We’ve all seen them, right?

Shopping centers in which vacancies appear to linger forever. And sadly, when empty shop spaces hang around, vacancies seem more apt to increase, rather than the other way around.

And if you’re a shopping center landlord, this is an all too familiar, not to mention frustrating scenario. Especially when you’ve hired a leasing broker to fill your property’s vacancies.

It’s also a sign…

That it may be time for some “new blood.” In the retail real estate industry, this phrase means it’s time to bring in a new leasing agent with fresh perspective and potentially a new bag of tricks to get your center leased.

The fact that new blood me be in order doesn’t diminish your current agent or their efforts to lease your property. Truthfully, your agent is likely perfectly competent. But for whatever reasons, their undertakings have fallen short.

And in this situation, a new agent is often preferable to letting your center remain vacant. Because for a landlord, there’s nothing more anguishing than watching your profits evaporate, while fretting that other tenants may be contemplating jumping ship, too.

And lingering vacancy is not the only sign it’s time for some new blood. Other agent habits also indicate the need for a change.

Toward that end, here are three signs that it’s time to hire a new leasing agent…

Infrequent Communication

A dedicated agent regularly updates landlords. Your leasing agent is your conduit to what’s happening with your property. As such, your leasing agent should be reporting to you at least once a week. Even if the update is: “nothing new to report.” In the absence of regular updates, you’re left completely in the dark and wondering what’s happening with your property???

Moreover, you’re paying for your leasing agents services. You shouldn’t have to chase them for information. Instead, keeping you informed should be your agent’s #1 priority!

Undocumented Leasing Efforts

Even is a leasing agent quickly leases a vacancy, as a landlord, you can’t help but wonder: “What are these guys REALLY doing for me???”

It’s easy to take your leasing agents efforts for granted. But a dedicated agent, however, is hard at work sourcing a quality tenant for your property.

And such agents documents their efforts with progress log. This log includes all…

== > Incoming tenant inquires (whether from sign calls, LoopNet or web-search, referrals, etc…)

== > Tenants contacts (dedicated agents maintain active tenant lists and promote new listings to those tenants)

== > Tenant rep brokers contacts (dedicated agents cultivate strong relationships with active tenant rep brokers and promote relevant new listings to those brokers)

== > Corporate real estate reps the agent has shared the vacancy with (listings in exceptional locations may interest corporate tenants. And savvy agents have avenues by which to reach corporate real estate reps and promote relevant listings to those reps)

Poor Follow Through

If you’re like many landlords, you’ve probably received a call from a prospective tenant that sounds something like this…

“I left 17 messages for the listing agent, and they haven’t returned any of my calls!? I REALLY want to lease your space! PLEASE CALL ME.”

The “17 messages” claim is likely an exaggeration. And of course, leasing agents have their own tenant vetting process. But a tenant that’s motivated enough to seek out a landlord’s contact info and reach out directly is at least worth a callback.

Never mind that your agent should follow up on all tenant inquiries. And report the outcome to you, whether the lead pans out or not.

Need Some New Blood to Lease Your Shopping Center?

If, in addition to lingering vacancy, the other points outlined above resonate with you, it may be time to consider bringing in some “new blood” to lease your shopping center.

And if you’re in the market for new leasing services, CBM can help! Since 1987, we’ve served hundreds of landlord’s, leasing thousands of retail spaces throughout Southern California.

For more information, visit cbm1.com/services.

Stealing the show, one of Senior Leasing Agent, Geoff Grossman’s inimitable skills, is EXACTLY what Mr. Grossman did during his appearance on ACRE’s annual Retail Forecast panel this past Tuesday.

Lead by moderator Ryan Garcia, Vice President of CBRE, and joined by fellow panelists, Ben Terry, Vice President of Coreland Companies, and Trevor Blood, a mortgage broker with Southwest Pacific Realty, Mr. Grossman took a deep dive into the prospect of what 2018 holds for the retail real estate industry.

