Features

Tom Mullaney As e-commerce websites become more user-friendly and technology continues to provide consumers with new ways — from tablets to smartphones to laptops — to access the Internet at a moment’s notice from just about anywhere, online shopping is more popular now than ever. While many bricks-and-mortar stores are laboring to maintain sales in the face of a struggling economy, online retailers, which now represent nearly 10 percent of all sales in the country, are posting annual gains in the double digits. What is the secret to flourishing in the face of this shifting landscape? How can established retail outlets avoid losing sales to online competitors? What, exactly, does the 21st century consumer demand from his or her shopping experience, and how can a store meet and surpass those expectations in order to grow their numbers and change with the times? When approached correctly, the Internet can be a bricks-and-mortar store’s valued ally, but if online sales are ignored or neglected, the company as a whole can suffer irreparable damage. One need look only as far as Tower Records, Borders and Circuit City to see the potentially fatal impact of relentlessly growing e-commerce. To many retailers, this feels like …

Matt Valley U.S. labor market trends are following a “stunted Goldilocks pattern” — neither too strong nor too weak — which means it is unlikely the Federal Reserve will offer more support through monetary policy, says Victor Calanog, head of research and economics for New York-based Reis. Nonfarm payroll employment rose by 163,000 in July, the Bureau of Labor Statistics reported last Friday, easily surpassing expectations of 95,000. The private sector generated 172,000 jobs while government jobs declined by 9,000. “July's jobs figure is an overwhelmingly positive development,” says Calanog. “The only ones who will be disappointed at this minor surge in hiring are those banking on a weakening economy that would prod the Federal Reserve to consider more [quantitative] easing when it meets in September.” (Quantitative easing occurs when the Fed buys assets from banks in an effort to drive down yields and interest rates.) Even so, it's hardly time to take a victory lap, points out Calanog. If the economy continues adding jobs at the current pace, it won't be until early 2015 that it recovers the remainder of the 8.4 million jobs lost during the downturn. U.S. commercial real estate valuations should continue to benefit from investor …

John Nelson ATLANTA —The message from a panel at the ICSC Next Generation Conference in Atlanta last week was overwhelmingly clear: A federal retail sales tax for online retailers would level the playing field for bricks-and-mortar retailers who claim they are at a competitive disadvantage. Currently, online retailers do not equally share the burden shouldered by bricks-and-mortar retailers to collect and remit state sales tax.An online retailer is required by law to collect sales tax from a consumer only when the consumer resides in a state in which the online retailer has a physical presence, such as a retail store or distribution center. That compliance requirement stems from the U.S. Supreme Court’s ruling in 1992 in Quill Corp. v. North Dakota. The ruling was handed down by the nation’s highest court before online banking was even established. Panelists at ICSC conference agreed that the measure is outdated. To address the disadvantage, two pieces of legislation have been proposed to Congress to implement the tax for online retailers: S.1832 (the Marketplace Fairness Act) and H.R. 3179 (the Marketplace Equity Act). The panelists urged the audience to write to their congressman to support the legislation. The proposed measures are gaining momentum. Seattle-based …

Liz Burlingame Newcomers to the shopping center industry have faced a difficult road to success amid a slowly recovering economy. Even so, many young professionals have been determined to stay in the business. They've even embraced the downturn as an opportunity to adapt and grow. At industry education programs aimed at young talent, they're also finding support from colleagues, business partners and even their competitors. ICSC's Next Generation, a program created in 2001, gives young professionals a chance to network with retail real estate industry peers and veterans. The program has held more than 700 events since its inception, drawing more than 50,000 people. Organizers say it can offer young people a chance to gain vital contacts and learn the ins and outs of the industry as they launch their careers. At a recent Next Generation event in Atlanta, REBusinessOnline spoke with Brad Hutensky, president and principal of Hutensky Capital Partners and the ICSC chairman for 2012-13. Hutensky joined the Hutensky Group, a Hutensky Capital Partners affiliate, in 1989. The latter is a real estate fund management group, which was founded by his father, and invests solely in retail assets. During the event, Hutensky shared his thoughts on the opportunities …

Savannah Duncan Though bank failures spiked from two in May to seven in June, the pace has declined overall on a year-over-year basis, according to Trepp LLC. In the first half of 2012, 31 banks closed, compared to 48 this time last year. The pace of closures in the first half of the year was 5.5 banks per month, compared to 7.7 banks in the first half of 2011. “Assuming that economic and real estate market conditions continue to improve, bank failures have reached their peak for this cycle and are declining,” says Matthew Anderson, managing director of New York City-based Trepp. Of the seven banks that failed in June, five were located in the Southeast, including Tennessee, Georgia, Florida, North Carolina and South Carolina. Additionally, two banks stalled in Georgia in late July after the Trepp report was released. The closures bring the total number of bank failures in Georgia to 82. One bank also failed in both Illinois, which ranks third for failures with 50 closures, and Oklahoma, which has only had five total closures. Commercial real estate loans continue to be the problem for troubled banks, comprising $141.6 million, or 76.4 percent, of the total $185.3 million …

