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Nellie Day LAS VEGAS — While big-box real estate certainly hasn't vanished entirely, it's clear some of its biggest players are employing a variety of different “out-of-the-box” strategies to get deals done. With the popularity of online retailers and a fickle consumer base that can vary by region or even city, a number of companies are turning their attention away from the mega spaces to provide more personalized, intimate shopping experiences. “We are facing unprecedented change in the retail landscape,” said Mike LaFerle, vice president of real estate construction for Home Depot. “Customers buy when they want, and they want it quickly and they want to be guaranteed they're getting the best product and the best pricing.” His comments came on Monday, May 21 at ICSC RECon 2012 during a panel discussion on the evolution of big boxes. This sentiment further bolsters the online arena, where consumers can easily compare prices and purchase products without leaving home. Panelists, including LaFerle, Carl Muller, vice president of real estate and design of Walmart Stores, and Marci Troutman, founder and CEO of SiteMinis, were keenly aware the physical landscape was losing traction to companies that dealt primarily in the virtual arena. “Five years …

Jim Periconi and Abigail Jones Since 2007, the Bloomberg administration has been pushing New York City to be “greener and greater” through the implementation of PlaNYC. PlaNYC recognizes that in order for the city to thrive, it must accommodate a growing population, invest in and maintain its infrastructure, enhance its economic competitiveness, and improve the quality of its air and water, while reducing the city's contributions to the greenhouse gases that cause climate change as well as preparing for its effects. A significant part of PlaNYC requires more green building in the city. In New York City, energy used in buildings accounts for 75 percent of the greenhouse gas emissions and 85 percent of the water use. Green buildings use energy and water more efficiently, contain fewer toxic materials and contribute to an improved outdoor environment by increasing vegetation, combating urban overheating, and managing stormwater. As part of PlaNYC, Mayor Michael Bloomberg and City Council Speaker Quinn charged the Urban Green Council, the New York City Chapter of the U.S. Green Building Council, to establish a group of industry leaders to identify impediments to green building in the city's codes, and recommend cost-effective code enhancements or new green building code …

Carrie Smith It’s certainly no secret that Florida has experienced one of the nation’s slowest economic recoveries during the past year. According to the Bureau of Labor Statistics, the unemployment rate in Florida in March stood at 9 percent, well above the national average. Still, there are signs of recovery and indications of what the state’s consumer demand will look like as the state moves toward a “new normal.” Smart retailers and shopping center owners are quickly understanding the key traits of consumer behavior in 2012, and adjusting their offerings to match. Restaurant growth is taking off around Florida, led by chains that can leverage name recognition and the marketing support of a major brand. Many consumers seem more than happy to spend major portions of their discretionary income at restaurants despite having many other entertainment options. In the past, restaurants often looked to take over failed locations that had equipment they could recycle. But in this cycle of growth, the chains are laser-focused on top-grade locations and more than willing to spend money on new facilities. Retailer reinvention But while consumers spend money at restaurants, it appears they are less willing to open their wallets for full-priced clothing. This …

Douglas S. John While big box retailers such as Walmart, Kohl’s, Lowe’s, and The Home Depot are performing relatively well, the big box business model of providing customers with a nationwide network of large stores, a wide variety of products, and low prices may be slowing down. While some big box spaces are being re-tenanted by large-format retailers, owners are often converting stores for second-generation users such as call centers, educational facilities, medical offices and gun ranges. While these changes are ominous for property owners, the silver lining is that there is a significant opportunity to reduce their tax liability. The following key concepts, based on the income capitalization, cost, and sales comparison approaches to value, will help taxpayers and their attorneys ensure they are fairly taxed. Changing Lease Terms Erode Value Where state law requires assessors to value property using fee-simple assumptions of market rent, rather than contract rent, it is critical to explain to assessors how market conditions affect lease terms and property values. Colliers International’s white paper, “Re-Tenanting Bankrupted Big Boxes; Paving the Way for Retail’s Rebound,” outlines landlords’ challenges. To boost occupancy and retain tenants, landlords are slashing lease rates. Asking rents for replacement big box …

Savannah Duncan CHARLOTTE, N.C. — Economic conditions in the Carolinas and in Charlotte in particular are the envy of many other parts of the country, according to Sam Chandan, president of New York-based Chandan Economics and professor of real estate at the Wharton School of Business. “A combination of a high quality of life, a low cost of living and an extraordinarily well-educated workforce have combined with a high-quality transportation structure and good quality housing stock to ensure a stronger and more stable recovery than what we see in many other parts of the country.” His comments came during the InterFace Carolinas Conference, held at the Omni Hotel in Charlotte last week. The one-day event attracted more than 225 industry professionals from across the region and featured networking opportunities. Armed with a strong financial services sector, Charlotte is performing much better than other markets in North Carolina that are more dependent on public services. “Local and state governments are beginning to lose jobs as they run out of the federal dollars to fund local government as well as teachers and social service workers,” Chandan said. The unemployment rate in North Carolina reached its peak of 11.4 percent in January 2010 …

