Shawn Massey, CCIM, SCLS

Weekly CRE and Retail Article Updates – October 24th, 2012

I apologize for delay.  I hope you enjoy.

Exclusive Use Rights – Say What You Mean; Mean What You Say!

New York’s Real Estate Icons

Three keys to street appeal

University of Chicago Works on Its Neighborhood

Making Eco-Friendly Retail Spaces

New ULI Report ‘Housing In America: The Baby Boomers Turn 65′ Explores Opportunities, Challenges In Housing The Nation’s Older Citizens

When pitching your CRE investement deal how do you get an investor’s attention?

Survival of the Fittest Starts to Play Out in Office Supplies Sector

More Shoppers Buy Groceries in Dollar Stores, Report Finds

Site Selection Article: TVA Rural Development Advantage for Valley Communities

Here’s Why Warren Buffet Likes Real Estate Investments

10 Top Ways to Market in Your Real Estate Investing Business

The Art of Closing the Deal

Seminar To Tackle Commercial Conditions

By Sarah Baker,web,website,site,design,johor,malaysia,joomla&utm_content=Webdesign,Malaysia,Johor&utm_source=twitterfeed&utm_medium=linkedin&

Never Say No to Networking

From the Desk of Garrick Brown

Terranomics Retail Newsline
Week Ending October 21, 2012

A heavy retail news week this week, but the most important retail story wasn’t a retail story at all. Housing starts jumped to their highest level in four years. Meanwhile, permits jumped to their highest level since before the recession. This is critical because this supports the likelihood that current levels of new home construction are sustainable, at least for now, and that this increase in development will last for at least a few months. Ironically, what I believe to be the second most important bit of business news this week also only indirectly impacts retail. The Washington Post reported this week that 15 CEOs of some of the largest Wall Street firms sent a letter to President Obama and Congress warning that the fiscal cliff could trigger a recession in 2013. In case you have not read about it, the fiscal cliff is a combination of austerity cuts and tax breaks that will simultaneously go away on January 1, 2103. Now, the damage won’t be immediate, but the combination of these two things at once will remove nearly $600 billion from the economy next year. Saying that the fiscal cliff “could trigger” a recession reminds me of a scene from the Monty Python film, “The Meaning of Life.” After a dinner party is visited by the Grim Reaper, one tuxedoed guest turns to the other and says, “Well, that’s cast rather a gloom over the evening, hasn’t it?” In other words, it is a considerable understatement. If nothing is done to either reinstate some of the tax cuts that will go away, or to reduce the level of federal spending cuts, we will almost certainly veer into recession this year. Nothing, of course, is going to be done about this before the election but this is the next big political story that will dominate the news.

All that being said, I do have an outlook as to how all these factors will play out next year and the news is not all grim. I’m keeping this week’s comments on the short side as I am in the midst of finalizing our new forecast report that we will be releasing in the next few days (this report will include my prognostications on where retail is going, how the fiscal cliff will likely play out and what to expect from the economy as a whole next year). In the meantime, I am off to Washington DC to attend NAIOP’s annual Development conference. I will be tweeting about events there over the next few days—click on the above box to receive my updates.

In the meantime, here is a link to one of the commercial real estate industry’s must-read publications… last week the Urban Land Institute released its 2013 Emerging Trends in Real Estate Report (click on link to download). Right or wrong (and it is mostly right) it is one of the most influential and most compelling reports produced in the industry today.

– Garrick H. Brown

Garrick Brown
Research Director, Terranomics
Terranomics Top FiveHousing Starts Jump to Four-Year High
Seattle Times 10.21

Fiscal cliff” could trigger recession, 15 CEOs warn
Washington Post 10.18

Emerging Trends Report: “Recovery Anchored in Uncertainty” in 2013
National Real Estate Investor 10.17

U.S. Retail Sales Increase for Third Straight Month
Costar 10.17

October retail sales expected to increase despite flat week
Dow Jones Newswire 10.16

The Big PictureSurvey: Dollar stores put increased competition on supermarkets
Chain Store Age 10.19

