the Southeast ICSC show in Atlanta.  I feel refereshed that the mood of the show was upbeat and deals were being made!

Enjoy the articles this week! 

Three Key Questions to Ask Potential Tenants


San Antonio Tenant Representation – Common Questions and Answers

How Corporate Executives Use Media During a Site Search

Land Sales Rising for First Time in Seven Years

Demand from Residential Developers, Value-Add Funds Drive Increase In Land Values

Form-based codes? A picture’s worth a thousand words

Coffee Break: Memphis office vacancy rate fell to 12.6 percent in–tNcPXY24dDdVy17PgA

Steve Lieberman: Retail in Reality [and in Real Time]

Outlet Malls Grow More Luxurious

Tax Strategies Changing for 2013

Are you in commercial real estate?

Rapper Rick Ross Opens Wingstop Near Poplar/Perkins

Eliot Spitzer Discusses the Election, Economic Policy, Tax Reform and What it Means for Real Estate*1_*1_*1_*1_*1_*1_*1_*1_*1%2Egmp_1140567%2Egde_1140567_member_173428905

CRE and Technology: Get on Board

6 Tips for CRE Signs

Expect big shift for shoppers, eBay CEO John Donahue says

Rick Ross bringing second Wingstop to Memphis

Finding Help for the Real Estate Baron in You

Greening Retail Requires a Specialized Approach

Shopping Center Today Online

Minneapolis Sears similar to Crosstown challenge

Class B retail still courting suitors

Mellow spot in East Memphis

Master the Art of Compromise In Lease Negotiations

Online shopping charms wireless generation, but stores fight back

Fred’s launches new concept

Crosstown Comeback

Clash of the Titans: Regional Mall REITs Fight for Limited Outlet Development Opportunities

“Don’t Go Messing With Our Mall”: Shopping Centers Today Interviews Sandy Sigal

Zappos’ silent founder

Shelter From the Storm

Store Opening Plans Reach Four-Year High, Report Claims

A scary sign for retailers: The pop-up Halloween stores are back from the grave

Commercial Calculations

Handheld Reality

Why Comply?

Ignoring loan covenants is a dire mistake in today’s market.

 How landlords convince smaller retailers to embrace sustainability

 Midtown Utopia

Cooper-Young neighborhood celebrates more than a century of revitalization

‘More the Merrier’

Existing businesses welcome new tenants to Overton Square

Memphis Area Transit Authority center earns Silver LEED certification

Allocating Environmental Liability – Landlord v. Tenant

Despite Slow Recovery in Commercial Real Estate, Innovation Key

New retail projects could compete with malls for tenants

Retail vacancies down – but so are rents

5 Years Of Commercial Real Estate and Twitter. Random Thoughts

Organisational Commercial Real Estate and Social Media

Can the Chipotle ‘Fast Casual’ – Uncle Maddio’s Pizza Joint

12 Keys to Becoming a Top Producer – Faster! Part 1

Uncle Maddio’s Pizza Joint Builds Successful – Before It’s News

Can these malls be saved

From the Desk of Al Taf


NRF: Holiday 2012 sales forecast to rise 4.1%

October 2, 2012 WASHINGTON — The National Retail Federation released its 2012 holiday forecast on Tuesday, which shows sales increasing 4.1% to $586.1 billion, down from last year’s 5.6% growth.

However, the NRF’s 2012 estimate tops the 10-year holiday sales growth average of 3.5%.

China, India consumer spending to triple by 2020: study

Tue Oct 2, 2012, The study by Boston Consulting Group (BCG) is based on a survey of 24,000 consumers as well as interviews with business leaders. The business strategy consultancy predicts consumers in China and India will spend a combined total of $64 trillion on goods and services in the decade leading up to 2020.

Annual spending on consumer goods will be three times the level spent in 2010, according to “The $10 Trillion Prize: Captivating the Newly Affluent in China and India”.