Sebastian Rodrigano The idea that Texas offers a favorable business climate is deeply rooted in the business community, but a business must monitor its property tax burden or risk paying unnecessarily high tax bills. It’s understandable that many Texas businesses downplay the impact of property taxes on their bottom line. Late last summer, a survey by Development Counselors International rated Texas as having the best business climate in the nation for the 12th consecutive year. Survey respondents cited the tax climate, pro-business environment and economic development incentives as the top reasons for favoring the state. As a 20-year Texas resident, I considered Texas’ business climate supremacy to be indisputable. When a client requested a quick check of property tax projections to evaluate locations for a new facility, however, I had trouble reconciling the data with my beliefs about the competitiveness of Texas in attracting new business. Big Taxes in Texas: Across a 20-year period, property taxes on four hypothetical commercial buildings, all valued at $200 million in the first year, would be nearly four times higher in Texas than in many other states. The client was trying to decide where to build a $200 million facility, assuming that every available …

ATLANTA — In a period of rock-bottom building prices and record-low interest rates, now is an ideal time for businesses to consider purchasing instead of leasing their real estate. That was the consensus of the panelists on the most recent episode of the “Commercial Real Estate Show,” which provided an in-depth look at the factors making owner-occupied real estate a more attractive option for businesses. Show host Michael Bull, president and founder of Atlanta-based Bull Realty, said the possibility of rent spikes is one reason to consider buying. “These prices are so low, it’s incredible,” he said. “With the lack of new construction [in recent years], I think we’re going to see some huge rents in about five years.” Banks also are enthusiastic about owner-occupied real estate, noted Brant Standridge, a state president for BB&T whose region includes North Atlanta. “It’s very, very attractive for banks,” he said. “Financing is readily available, and banks are requiring less and less equity.” Firms that own their own buildings have a valuable tool for acquiring the funds needed to grow their operations, panelists observed. “Businesses that are looking to expand, particularly small businesses, often use their real estate,” said Brent Baker, a managing …

By Mark Wayne While conditions vary from one individual market to the next, the overall state of the broader U.S. real estate marketplace remains uncertain. On the retail development momentum meter, the needle is hovering somewhere between cautious optimism and lingering uncertainty. Positive news in recent months, in the form of promising economic indicators and a labor market that seems to be showing signs of life, has begun to shake off some of the financial hangover from the U.S. credit rating downgrade and debt-ceiling debate of last year. But with a possible European debt crisis still looming, and a brutal recession not too far in our rearview mirror, real estate and development professionals are understandably leery of overextending themselves. At the same time, thought leaders and innovators throughout the industry have become increasingly interested in finding new ways to become more efficient and add value in-house. Game-changer One of the effects of that lengthy recessionary cycle is that long-term financial planning has emerged as a more relevant and pressing issue for both employers and employees alike. American families and American companies have both been forced to adapt to new financial and professional realities, in many cases restructuring or reconsidering retirement …

By Ben McLeish In leasing a retail center, the key is to fill it with tenants in a way that’s going to maximize long-term profitability. Otherwise, what’s the point? With that in mind, here are six points to consider as you work on your leasing plan for a property: 1. As you consider what you want your tenant mix to be, focus on tenants that will attract customers who visit more than once a week. The type of tenant is a major driver of overall customer traffic for a center, and odds are these customers will start visiting the center’s other retailers. This is why retailers in grocery-anchored centers do so well. Some other examples of this type of tenant include restaurants, fitness centers and educational facilities. 2. Sweat out the details when it comes to the appearance of the center. Are signs looking worn? Are all the tenants using their sign space properly? Is the parking lot well-lit and in good condition? Is the landscaping looking crisp? Are tree canopies hiding storefronts or signage? The first impression of your center is critically important. When potential tenants visit for the first time, will they be impressed? Also, make sure your …

By Karen Christy The retail market in the Carolinas is one of recovery and creative possibilities. That theme was resonated at this year’s ICSC Carolinas Show in Charlotte this week. Cities in the Carolinas that lead population growth are beginning to attract investors from more overbuilt markets in the U.S. and from larger cities where competition has driven down returns. Key cities in the Carolinas attracting retail investors include Charlotte, Raleigh-Durham, Chapel Hill and Charleston. The South Carolina retail market has experienced substantial activity following the last economic downturn, as many of the big boxes left vacant during the recession have since been filled. The vacancies left dark by national closures such as Linens ’n Things, Circuit City and Goody’s provided a unique opportunity for retailers to pursue a flight-to-quality at what would be considered a value price. Meanwhile, some big-box vacancies in less-than-stellar locations have been repurposed for alternative, non-retail uses. This activity has resulted in vacancy rates of less than 10 percent in all major markets across South Carolina. The Carolinas are high on the radar for the restaurant segment, which is active with many national retailers looking to expand. Population growth is the key driver. Raleigh’s population …