Read the full recap here…

Centers Business Management (CBM) leasing agent, Matt Saker, recently completed a lease transaction representing the tenant, State Farm Insurance, on a 950 SQFT retail space. The unit is large community center at the intersection of lower Azusa Road and Golden West Avenue in prime El Monte. The center’s co-tenants include Subway, Popeyes Chicken, Louisiana Fried Chicken and more.

Centers Business Management (CBM) Valley Division Director, Dave O’Connell, and leasing agents, Brett Mero + David Guardado, recently completed a lease transaction representing the landlord and tenant, Famers Insurance, on a 660 SQFT retail space. The unit is in a large strip shopping center at the intersection of De Soto and Osborne in prime Canoga Park. The 2-story shopping center features a diverse mix of service, food, and retail office tenants.

Centers Business Management (CBM) leasing agent, Robert “Bob” Chaikin, recently completed a lease transaction representing the landlord and tenant, Fiesta Insurance, a regional insurance broker, on a 1,772 SQFT retail space. The unit is in a busy medical clinic anchored community center at the intersection of Firestone and Santa Fe in prime South Gate. The center’s notable co-tenants include Fast Auto Loan, Fred Loya Insurance, Pronto Pizza, Metro PCS, and more.

Centers Business Management (CBM) leasing agent, Jason Ehrenpreis, recently completed a lease transaction representing the landlord, in a deal with a local staffing agency on a 1,119 SQFT street retail space. The unit is on the street facing portion of a Food4Less (grocery store) anchored community center at the intersection of Santa Fe and Florence in prime Huntington Park. The busy center also features a high-volume sales Carl’s Junior (fast food) drive-thru on the hard corner.

Broad Yet Subtle CRE Changes Coming Through Tax Reform

By Globe St. December 27, 2017

“The new tax law is generally benign for commercial real estate, but there are many nuances that will affect investor’s real estate and their after-tax returns,” says John Chang.

CALABASAS, CA—The passage of the long-anticipated tax reform legislation will take effect next year, leading many investors to the arduous task of recalibrating their strategies and assessing how the changes will affect their assets. As John Chang, first VP of research services for Marcus & Millichap, explains, “The new tax law is generally benign for the commercial real estate sector, but there are many nuances that will affect real estate and the after-tax returns of investors.”

Before considering some of the specific provisions, it is worth noting that the simple act of passing tax reform legislation itself could significantly benefit the sector. The clarity on tax reform will reduce the uncertainty that has weighed on the marketplace. As Chang states in a Special Report issued by the company, commercial real estate investors who may have been hesitant to move previously, will now have a much better understanding of the investment real estate landscape and can formulate a plan under the new rules.

“Over the last year, a more cautious outlook pervaded the industry as investors awaited clarity on taxes, fiscal policy and a change in Federal Reserve leadership, causing many investors to move to the sidelines,” says Chang. “That guarded approach to investment planning and underwriting could begin to ease as the implications of the new tax rules are better understood, and investors are able to assess their investment strategies with a new tax perspective.”

(Please click here for the Special Report and details of the tax changes. Highlights follow.)

For the commercial real estate industry, a notable concern over tax reform was the fate of 1031 like-kind exchanges. However, as Marcus & Millichap reports, the final version of the bill passed by Congress is expected to have no major impact on this area of commercial real estate investment. Other risk factors at the top of investors’ minds were the ability to deduct mortgage interest, how investment real estate depreciation would be handled and potential changes to carried interest. Though each of these very important considerations face some change, they were largely maintained in-tact.

From an asset performance standpoint, several changes by the new tax laws will affect specific property types. The elimination of the individual mandate requirement in the Affordable Care Act could hold ripple effects for healthcare real estate. According to Chang, “The elimination of the personal mandate is anticipated to reduce the number of insured by an estimated 13 million people by 2027.” That said, although having fewer insured could reduce demand for medical services by an estimated 5 percent, the actual impact on medical office space and seniors housing over the next decade should not be too impactful. Chang notes that “the direct effect on healthcare real estate performance should be nominal.”

Other changes to the tax laws that could impact asset performance are centered on owner-occupied real estate. The changes will likely bolster long-term demand for multifamily housing, stemming from provisions that increase the standard deduction and cap the deduction of combined property taxes and mortgage interest deductions.

