Retail

Pent-Up Demand Grows for Experiential Retail in Texas

by Taylor Williams January 7, 2021

By Taylor Williams With widespread vaccination several months away and the federal government having passed additional relief legislation, the end of the COVID-19 pandemic appears to be in sight. To that end, retailers and restaurants that have survived the public health crisis can, with some reservations, start to look toward the rebound phase. Because there’s no question that American consumers are itching to make up for lost eating, drinking and socializing time, provided they can do so in what they feel are safe environments. “Our biggest point of optimism for 2021 lies in the fact that people want to go out, eat, shop and be entertained,” says Lucas Patterson, executive vice president at metro-Dallas based Bright Realty. “As we continue to respond to the pandemic, people are increasingly ready to get out of their homes, be with others, eat at restaurants, have drinks and listen to music. We believe we can offer those opportunities as soon as the time is right.” “Looking forward, our biggest source of positivity involves consumers’ built-up savings and pent-up demand for human connection in a more normal existence,” adds Terri Montesi, CEO of Trademark Property Co, the developer behind mixed-use projects such as Victory Park …

January 7, 2021

Conference Coverage Features Retail

Net-Lease Investors Prioritize Assets Occupied by Essential Retailers, Says InterFace Panel

by Taylor Williams December 9, 2020

By Taylor Williams Retail tenants with strong credit, sales and branding have long been the darlings of the net-lease investment market via their ability to unlock value in their underlying real estate. But as the COVID-19 pandemic has battered brick-and-mortar retailers in a plethora of categories, net-lease investors are placing added emphasis on the products and services that tenants offer when targeting new acquisitions. After nine months of the public health crisis, investors have a better sense of which tenants are flourishing in the net-lease space and which ones are languishing. This more targeted, stable approach to investing is joining forces with the unleashing of pent-up demand from the spring and summer months, when capital sources largely took to the sidelines. According to a third-quarter report from Avison Young, deal volume in the single-tenant net-lease (STNL) retail space rose by 13.8 percent from the second to third quarters of this year, though the period’s 329 trades fell well short of the first-quarter mark of 416 deals. As a result of elevated investment demand, cap rates in the market are starting to compress — again with a pronounced difference among retail assets based on their tenancy profiles. Avison Young’s report found …

December 9, 2020

Market Reports Midwest Midwest Market Reports Nebraska Office Retail

Key Leasing Considerations for Commercial Landlords in the Age of Coronavirus

by Kristin Harlow November 5, 2020

By Addison Fairchild, Baird Holm At its onset nearly nine months ago, the novel coronavirus forced federal, state and local leaders to consider measures necessary to prevent the virus’s inevitable spread. Those leaders imposed measures they calculated to balance minimizing the spread and harm of coronavirus to the national and local economies. Whether those measures were effective in achieving those goals is a question for another day. However, now that coronavirus is currently a part of daily life, businesses have been considering what measures they must take. Like political leaders, they must also consider balancing the potential liability they may face for the spread of the coronavirus or other illness, the harm to their patrons and clients, and the harm to their bottom lines. Commercial landlords are not exempt from considering the coronavirus or other pandemics in future leasing. It is unlikely a court would find a commercial landlord liable for the spread of a pandemic in their leased properties, except in rare circumstances. However, tenants may require landlords to provide upgrades to properties to ensure the safety of the leased premises. This article considers whether landlords may be liable for the spread of a pandemic in their leased premises. …

November 5, 2020

Market Reports Retail Texas Texas Market Reports

Central Texas Retail Investment Market Heats Up

by Taylor Williams October 13, 2020

By Brad Bailey, first vice president, CBRE; Adam Rabin, associate, CBRE; and Logan Reichle, vice president, CBRE It’s no secret that across the United States, the retail investment community has had to shift and adapt in several ways due to the ongoing pandemic. In addition, retail owners have had to make quick assessments of their strategies for asset management, usually on a property-by-property basis. For the first part of the pandemic, the commercial real estate industry was primarily reactive and in crisis mode. However, seven months into it, the indication is that this is something that will be around for the foreseeable future. As such, investors are moving out of their reactive modes and beginning to implement offensive strategies to identify and secure strong retail real estate investments. There are a number of key reasons that these investors are honing in on Central Texas retail: Suburban vs Downtown Good retail locations are hard to come by in Austin. We estimate that investment demand will rebound for space recently vacated. In high-quality locations, don’t expect too much of a change on rental rates. For some Austin submarkets like Cedar Park and Lakeway, we may see rates adjust slightly as vacancy rises. …