ICSC predicts 3% Christmas sales rise, 8.8M hirings

October 01, 2012, U.S. Christmas sales during November and December will increase 3 percent over last year’s season, according to ICSC. Shopping center sales will hit $463 billion, up from $454 billion a year ago. Issues affecting sales for better or worse are improving housing values, rising gas prices and the presidential election.

GAFO (General Merchandise, Apparel and Accessories, Furniture and Other Sales) retailers themselves are helping boost sales by hiring 8.8 million seasonal workers, up 0.4 percent from a year ago, according to ICSC Research.

Higher gasoline costs push US consumer spending up

September 28, 2012  WASHINGTON — Americans boosted their spending in August even though their income barely grew. Much of the spending increase went to pay higher gas prices, which may have forced consumers to cut back elsewhere.

 The Commerce Department said Friday that consumer spending rose 0.5 percent in August from July. It was the biggest jump since February.

Economy Still Weak, but More Feel Secure

September 27, 2012 Both economists and the Romney campaign are puzzling over the same paradox: The recovery has flagged and yet the country’s mood appears to be improving.

Despite months of disappointing-to-dismal economic reports — capped by a Commerce Department release Thursday showing the economy had expanded at an annual pace of just 1.3 percent in the second quarter, barely above stall speed — a closely watched measure of consumer confidence surged to its highest level since February.

Net Lease Properties Become a Hot Commodity Due to Low Yields on Alternative Investments

September 26, 2012  September proved to be a busy month for the single-tenant net lease sector. Within a 24-hour period on Sept. 6, Realty Income Corp., an Escondido, Calif.–based REIT specializing in net lease properties, bought American Realty Capital Trust, which owns 501 mostly net lease buildings, for approximately $2.95 billion; then Lexington Realty Trust, a New York City–based REIT, announced it was acquiring a portfolio of net lease office and industrial properties from its joint venture with Inland American for $480 million.

Apparel Stores

Mixed bag for apparel retailers and department stores in September; Gap shines

October 4, 2012 NEW YORK — Apparel retailers and department stores reported monthly revenue results for September that were mixed, as Gap Inc. and Limited Brands posted gains that beat Wall Street estimates, while Macy’s and Kohl’s missed expectations.

However, many analysts said spending was fairly strong for the month.

Discount Stores

Target to stop reporting monthly sales

OCTOBER 4, 2012 New York — Target Corp. will soon join the ranks of retailers who are no longer reporting monthly same-store sales. The discounter on Thursday said it will no longer report comparable sales, beginning in fiscal 2013.

“This decision is based on discussions with many of our investors and is consistent with the practice of the vast majority of our retail peers,” said John Mulligan, CFO, Target. “We believe aligning our sales guidance and reporting with disclosure of our quarterly financial results will create a longer-term focus and provide greater understanding of our sales results in the context of our overall financial performance.”


Drug Stores

Rite Aid opens ‘next generation’ Wellness store, reports September sales

October 4, 2012 CAMP HILL, Pa. — Rite Aid unveiled what it called its “next generation” Wellness store as the chain reported a decrease in same-store sales Thursday.

The store, in Lemoyne, Pa., is less than a mile from the 4,639-store chain’s Camp Hill, Pa., headquarters. A ribbon-cutting Thursday morning marked the store’s grand opening.

Walgreens sales drop 7.8% in September

OCTOBER 3, 2012 Deerfield, Ill. — Walgreens reported Wednesday that total sales for the month of September fell 7.8% to $5.48 billion. Front-end sales dipped 0.4% and same-store sales for the front decreased 1.5%.

Customer traffic fell off 2.3% in September, but the biggest factor in the slowed performance was the 10.3% decrease in same-store prescription sales for the month. Overall, same-store sales dropped 11.1%.

Walgreens Q4 profit falls 55%, but adjusted results top forecasts

SEPTEMBER 28, 2012 Deerfield Beach, Fla. — Walgreens’ fiscal fourth quarter net income fell 55% compared with a year ago when the drugstore operator recorded a big business sale gain. However, its adjusted earnings still beat analysts’ expectations.

