1. 1
For Internal Use Only
National Retail Call Minutes
Friday, February 8, 2013
Attendees:
Scot Courtney- Indy
Crystal Kennard- Indy
Rick Scardino- Chicago
Erik Hamilton
Greg Pieratt-Carlsbad
Marc Dudzik -Carlsbad
Jim Abel-Indy
Bart Jackson-Indy
Pete Levitan-NY
Tim Willett- Pleasanton
Jessica Mauser- Pleasanton
John Nolan-Kansas City
Stephanie Skrbin- LA
Maggie Montez- Palm Desert
Brian Herbert- Boise
2. 2
Recon 2013 Prep
In process…
We will start sending out regular emails next week.
Still working with them to obtain a booth location; better potion and size.
Sponsorship information is also going out next week.
Finalizing member of the board. We have 10 candidates that have expressed interest.
Final number will be 5-6 members
Invoices will start going out shortly for each office.
Atlanta
DNP
Boise- Brian Herbert
Boise is rebounding very well. Just coming out of the ground with the last “Main on Main” hard
corner in the state, lower Idaho master-plan redevelopment. If anyone is working with any
tenants that want to expand in the west, it will be Class A retail with a couple of big box anchors.
Development will unroll next week.
Rates are jumping and a lot of the nationals are coming back into town. Starting to backfill a lot
of the vacancy. The junior box stuff has pretty much been taken.
Dave & Buster’s came in and did a few deals in their market area, taking three to four junior box
spaces that were left. The rest have been filled as well.
Investment market is really doing well. If you get an investment deal, cap rates are high 6% low
7% which in that market is really aggressive, usually an 8% cap market.
The Limited has pushed back, still on hold. They were supposed to know something by the end
of December, pushed back until February 1st . Had a lengthy conversation with their counsel
yesterday and basically it is larger than what they thought. It could morph into all of their
concepts. Started off with just being The Limited, now looking into possibly doing every
company that falls under their flag and having one company represent all of them. Hoping to
3. 3
have a response by month’s end and we are right in the mix. Three companies left. They will not
tell who.
Scot Courtney-
Thank you for the great referral. Brian referred a shopping center listing to Scot in Indianapolis
from Boise.
Brian Herbert-
Testiment to what this retail division is. Boise would have lost a really good client or at least a
$2million dollar investment sale if they did not have Scot’s team to take over the leasing.
Definitely power to grow retail team.
Calabasas
DNP
Carlsbad- Marc Dudzik
New Year has started off with a pretty good flurry of leasing activity phone calls. Seems like
market is improving a little bit. Seeing tenants who have not been out in the market for awhile
and now getting active again in San Diego.
Coco’s being one of those, who have been dormant for a long time. Seeing pretty good activity
in the different shopping center types as far as leasing activity and interest; both from local and
national retailers.
Active:
Coco’s is active and expanding.
Green Spot Salad Company
Jersey Mike’s
Rosati’s Pizza is now looking in the San Diego market.
A lot of new players coming in and looking at market.
Sales have continued to be steady. The investor outlook for San Diego is still strong although
the cap rates are lower than other markets. Some are turning away, still seems to be a ton of
money looking to invest in the San Diego market.
4. 4
Vacancy rates for San Diego have remained relatively low; still in the 5.5% range and investor
activity is pretty vibrant as well.
Does anyone have a relationship with Lowe’s? They are going to be closing some locations,
believe a couple in San Diego. Have a local broker that they have worked with on their
expansions assuming he will be doing some of the disposition, but he is not affiliated with a
national company. Think there may be an opportunity to get some business there if anyone has
a connection.
Doing a good job of getting some of these accounts on a national level and would like to see it
grow. If anyone has a relationship there, reach out to Marc.
Central Coast- DNP
Charleston- DNP
Chicago- Rick Scardino
A few clients they tenant rep have been very active; Red Robin and Nascar Car Wash.