Supermarkets facing competition as grocery leader
Retailing Today 10.19

Holiday Sales Growth Could Lift Retail Store Openings 10.18

Retail Development Picks Up Steam, Defying Low Expectations
Retail Traffic 10.18

‘Showrooming’ remains a problem for retailers
Retailing Today 10.18

NRF survey details holiday spending plans
Chain Store Age 10.17

Deal velocity slows for single-tenant property sales
Costar 10.17

Restaurants to mitigate health care costs by cutting hours
Nation’s Restaurant News 10.17

When Retail Won’t Work: Alternative Uses for Converting Former Ghost Malls Back Into Income-Producing Property
Costar 10.17

Study: Out-of-stocks and dirty stores impact grocery shopping experience
Chain Store Age 10.17

iPhone sales helped drive US retail sales in Sept. 10.15

Deloitte: Consumer spending index rose in September
Chain Store Age 10.15

Big Box Retailers Most Frequented in U.S.
Progressive Grocer 10.15

Auto demand probably aided U.S. retail sales
Detroit Free Press 10.14
Retailer RoundupFred’s opening two new Super Dollar stores
Memphis Business Journal 10.15

Grocery Grab BagKroger poised for growth in 2013
Chain Store Age 10.16

The Restaurant ReviewMuscle Maker Grill Flexes Its Muscles with MO Expansion
QSR 10.17

Bankruptcy/Closure WatchBack Yard Burgers Inc. files Chapter 11 bankruptcy protection
Memphis Business Journal 10.17

M&A ManiaApple American to acquire 99 Applebee’s units for $94.8M
Nation’s Restaurant News 10.18

Murphy Oil to split off its retail division
Chain Store Age 10.17

REIT/Investment OutlookHarbor Group Expands NYC Portfolio With Two Retail Buys
Globe Street 10.18

Investors Stocking Up on Grocery-Anchored Centers Again
Costar 10.18

Deal puts $1 billion price tag on Chicago mall
ICSC Smartbrief 10.15

Connecting Tenants With Space Keeps Acker Robison Thriving

Schmitt’s Career Fueled By Outside-the-Box Thinking

Capital Influx

Industrial sector sees notable uptick in institutional buyers


Convenience’s Share of Grocery Sales Holding Steady

Oct 22, 2012, FORT LEE, N.J. — Convenience stores and drug stores are still attracting around the same percentage of grocery-shopping consumers, but dollar stores are increasingly luring customers away from other outlets, according to Perception Research Services International’s (PRS) second annual shopper research survey focused on grocery sales and shopping trends.

 Supermarkets remained the primary channel where consumers purchased groceries during the last three months, with 91 percent of consumers doing so, from 92 percent one year ago, according to PRS. Mass merchandisers, where 73 percent of consumers purchase groceries (down from 76 percent in 2011) remain their largest competitors.

Department Stores

Stein Mart opening seven stores

OCTOBER 25, 2012 Jacksonville, Fla. — Stein Mart is expanding with the opening of seven stores this fall. The new stores are located in Surprise, Ariz.; Katy, Texas; Tucson, Ariz.; and Charlottesville, Va. The McAllen, Texas; Biloxi, Miss.; and San Dimas, Calif., stores are a relocation of another area store to improve sites.

The four new and three relocated stores bring Stein Mart’s total store count to 263 at the end of this year.

Ross to open urban store in mixed-use center

OCTOBER 22, 2012 Peoria, Ill. — Cullinan Properties Group, developer of the East Peoria (Ill.) Downtown development, said Friday that Ross Dress for Less will open a 25,000-sq.-ft. junior-anchor store at the mixed-use project, joining previously announced Target, Costco, Ulta and Gordman’s.

 Red Robin Gourmet Burger will open a 4,001-sq.-ft. restaurant and dental chain Heartland Dental Care will open in a 2,700-sq.-ft. space.

Electronics Stores

RadioShack loss widens as market challenges continue

October 23, 2012 FORT WORTH, Texas — RadioShack reported that total sales for its third quarter were $1 billion, compared with $1.03 billion last year. Comparable-store sales were down 1.6%.