Walgreen earned $353 million for the quarter ended Aug. 31, compared with $792 million a year ago. On an adjusted basis, Walgreen earned $553 million versus $599 million a year earlier. Adjusted earnings excluded acquisition-related costs and costs related to inventory.

Grocery Stores

Tesco first half profit drops on high turnaround costs

OCTOBER 3, 2012 London — British retailer Tesco reported Wednesday that profit dropped 6.8% in its first fiscal half to $2.06 billion, weighed down by costs associated with its turnaround strategy.

Revenue for the period inched up 1.6% to $51.9 billion, but costs were up as well for the world’s third-largest retailer. Same-store sales fell off 0.7%.

Albertsons Acquires First Store in Decade

Oct. 2, 2012, FULLERTON, Calif. — Albertsons here said it plans to lease a former Scolari’s location in Central California — the first time it will acquire a lease from another company in more than 10 years, a spokeswoman told SN.


The 30,000-square-foot store — in San Luis Obispo — will undergo a complete remodel in the spring and reopen under the Albertsons banner next summer, she said. The announcement of the lease comes just weeks after Albertsons’ corporate parent, Minneapolis-based Supervalu, disclosed plans to close 19 stores in Southern California by the end of November.


Darden’s restaurant growth to create 50,000 jobs in the next five fiscal years

October 2, 2012, The Orlando-based restaurant chain’s (NYSE: DRI) planned restaurant growth in the next five fiscal years is slated to create about 50,000 new jobs, said Chairman and CEO Otis in an Oct. 2 presentation at the Wells Fargo Securities Retail and Restaurants Summit that was simulcast live on the Web.

The chain has targeted about 500 new restaurants openings in that time, and each restaurant hires an average of about 100 employees, added company spokesman Rich Jeffers. The firm currently employs more than 185,000 at nearly 2,000 restaurants and at its corporate campus in southwest Orlando.

K-MAC Holdings Acquires 25 Taco Bell Restaurants

September 28th, 2012, Fort Smith, Arkansas based K-MAC Holdings Corp. has acquired No Limits, LLC, a Missouri-based Taco Bell franchisee that owns and operates 25 Taco Bell restaurants. Rafe Montgomery has owned a controlling interest in No Limits since 1999.

K-MAC is one of the largest Taco Bell franchisees in the U.S. and also operates KFC and Golden Corral restaurants. It currently operates 237 restaurants across the three different brands.  K-MAC is led by President and CEO Sam Fiori and COO Tina Reagan.  Commenting on the acquisition, CEO Fiori said, “Rafe Montgomery has built a first class organization, and we are very excited to have his business become part of the K-MAC family.”  Reagan, COO, also commented, “The No Limits restaurants are both geographically and culturally a perfect fit for K-MAC.”

Stronger Sales, Traffic Bolster Restaurant Performance Index in August – Press Releases

WASHINGTON, Sept. 28, 2012  Buoyed by stronger same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) posted a modest gain in August.  The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.6 in August, up 0.4 percent from July and the first increase in five months. August represented the tenth consecutive month that the RPI stood above 100, which signifies continued expansion in the index of key industry indicators.

Dollar Stores, Warehouse Club & Other Retailers

Costco and TJX beat estimates in September

October 4, 2012 NEW YORK — Costco Wholesale Corp. reported a better-than-expected 6% rise in September same-store sales, helped by higher gasoline prices and a stronger dollar. Excluding the impact of gasoline prices and foreign exchange, comparable September same-store sales rose 5%.

Net sales rose 8% to $9.31 billion in the five weeks ended Sept. 30. Costco, which currently operates 608 warehouses, said it plans to open up to 14 new warehouses prior to the end of calendar year 2012.

Bebe sees slowed sales in Q1; in hunt for CEO

OCTOBER 3, 2012 Brisbane, Calif. — Fashion retailer Bebe reported Wednesday that total sales for the first quarter fell 9.4% to $105.1 million. Same-store sales dropped 8.7%, missing expectations of a more moderate 6.8% decline.