Red Robin has picked Chicago and DC as their two markets they are going to roll out their new
Red Robin’s Burger Works- their 2,000 SF answer to the Five Guys, Smash Burger, Epic
burger; more urban oriented.
Toured with Red Robin on Tuesday, showed them a few dozen sites that should create
opportunities.
Representing Gold’s Gym Express; they now have a few dozen units open across the country
and that really seems to be their growth mode. 15,000-18,000 SF range, $10/month
membership fee. If Gold’s is in your market, you should keeping an eye on or reaching out for
infill opportunities.
Extremely busy as an office probably has something to do with the years of business and the
clients they have.
Participated in Retail Live February 7th in Chicago; first time it has been in Chicago.
Competition for ICSC.
5. 5
Over 500 attendees, a 2:00p-7:00p event. Their hook is retailers get free booths. Approximately
75 retailers there, a dozen no-shows probably due to weather forecast. Rue 21 traveled from
Pennsylvania; retailers definitely flying in to attend due to “the buzz” from their counter-parts of
the country. $195 for advance registration.
The organization stresses that the retailer decision-maker attend, by in large that was the case.
Good representation.
Commerce
DNP
Dallas
DNP
Detroit
DNP
Fort Myers/Naples
DNP
Fort Worth
DNP
Gardena
DNP
Greenville-Deanna Hemberger
DNP
6. 6
Indianapolis-Scot Courtney
Huge amount of new activity. Outstanding 4th quarter and the 1st quarter of 2013 has started off
as strong as 2007.
Seeing the activity predominantly in leasing, but the sales activity is strong.
Emerging trend in the market is on the medical front with physical therapy. Physical therapy
groups are taking the outlot/shared pad centers alongside of Starbucks and Chipotle paying the
$25-$30/SF rents.
Immediate Care are also entering going into multi-tenant, Grade A, shared pad facilities.
A group called Med Express and a physicain’s immediate care group out of Chicago are
expanding. Med Express is a corporate group. If they are not in our market yet, they are pushing
west in a hurry, coming out of Pennsylvania.
Currently pitching to represent Med Express; they currently have a national broker. They have
been in the market all week this week. Have been trying to make our case. They will cooperate
with local brokers. They have 100 locations currently- Pennsylvania, Virginia, West Virginia,
Delaware, New Jersey, and Tennessee. Pushing west rapidly and will depend on a couple of
things. They had started an expansion in New Jersey, but really put the brakes on that because
some of the medical billing regulations in the state. They have determined Indiana is not as
regulated, which will be a higher priority market for them. They have one lease executed in a
smaller market, but the focus is metro Indy right now depending on what happened this week.
The real estate and executive team are traveling all of the time right now evaluating new
markets. Take 5,000sf and will either do build –to-suits or 5,000sf as part of a shared pad.
Bart Jackson-
Scot Courtney and Bart Jackson are working on a land lease with McDonald’s at one of their
shopping centers which contains Starbucks (end-cap, no drive thru). The Landlord provided a
pretty heave exclusive before Scot and Bart took the listing and they are reaching out to
Starbucks corporate to see if there is any relief in that exclusive to get the McDonald’s deal
done. Want to know if anyone on the call has reached out to Starbucks with something similar
and can provide feedback whether positive or negative as it relates?
Brian Herbert in Boise is in the middle of the same issue with Starbucks. They have a Starbucks
under contract now…call.
Per Rick Scardino, seeing McDonald’s in Chicago pushing for double drive-thru lanes and
redoing existing units and moving units if they are unable get a second drive-thru lane in their
current location.
7. 7
Industry
DNP
Irvine
DNP
ISG- Mark Larson
DNP
Kansas City- John Nolan
Kansas City retail market is doing well. Higher end, Class A stuff is what they are seeing.
Big deal in the market, a Scheel’s All Sports store is set to open in 2015, in their higher end
demographic, professional area.
Also getting an REI, Container Store, and a concept called Rock & Brews, a concept that Gene
Simmons is behind.