The retailer reported a net loss of $47 million, or 47 cents per diluted share, compared with net income of $0.3 million last year.

Home Improvement & Office Products

IKEA Sees Revenue Growing Up to 85% by 2020

October 23, 2012, STOCKHOLM—IKEA, the Swedish furniture giant, expects to increase revenue as much as 85% by 2020, as well as more than double the number of people who walk through its doors on an annual basis.

IKEA said it plans to generate between €45 billion and €50 billion ($58.8 billion to $65.3 billion) in annual revenue, up from an estimated €26.9 billion in the most recent fiscal year ended Aug. 31. Over the same period, it says, its store count will increase to around 500 from about 300 now.

Tuesday Morning revenues up slightly, loss widens

October 22, 2012 DALLAS — Tuesday Morning reported that net revenue for its first quarter increased 1.3% to $172.8 million from $170.7 million in the first quarter of fiscal 2012.

Comparable-stores sales increased by 1.7% compared with the first quarter of fiscal 2012 and were comprised of a 4.7% increase in average ticket and a 3% decrease in traffic. The company reported that net loss was $7 million or a 17 cents loss per share compared to a net loss of $5.7 million or a 13 cents loss per share in the first quarter of fiscal 2012.


Dunkin’ Brands: Beverages, new flavors boost 3Q sales

October 25, 2012 Despite the continuing global economic headwinds and fierce competitive landscape, Dunkin’ Brands Group Inc. posted significantly higher earnings and an increase in revenues for its third quarter.

For the three months ended Sept. 29, the quick-service company said net income jumped to $29.5 million, up from $7.4 million in the three-month period a year ago. Per share earnings for the quarter were 26 cents compared with a loss of $1.01 last year — the result of an accounting adjustment tied to its initial public offering last July. Revenue for the third quarter rose by 5 percent to $171.7 million, from $163.5 million, as a result of improved systemwide sales, higher royalty income and additional company-owned outlets, Dunkin’ Brands said.

Panera: Marketing, menu drive 3Q sales, profit

October 24, 2012 Panera Bread Co. said Wednesday that its strong third-quarter performance, which included double-digit growth in revenue and earnings, as well as a 5.8-percent jump in same-store sales, to a focus on new marketing initiatives, catering and seasonal menu development.

For the quarter ended Sept. 25, net income increased 27 percent to $36.5 million, or $1.24 per share, compared with earnings of $28.8 million, or 97 cents per share, in the same quarter a year ago. Latest-quarter revenue totaled $529.3 million, an increase of 17 percent from revenue of $453.1 a year earlier.

Commodity inflation curbs 3Q income for Buffalo Wild Wings

October 24, 2012 Another period of high commodity inflation contracted third-quarter earnings for Buffalo Wild Wings, but company officials said Tuesday that the brand would continue to test and execute several initiatives to protect margins and combat a slight slowdown in traffic that has appeared in October.

Net income for the Sept. 23-ended third quarter decreased 5 percent, despite same-store sales growth in the mid-single digits, and much of that downward pressure came from higher costs of chicken wings, chief financial officer Mary Twinem said during a call with analysts. Chicken wings averaged $1.97 per pound during the quarter — a 70-percent increase over $1.16 a year earlier. Lower commodity yields resulting from larger birds drove the chain’s cost of goods sold even higher, Twinem added.

Burger King Worldwide Refranchises 42 Restaurants in the Atlanta-Metro Area to GPS Hospitality

October 23, 2012, MIAMI– Burger King Worldwide (NYSE: BKW) today announced the refranchising of 42 company-owned BURGER KING® restaurants in the metro-Atlanta area to GPS Hospitality which is operated by Tom Garrett, former president and CEO of Arby’s Restaurant Group, Inc.

“We are excited that Tom Garrett has joined the BURGER KING® family and become our newest franchisee,” said Linda Chadwick, southeast division vice president of Burger King Worldwide. “We believe he will be an ambassador for our brand for many years to come.” Additionally, the company will remodel 29 BURGER KING® restaurants over the next three years.