The 250-store chain has officially launched a search for a new CEO, announcing on Wednesday it has retained Russell Reynolds Associates to lead the effort. Former CEO Gregory Scott resigned the post in January 2009, and founder Manny Mashouf has been serving in an interim capacity since that time.

Food Lifts Family Dollar Q4 Results

Oct. 3, 2012, MATTHEWS, N.C. — Family Dollar Stores said Wednesday that expanded selections of food and other consumables sparked sales gains for the fourth quarter and fiscal year.

Overall consumables sales increased by 16% in the fourth quarter, which ended Aug. 25, with food experiencing double-digit comparable-store sales growth, the company said. Strong sales in these categories helped to cover for weakness in discretionary categories, although gross margin as a percent of sales dipped slightly to 33.83% from 34% in the same period a year ago.

Zumiez same-store sales rise 5.6% in September

OCTOBER 2, 2012 Lynnwood, Wash. — Reporting ahead of most retailers whose results will be posted on Thursday, action sports retailer Zumiez said that same-store sales for the month of September rose 5.6%.

Total sales for the month increased 18.6% to $62.7 million, compared with $52.9 million for the same period last year.

Goodwill revenue climbs 12 percent

September 28, 2012  The compensation of local Goodwill head CEO Michael Miller has been a subject of discussion since a 2004 Department of Justice investigation determined his pay was “unreasonable.”

At the time, Miller earned $831,508. He subsequently agreed to a 24 percent pay cut. This year, it climbed another 3 percent to $743,000, as reported in a story in this week’s print edition of the paper.

Drop in Unemployment an Upside Surprise; Jobs Recovery Positive but Sluggish

October 5, 2012, The U.S. economy continues to slowly improve as the unemployment rate fell below 8 percent for the first time in four years, though employers await signs that the global economic recovery has taken root before hiring at a faster pace. Recent developments helped stabilize the financial situation in the eurozone, which should pull the trade area from the edge of recession by early next year. Additionally, the impending “fiscal cliff” has begun to stir lawmakers in the Senate, though a deal to avoid the huge tax increases and spending cuts will likely wait until after the election. Together, these forces have provided employers some impetus to hire, though sluggishly growing consumer demand will keep job growth tempered for the next several months.

The largest surprise in September’s jobs report was an unexpected 30-basis point drop in the unemployment rate to 7.8 percent. According to the household survey, 900,000 people found positions in September, the largest increase in nine years. Also, labor force participation jumped by 400,000 workers, signaling a more positive outlook among long-unemployed workers. While the household survey often displays high levels of volatility, September’s sub-8 percent unemployment rate should help boost consumers’ psyche.

Impact on Commercial Real Estate

 Individuals will continue to postpone long-term planning when considering a home purchase due to the lackluster economic recovery and need to stay relatively mobile to find employment. As a result, national apartment vacancy will tick lower in the fourth quarter, finishing the year at 4.4 percent. An improving economy and low interest rates in 2013, however, could spark additional momentum toward homeownership, putting upward pressure on national apartment vacancy.

 The manufacturing sector, which helped lead the nation out of the recession, posted a second consecutive monthly decline in September. Over the past two months, 38,000 jobs have been lost as an economic slowdown in the eurozone reduced demand for American exports. Nonetheless, local demand will help boost operations in the industrial sector, albeit modestly. At year end, the national industrial vacancy rate will fall to 11 percent, supporting asking rent gains of 1.7 percent and effective rent growth of 2 percent.

 NPD: More consumers to spend same or more this holiday versus last year

OCTOBER 11, 2012 Port Washington, N.Y. — The majority of consumers intend to spend the same (67%) this holiday season than last year, and 10% plan to spend more while fewer that say they plan to spend less, according to the NPD Group’s 11th Annual Holiday Survey.

“Looking at this year’s responses, I see a light at the end of the tunnel with more consumers telling us they plan to ‘spend about the same’ and less planning to ‘spend less’,” said Marshal Cohen, chief industry analyst, The NPD Group, Inc. “While consumer confidence seems to be up retailers will still face some challenges. They will need to develop creative ways to lure shoppers into the stores.”