October 13, 2020

Market Reports Northeast Northeast Market Reports Pennsylvania Retail

Philly Retail Market Responds to COVID-19

by Taylor Williams October 9, 2020

By Taylor Williams What a difference a year makes. Around this time in 2019, the Philadelphia retail market was experiencing something of a Renaissance. Driven by forward-thinking projects in chic neighborhoods, such as Fashion District Philadelphia, as well as the delivery of new phases of retail at destinations like Schuylkill Yards and the Philadelphia Navy Yard, the market was embracing new users, customers and spaces alike. The evolution of Philly’s retail market at this time inevitably bred winners and losers. Six months later, the onset of a global pandemic would give rise to political policies that crushed capacities and foot traffic for retailers and restaurants. Add in a healthy dose of elevated online shopping, and the result was a one-two punch that was simply too much for some retailers to survive. Such is the scene playing out today in the City of Brotherly Love. But real estate professionals are quick to point out that the demise of some retailers was unavoidable before COVID-19 came around, and that ultimately the city’s strong demographics will usher its retail market through the recession. “We shouldn’t lose sight of the fact that pre-COVID, several categories of retailers were not thriving or were irrelevant or …

October 9, 2020

Conference Coverage Market Reports Retail Texas Texas Market Reports

Houston Restaurant Market Embraces Creativity Amid Pandemic, Says Exclusive Webinar Panel

by Taylor Williams October 7, 2020

Landlords, users and brokers throughout the Houston retail market are re-tooling their properties and operating practices to stay afloat amid the COVID-19 pandemic, introducing ways of doing business that may persist long after the public health crisis has subsided. A panel comprising retail leasing, development and investment sales professionals in Houston convened on Tuesday, Oct. 6 to discuss specific ideas and methodologies that have been put into practice as COVID-19 rocks the world of brick-and-mortar retail. Shopping Center Business and Texas Real Estate Business, two magazines published by Atlanta-based France Media Inc., hosted the event. Prior to the pandemic, social events that activated open public spaces helped landlords to promote their tenants’ businesses and to bring traffic to their centers. With public health protocols precluding many of these events from happening, owners and tenants alike have had to think outside the box. New Practices Sustain Business No retail category has seen this trend displayed more visibly than the restaurant sector. Emily Durham, partner and director of hospitality services at Waterman Steele Real Estate Advisors and a longtime tenant rep specialist for restaurant owners, identified several new practices that have helped restaurants stay above water. “The sit-down and fine dining restaurants have had the …

October 7, 2020

Company News Market Reports New Jersey Northeast Northeast Market Reports Retail

Jersey Mike’s Sandwich Chain Invests in Delivery, Pick-Up

by Taylor Williams August 18, 2020

By Alex Patton During the business lull caused by the outbreak of COVID-19, fast casual sandwich chain Jersey Mike’s made news by rolling out a $150 million nationwide retrofit project for its stores. The project will include aesthetic and comfortability upgrades for 1,700 franchise stores, as well as expanded functionality for delivery and pick-up services — all paid for by the company. “Paying for the retrofits ourselves is a tactical move on our part,” says Peter Cancro, CEO of Jersey Mike’s. “Whenever you put money in your business, it always comes back. It’s an investment into our people — every dollar we put into the project we’ll get back in loyalty and trust from our franchise owners and our customers.” The Manasquan, New Jersey-based company operates approximately 1,750 stores across 48 states and plans to expand to 2,000 by the end of 2021. Though the company is growing its store count quickly, it is still a relatively small player in the national sandwich game. By comparison, Jersey Mike’s two closest competitors, Subway and Jimmy John’s, operate 24,000 and 2,800 stores in the United States, respectively. Amid state-mandated temporary closures of retail stores and restaurants, Jersey Mike’s was able to continue …