Tom McGarity Bigger isn't always better — at least that's what we are seeing when it comes to overall square footage in office space these days. When we look at trends and numbers, for the most part, the days of big corner offices, large workstations and considerable paper file storage space are quickly going by the wayside. Here in the Midwest, we have witnessed a significant compression of office space in the last 10 to 15 years. Where companies once allocated 250 square feet of space per employee, some have now dropped below 175 square feet per employee. For example, it is not unusual for companies to lease or buy commercial buildings where they can house 500 employees in 100,000 square feet of space. In years past, they easily would have needed 125,000 square feet or more. Some larger users located in Columbus recently shared they have had a 20 percent reduction in work surface per employee since 2000. So, why the compression of space? There seem to be a number of factors. First, not surprisingly, the issue of economics. Less space means less of everything: furniture, carpeting, storage and areas that require conditioning. Of course, putting more employees in …

Carolyn Oppenheimer In this difficult retail economy, a shopping center owner can’t simply assume that the tenants will do enough to generate the customer traffic needed for long-term success. Certainly, national restaurant and retail chains often have substantial marketing and advertising budgets that can be of tremendous help. It’s no secret that stores and restaurants surrounding major traffic generators benefit from their efforts. But many retail centers have a mix of everything from mom and pop stores to startups to small chains that don’t have large advertising budgets. So what can a shopping center owner do to supplement the tenants’ efforts and not break the bank in the process? Here are six things to think about that could help: 1) Realize that marketing dollars will go further in a small town than in a big city, and adjust your planning accordingly. Advertising in small-town newspapers and on the radio costs a fraction of what it costs to get similar exposure in a large city. With that in mind, think about a highly targeted approach in metro areas, perhaps focusing on a tight radius around the center and considering channels that directly target shoppers that fit a very narrow — but …

Stewart Mandell, Esq. We’ve all heard the old saw: “Denial ain’t just a river in Egypt.” Yet with property taxation, it is no laughing matter when assessors are in denial about the substantial decline in property values both during and even following the Great Recession. Fortunately, tax attorneys who presented appropriate evidence have succeeded in many recent cases. A 2011 Michigan Tax Tribunal decision involving a grocery-anchored retail building is particularly telling. The tribunal reduced each assessment about 85 percent because the vacant building was worthless on each of the Dec. 31 valuation dates in 2007, 2008 and 2009. The evidence the owner’s tax appeal counsel submitted was compelling. Among the highlights: • A contractor testified about the property’s significant structural problems, calculating that a partial demolition and reconstruction to restore the asset’s value would cost almost $1.7 million. • An architect, who was qualified as an expert, corroborated the contractor’s cost estimate as reasonable. • The broker who had tried to lease or sell the property testified about the lack of interest in the building. The only purchase offer received was well below the government’s position, and was withdrawn after the prospective buyer’s property inspection and due diligence. • …

ATLANTA — Voters across 10 counties in metro Atlanta will head to the polls Tuesday, July 31, to decide the fate of a referendum that, if approved, would fund local and regional transportation projects through a 1 percent sales tax increase for the next decade. An economist for the State of Georgia has estimated that the Transportation Special Purpose Local Option Sales Tax, or T-SPLOST, would generate $8.47 billion over 10 years. The ballot initiative calls for the money to be split between two funds: 85 percent, or $7.2 billion, would go toward regional projects already selected by the Atlanta Regional Commission, while the second fund would account for 15 percent, or $1.27 billion, and will be allocated directly to counties and cities. The revenue from the sales tax increase in the latter fund will be distributed back to each jurisdiction based on population and centerline road miles present in that jurisdiction. Vocal Supporter The commercial real estate industry has taken a strong stance in favor of T-SPLOST. Clark Gore, regional managing principal in the Atlanta office of brokerage firm Cassidy Turley, says passage of the referendum would be a win-win for everyone involved. “From a self-serving standpoint, we would …

HOUSTON — Ken Stockton, a longtime leader with NorthMarq Capital, passed away in Houston on Thursday, June 28, at the age of 68. Stockton was one of the founding members of Houston mortgage banking company Stockton, Luedemann & French, which later became Stockton, Luedemann, French, Jackson and West, and was acquired by NorthMarq in 1998. “Ken accomplished many things over his short time with us,” says Ed Padilla, CEO of NorthMarq Capital. One that will live with many of us was his impact on the growth and development of our great company, NorthMarq Capital. We are forever grateful for his counsel, leadership and contributions.” Stockton, Bill Luedemann, Kerry French, Dan West and John Burke founded their firm in 1985 after careers with another mortgage banking firm in Houston. SLFJ&W was the first of 13 acquisitions that NorthMarq made between 1998 and 2005, resulting in doubling of the offices and increasing the number of employees from 130 in 1998 to 360 in 2005. “Ken, Kerry, John, and I worked together for more than 30 years,” says Luedemann. We will miss his wisdom, his counsel, and his sense of humor.” “I had the privilege and pleasure of knowing and working with Ken …