 Retail container imports to increase 9.9% in October

October 9, 2012 Washington, D.C. — The Global Port Tracker report released Tuesday by the National Retail Federation and Hackett Associates found that import cargo volume at the nation’s major retail container ports is expected to increase 9.9% in October as merchants wrap up the annual shipping cycle for holiday merchandise.

“NRF’s annual forecast says retailers should see solid growth during the holiday season this year and these cargo numbers back it up,” NRF VP for supply chain and customs policy Jonathan Gold said. “Increased imports show that retailers have gauged the market and expect increased sales.”

ShopperTrak: September 2012

October 5, 2012 The end of back-to-school shopping in the U.S. led to a significant drop in foot traffic this past month. September saw a 13.1% decrease in retail foot traffic compared to August. However, this past month continued a streak of year-over-year improvements. September 2012 foot traffic increased 12.9% when compared with the same month last year.

Back-to-school time is the second-largest shopping season of the year. The promotions to buy new gear and apparel for the kids drew shoppers to stores and malls over the long Labor Day weekend. However, once the sales ended in early September, shoppers cooled down their purchasing for a bit.

Mall vacancy down, rents up

October 05, 2012, U.S. shopping centers reported some positive rent and occupancy gains in the third quarter, according to research firm Reis. Malls in the 77 biggest U.S. markets posted an average vacancy rate of 8.7 percent, down from 8.9 percent in the second quarter. Yearly mall rents rose 0.3 percent in the third quarter, to $39.24 per square foot, on average, marking the fifth consecutive quarter of increase, Reis reports. Driving much of the increase was leasing progress at class-A malls owned by the large public REITs, the firm says.

Apparel Stores

True Religion to explore sale of company

October 10, 2012 Vernon, Calif. — True Religion Apparel said Wednesday it is evaluation strategic alternatives, which could include the sale of the company.

The denim manufacturer, which also operates about 140 retail stores, said it was contacted by interested third parties, which triggered the formation of a special committee to explore alternatives.

Destination Maternity Q4 sales slip, but beat Street

October 9, 2012 Philadelphia — Destination Maternity reported Tuesday that revenue for the fourth quarter dipped less than 1% to $128.5 million, but edged Wall Street’s expected $128.4 million in revenue for the period. Same-store sales climbed 2.7%.

The retailer, whose brands include A Pea in the Pod, Motherhood Maternity and namesake stores, said the revenue dip in the fourth quarter was due largely to the closure of underperforming stores and that it expects quarterly earnings to exceed guidance.

The Gap’s September Same-Store Sales Rise a Better-than-Expected 6% (GPS)

October 4th, 2012 Apparel retailer The Gap Inc. (GPS) on Thursday posted better-than-expected September monthly sales results.

The San Francisco-based company reported overall September sales of $1.45 billion, up 8% from $1.35 billion in the same period last year.

Department Stores

Sears expects $446.5 million from offering tied to Hometown, Outlet spinoff

October 9, 2012 Hoffman Estates, Ill. — Sears Holdings Corp., which in February announced it would spin off its Hometown and Outlet businesses as a separate publicly traded entity, said Tuesday it expects to receive about $446.5 million in gross proceeds from an offering tied to the spinoffs.

The offering of rights to purchase shares of the spinoff debuted on the Nasdaq under the “SHOSR” ticker symbol in September. According to Sears, the rights offering expired on Monday; preliminary results show that more than 95% of the options were exercised.

Discount Stores

Wal-Mart targeting $9 billion in e-commerce sales

October 10, 2012 Rogers, Ark. — As part of its annual address to investors on Wednesday, Wal-Mart Stores said it expects global e-commerce sales to reach $9 billion next fiscal year.

The retailer said it has made easier to shop with a new search engine, enabled cash payment functions, and is now testing same-day delivery in four markets and a scan-and-go service for smartphones.