August 18, 2020

Market Reports Massachusetts Northeast Northeast Market Reports Retail

Wanted: Essential, Durable Retailers in Boston

by Taylor Williams August 7, 2020

By Alex Patton Retail real estate investors in Boston are cautiously evaluating the risk profiles of tenants even as businesses reopen following temporary closures due to the COVID-19 pandemic. The emerging consensus is that until a vaccine is developed to safely treat the virus, the safest investments are tied to essential tenants with reliable incomes. That short list includes grocers, drugstores, home improvement businesses and liquor stores. Like the rest of the country, all nonessential retail businesses in Massachusetts were forced to close temporarily in early March, for what was originally expected to be a short period. After several weeks, the commonwealth’s government implemented a phased reopening system that allowed some retail businesses to resume operations. However, after months with significantly reduced income, a number of small retailers are declaring bankruptcy and permanently closing stores to save money. “The underlying question that permeates the retail investment industry, as an investor or a lender, is how much of the income is durable? In other words, which retailers are going to survive?” asks James Koury, senior managing director of investments at the Boston office of Institutional Property Advisors (IPA). “A vaccine would be a game-changer, but we can’t know if it will …

August 7, 2020

Industrial Market Reports Multifamily Retail Texas Texas Market Reports

What’s Up Next For San Antonio?

by Taylor Williams July 17, 2020

Interviews conducted by Taylor Williams During the 10-year expansionary cycle, San Antonio posted one of the highest rates of population growth in the country, bringing new development of luxury apartment communities, modernized e-commerce facilities, bustling entertainment destinations and a landmark Class A office building. While some short- and long-term pain from COVID-19 is inevitable, there is also some optimism on the horizon. Industrial broker Cody Woodland of NAI Partners, multifamily developer David Lynd of LYND Co. and retail investment sales specialists Kevin Catalani and Price Onken of CBRE share thoughts on what’s happened and what’s coming in the Alamo City. Texas Real Estate Business: In terms of your sector, what have you seen in the San Antonio market in response to COVID-19? Cody Woodland: Much like other industrial markets, we’ve seen many tenants put their requirements on hold, including some sizable leases near execution. Most of these resulted in short-term extensions that should resurface in 2021. We’ve also seen numerous deals with essential users requiring immediate short-term space for storage purposes due to fluctuations in supply chains, primarily in the grocery and medical product sectors. Even during the pandemic, some long-term leases have still transacted, such as Dollar General’s 285,000-square-foot …

July 17, 2020

Market Reports Oklahoma Retail Texas Texas Market Reports

Far North Oklahoma City Retail Market Hits Its Stride

by Taylor Williams July 14, 2020

By Stuart Graham, Senior Vice President, CBRE; Mark Inman, Senior Vice President, CBRE; and Kendra Roberts, Associate, CBRE The Oklahoma City retail market has had a growing and changing landscape over the past few years as the sector’s healthy fundamentals continue to draw both local and national investors. Although much of the growth has been focused on the downtown Oklahoma City area, we are beginning to see a new hotspot emerge in the Far North neighborhoods. High-quality schools and affordable housing in the Far North Oklahoma City submarket of Edmond, as well as in the surrounding neighborhoods, have been major draws for young families. Both the Deer Creek and Edmond School Districts rank among the top three school districts in the state and also enjoy high national rankings. As a result of these residential and educational features that are attracting younger households and driving population growth, the Far North Oklahoma City submarket has recently seen a significant uptick in both retail investment and development activity that better support this underserved and growing community. To illustrate this submarket’s rise, consider the fact that nearly 20 percent of the total volume of retail product currently under construction in the Oklahoma City area …

July 14, 2020

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