Max & Erma’s is Investing Several Million Dollars in Its Pittsburgh-area Max & Erma’s Restaurants

October 23, 2012, Max & Erma’s, as part of its 40th anniversary celebration, is investing several million dollars in its Pittsburgh-area Max & Erma’s restaurants. As part of its local revitalization program, Max & Erma’s completed its first remodel at the Monroeville restaurant in early summer. The Robinson Max & Erma’s, located at 130 Andrew Dr., reopens today with an all-new look.

 According to Steve Weis, Max & Erma’s president, Pittsburgh has played an important role in the restaurant’s history and success. “This city has always supported Max & Erma’s in a big way,” he said. “In return, we made Pittsburgh a top priority in our revitalization program.” To continue the resurgence, Max & Erma’s is searching for a new downtown location. The lease on its current restaurant at 630 Stanwix St. expired, and it is scheduled to close before the end of the year.

Chipotle stock drops after 3Q profit, sales miss

October 19, 2012 Chipotle Mexican Grill reported on Thursday a nearly 20-percent increase in profit for the third quarter, despite increasing signs that consumers are cutting back.

For the quarter ended Sept. 30, Chipotle reported net income of $72.3 million, or $2.27 per share, an increase of 19.6 percent over earnings of $60.4 million, or $1.90 per share, in the prior year.

 Dollar Stores, Warehouse Club & Other Retailers

Cabela’s income up 28%; to accelerate expansion of smaller-store format

OCTOBER 25, 2012 Sidney, Neb. – Cabela’s Inc. said Thursday that its net income rose 28% in the third quarter, in line with expectations, as the outdoor sporting goods retailer’s smaller store format outperformed its larger, standard format.

Sterling buying Ultra Stores chain for $57M

OCT 24, 2012, Hamilton, Bermuda–Signet Jewelers Ltd. announced early Wednesday that it is buying Ultra Stores Inc., operator of the Ultra Diamonds outlet stores as well as the jewelry departments in a number of off-price department stores, for $57 million in cash.

Signet Jewelers, parent company of the U.S.’s largest specialty jeweler Sterling Jewelers Inc., is purchasing Ultra Stores from Boston-based Crystal Financial LLC and its stockholders. Crystal is a commercial finance company that originates, underwrites and manages secured debt.

Tractor Supply delivers EPS growth in

October 24, 2012 BRENTWOOD, Tenn. — Tractor Supply Company reported that net sales for the third quarter increased 9% to $1.07 billion from $977.8 million in the prior year’s third quarter. Same-store sales increased 2.9% compared with a very strong 11.5% increase in the prior-year period.  The same-store sales increase was driven primarily by continued strong results in key consumable, usable and edible products, principally animal- and pet-related merchandise.

 Net income for the quarter was $50 million, or 69 cents per diluted share, compared with net income of $42.7 million, or 58 cents per diluted share, in the third quarter of the prior year.

Coach exceeds profit expectations for Q1

OCTOBER 23, 2012 New York — Coach Inc. reported Tuesday that profit for the quarter ended Sept. 29 rose 3% to $221.4 million, compared with $215 million for the same period last year and beating Wall Street expectations.

Sales surged 11% to $1.16 billion, in line with forecasts, and same-store sales in North America rose 11%, bolstering the luxury retailer’s results for the quarter. In China, same-store sales also rose by double-digits.

Survey: Dollar stores put increased competition on supermarkets

OCTOBER 19, 2012 Fort Lee, N.J. — Supermarkets are facing increased competition from dollar stores, according to a new survey from Perception Research Services International.

Supermarkets continue to be the primary channel where consumers purchase groceries but are continuing to face challenges from other retail formats. PRS’ survey results indicate that supermarkets are still where most shoppers (91%) have purchased groceries in the past three months (in line with last year’s 92%), and mass merchandisers are still their largest competitive threat (73% purchase groceries there – down from 76% in 2011).

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Al Taf
Vice President Investments
Director, National Retail GroupDirector, National Net Lease Group Stores Gaining Grocery MomentumChannel switching trend means retailers must know, capitalize on competitive strengths   


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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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