Grocery Stores

Safeway Q3 net up, helped by sales of Genuardi’s stores

OCTOBER 11, 2012 Pleasanton, Calif. — Safeway Inc. posted a lower profit from continuing operations for the third quarter on Thursday, but its net profit rose to $157 million from $130.2 last year, helped by the sale of some of its Genuardi’s stores. The company reported income from continuing operations of $108.0 million for the quarter ended Sept. 8, compared with $130.3 million in third quarter 2011.

 Total sales inched down 0.2% to $10.05 billion from $10.06 billion, hurt by the Genuardi’s shuttering and a lower Canadian exchange rate, partly offset by higher fuel sales. Same-store sales, excluding fuel, rose 0.1%.

Carrefour Q3 revenue up

OCTOBER 11, 2012 New York — Carrefour SA reported that its revenue edged up in its third quarter, driven by strong sales in its convenience stores and markets in Asia and Latin America.

The company said Thursday that sales rose 2.1% to €22.6 billion ($29 billion) in the July to September quarter. Recessions in Spain and Italy impacted Carrefour’s revenue in Europe, where sales were down 2.2%. Sales in Asia and Latin America increased, however, rising 12.3% and 5.2% respectively.

The Fresh Market Inc. – Aggressive Growth

October 3, 2012 The Fresh Market Inc. ( TFM ) is a specialty grocery retailer that has returned 47% so far this year. Furthermore, it appears to have enough potential for even further upside, as is evident from its robust long-term earnings growth projection of 23.1%.

Management’s focus on expanding the store base, driving comparable-store sales and improving margins are strengthening this Zacks #2 Rank (Buy) stock. This is exemplified in The Fresh Market’s second-quarter fiscal 2012 results, which included year-over-year earnings per share growth of 26.4%, a positive surprise of 3.7% and a raised guidance for the full year.


Ruby Tuesday: Ads, coupons boosted 1Q sales

October 11, 2012 Ruby Tuesday Inc. saw same-store sales increases of 1.9 percent at its company-owned Ruby Tuesday restaurants during its fiscal first quarter, the first positive sales results the company has experienced during its past seven quarters.

Chief Branding Officer and Executive Vice President Daniel P. Dillon attributed the rise in sales during the quarter ended Sept. 4 to a focus on television advertising for Ruby Tuesday, as well as a 30-percent reduction in coupon discounts.

Starbucks plans to open 1,000 U.S. stores in 5 years

October 5, 2012 Starbucks Corp. plans to add 1,000 stores in the U.S. in the next five years, CEO Howard Schultz said.

The locations, which will employ about 20 workers each, could add 20,000 jobs, Reuters reports. The company is trying to attract customers by selling juice, energy drinks and better food along with its coffee. Starbucks has more than 17,400 locations worldwide, including about 10,800 in the U.S. and 740 in the U.K.

Dollar Stores, Warehouse Club & Other Retailers

Costco Q4 profit jumps 27%

October 10, 2012 Issaquah, Wash. — Costco Wholesale Corp. reported Wednesday that net income for the quarter ended Sept. 2 jumped 27% to $609 million, from $478 million in the year-ago period. The warehouse club operator credited strong sales and higher member fees for the improved profit performance.

Sales climbed 14% to $31.52 billion, and same-store sales rose 5%. Membership fee revenue rose 18% to $694 million. The company said it plans to open up to 14 new warehouses before the end of calendar year 2012.

Family Dollar profit up 1.4%, opening 500 stores

October 3, 2012 NEW YORK  — Family Dollar Stores Inc. FDO +0.07%  said Wednesday it expects 2013 profit of $4.10 to $4.40 a share, compared to the analyst estimate of $4.22 a share in a survey by FactSet.

For the first quarter, the company forecasts earnings of 69 cents to 78 cents a share, while analysts currently expect the company to earn 77 cents a share. The Matthews, N.C., retailer expects to open 500 new stores in the coming year and close 70 to 90 stores.

Al Taf
Vice President Investments
Director, National Retail GroupDirector, National Net Lease Group

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 I hope you will check out future weekly commentary at   If you enjoy the commentary please subscribe online.



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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