Seeing a lot of good quality, Class A stuff chase their high income zip codes.
Beyond that, seeing a lot of growth. Starbucks is real active.
Recommends everyone take a look at Freddy’s Frozen Custard, started out of Wichita. Has
seem them sign franchise agreements out of Dallas, Phoenix, and California.
Hamburger/French fry concept selling custard; seem to be putting up phenomenal numbers.
Gas station/C-Stores are doing a lot of deals, such as Quick Trip and Casey’s- they are out
spending money buying . Continue to see a bunch in the grocery store segment, specifically the
stores that are considered below the full service grocery stores, 20,000 sf.
They have Fresh Market opening and Sprouts.
Whole Foods is relocating some.
Trader Joe’s entered the market with two stores and have done well. The word is they are back
out.
Signed two new Sam’s Clubs, surprised their market was able to handle those.
Word is another Costco is on the horizon.
8. 8
Missing the big box deals that could get power center going and those deals seem to be moving
forward.
Have taken the vacancy off the market and the developers are getting very active.
Bringing on a new retail broker with great ties to some of their large area developers.
The owners of Spin Pizza are personal friends of John Nolan. If that franchisee doesn’t already
have a broker, John can certainly assist. They will do well, same group that started Bagel &
Bagel, which is now Einstein Bagels.
Las Vegas
DNP
Little Falls
DNP
Long Beach
DNP
Los Angeles-ISG- Matthew Sullivan/Mark Larson
DNP
Madison- Chris Etmanczyk
DNP
Murietta
DNP- Covered somewhat by Riverside office
New York-Pete Levitan
9. 9
Whole Foods has been pretty active. They have opened deals on the upper east side of Third
Avenue, Williamsburg, Brooklyn, and 125th Street in Harlem.
Seeing Fifth Avenue corridor move a little south into the lower 40’s and even upper 30’s with
deals with Tommy Bahama, Golf Smith, and Joe Fresh.
Joe Fresh could be great company to go after. It is a Canadian based company; has been
opening stores in Manhattan, New Jersey, and Long Island. They do probably about $1 billion in
sales.
Madison Avenue has seen very serious activity. They have seen around over 60 deals in the
past 18 months in the lower 60’s with rents closing well over $1,000/sf. The most recent deal
was Alexander McQueen paid $1,300/sf for 3,300sf at 737 Madison Avenue.
A lot of stores already on Madison are either doing make-overs or expanding, like DKNY, Etro,
and Gucci.
Certain companies become more focused overseas, Madison is still very globally significant. No
longer just for women’s luxury stores, a lot of contemporary brands and men’s stores have been
coming in. In a lot of ways it is starting to mesh personalities with Soho. Contemporary stores
like Helmut Lang, Vince Rag & Bones, Belstaff, whereas Soho has been seeing more upscale
uses as Proenza Schouler, Tiffany’s, Stewart Weitzman, and Ghurka.
Williamsburg in Brooklyn is on fire right now. Rents have been over $200/sf on Bedford Avenue
close to the L train. Buildings are selling for over $1,000/sf. The momentum has been very
surprising considering not many nationals have opened yet nonetheless signed leases.
So far Whole Foods, Urban Outfitters, Soul Cycle, and Joe Fresh have signed leases, but
seeing a ton of activity from nationals with proposals in, bidding wars, or leases out. That market
is going to explode for 2013.
They personally have leases out with Gant Rugger, Michael Bastian, Mumbai Burger (sp?),
Parm.
Have a very significant 8,000 sf user that is going to change the neighborhood, paying about
$185/sf a lot of these rents have been unprecedented to the neighborhood. A lot of companies
like the neighborhood because Manhattan to some extent is losing its character in certain
corridors and feel that Williamsburg is becoming a statement. It is a cool place to be.
Does anyone have any connection with the company Ulta? Not in New York but expanding
throughout the country.
Stephanie Skrbin in LA is working on a couple of deals with their real estate rep. She can assist.
10. 10
Newport Beach- Ken Gould
DNP
Oakland/Pleasanton- Tim Willett
Have downtown and three major market cities where deals are done directly with the Landlords.
Have really strong net leased investment market.
On a large scale, a number of larger retail centers change hands. The Paragon outlets were
purchased immediately and a couple of other regional centers were purchased as investment
properties.
Locally things are happening slower than they would like to see with the larger spaces.
Class A is doing really well. Just a big segment between Class A and anything else; they call
the subpar market. Tenants are moving out of what used to be considered Class A and moving
into the new construction that they recently had and delivered.
Seeing gaps in things prior that were Class A , now Class B. Anything older than 10 years old
really does not have any traction right now.
Have a lot of developers looking for infill opportunities with very little product out there or assets
to take over to do infill or redevelopment. Will be interesting to see how new developers bring
new products to the market.
San Francisco Proper is doing real well right now.
Union Square area keeps happing for the subleases and pop-up locations anywhere from
10,000-30,000sf come onto the market.
Silicon Valley is on fire. Their vacancy rate is less than 2% right now. If you are anywhere near
the large campuses, the retail vacancy is absolutely nothing.
Overall the Bay area is faring well right now.
Hearing rumors that Fresh & Easy is going to be pulling out of all of their locations in their
particular area. Haven’t seen anything happen yet. 5-6 locations are struggling that are placed
right next to Trader Joe’s and other strong grocery centers and they are not doing well
whatsoever.
11. 11
Stephanie Skrbin-
They are going to pull out of all of their stores. They are working with a merger and acquisition
company out of New York and they are looking at what the best scenario is whether they sell off
to a venture capital firm who can turn the company around or whether they close all of the
stores, sell it off to one or two companies in particular. Aldi has said they want to enter. They
have been looking sites in their market for the last couple of months. They would be somebody
who would be a perfect fit to outright buy all of those stores and just sell off the ones that don’t
meet their demographic criteria. They are working with that firm to run the analysis to see what
the best scenario is for them.
That will probably be the biggest vacancy in the next year. Right now there is no big box space
and their overall vacancy is about 6% as a flat against everybody. There are a couple of
communities that are less than 3%.
Recommended in starting a Retail Blog. Scot, Lori, and Jessica will discuss .
Ontario- Carol Plowman
DNP
Orange
DNP
Oxnard
DNP
Palmdale-
DNP
12. 12
Palm Desert- Maggie Montez
Experiencing the same; a new kind of momentum both from nationals and local tenants.
Have added a member to assist with investment sales and have another retail broker starting in
the office on Monday.
Had deals done with Whole Foods, Nordstom Rack, Sports Authority doing another store
Working with Fresh Market and Aldi in southern California for stores they want to open for 2015
Phoenix
DNP
Pleasanton
See Oakland/Pleasanton
Reno
DNP
Riverside
DNP
San Diego-UTC
DNP
Santa Monica
See West LA
Sherman Oaks- Stephanie Skrbin
13. 13
St. Louis
DNP
Stockton-Chris Sill
DNP
West LA- Stephanie Skrbin
New tenants, before it was a lot of burger concepts doing deals in the market, now seeing quick
serve pizza concepts popping up, where they are offering pizza in the format where you go
down the line, pick your toppings, and your pizza is ready in 3-5 minutes. Some of those
concepts are:
800 Degrees
Lay’s Pizza
Pieology
PizzaRev
Pizza Studio
Spin Pizza
Banks are still doing a lot of deals, Chase was pretty active, putting stores every couple blocks,
but are actually on hold (they haven’t announced it). They have not approved any new deals in
the last couple of months.
Stephanie has to pitch a listing. They have had bad experiences with brokers in the past, and
they are looking for someone to come in and pitch to them from a consulting perspective; have
reached out to the NY office, but if anyone has any kind of proposal that they have used to pitch
consulting services, please contact Stephanie.