“Increasing the standard deduction to $24,000 for married couples and $12,000 for individuals and capping the deduction on combined property, sales and state income taxes to $10,000 lowers the incentive to itemize deductions,” says Chang. “This shift could diminish some of the allure of homeownership for first-time buyers, and prompt additional demand for apartments.”

Finally, reduced taxes on pass-through entities may also have an enormous impact on commercial real estate investment. For current real estate investors who are not already using an LLC or other pass through business form, the new tax laws could spark an entire portfolio reevaluation as they restructure their business model. For investors who are not already in commercial real estate, the new tax rules offer prospects of higher after-tax yields than other investment options. This change could entice significant additional capital to the CRE marketplace.

In all, the clarity the new tax law provides will position investors to make more informed decisions and leverage new mechanisms to optimize their investment strategy. With the enactment of the law, it is important for investors to reevaluate their strategies now so they are poised to maximize value when the law goes into effect.

10 New Year’s resolutions worth keeping for every CRE broker

By Apto

How will you make 2018 your best year yet?

We looked back at a year of blog posts to bring you the 10 New Year’s resolutions every broker should consider making—and keeping—in 2018. Feeling inspired? Pick one of these ideas and make it happen. Remember, success isn’t just about reading something and bookmarking it for later: it’s about turning what you learn into action.
1. Always be prospecting.
Most brokers don’t prospect enough, while the best brokers prospect constantly. This year, make prospecting the first and last thing you think about when you get to the office, with these 7 ideas for better prospecting. (For even more inspiration, check out the 23 conversation topics you can use while prospecting, plus insights on where the best leads come from.)

2. Make better connections.
To be a good broker, you need to make more connections—shake more hands, make more phone calls, contact more prospects—but to be a great broker, you need to make more and better connections. This year, find the right balance between quantity and quality when it comes to professional relationships. Check out our guide to building better rapport with just about anyone, as well as these 9 creative networking ideas and 5 ways to make networking a painless part of your life.

3. Do one thing at a time.
Multitasking may be your default setting, but it’s more likely sabotaging you than helping you (and we bet you don’t even know it). Instead, commit to monotasking, or doing just one thing at a time. When you pare things down, you’ll be amazed at how much you actually get done.

4. Banish procrastination.
If you’re one of the 20% of adults who constantly struggle with procrastination, these simple steps may help. Learn how to build momentum, break big tasks down into doable chunks, and stop deceiving yourself about where your time is actually going. Your time is valuable—don’t fritter it away on procrastination.

5. Tackle a weakness.
We recently heard from a broker who turned one of his biggest weaknesses, social anxiety, into a strength. What’s the one weakness that’s holding you back from being at the top of your game? Attack it with the ultimate goal of making it your strength.

6. Find a mentor.
One of the biggest reasons brokers fail is because they think they can do it all themselves. But to get to the next level, you absolutely must find a mentor who can guide you wisely, open doors, and help you grow. Sure, you may do just fine without one—but not having a mentor is like driving in the slow lane for the rest of your career.

7. Get something out of every “no”.
To survive as a broker, you just have to get comfortable with people telling you “no”. And since you’ll be hearing it a lot, you might as well make the most of it. Next time you get rejected, respond with curiosity instead of defensiveness. And when you get an objection, practice turning it into an opportunity.

8. Make success automatic with smart habits.
Habits hold more power over your daily work (and ultimately, your success) than you probably realize: 40% of what you do each day is pure habit, which means you don’t even think about it while you’re doing it. Here’s how you can tweak your habits to make success automatic.

9. Learn a new way to listen.
You know you should be a better listener—but what exactly does that mean? We’ve got 4 advanced listening strategies that you may not have heard about but that will set you apart from everyone else who’s just nodding along.

10. Go for a walk.
Combine this with your resolution to be more active this year. We’ve got the scoop on how walking the neighborhood, checking out community happenings, and doing more away from the office can actually bring more business to your office.

We hope you enjoyed these ideas for 2018, and that you’ll put a few of them into practice. From all of us at Apto, here’s to your growth, success, and happiness in 2018

View the original article here…

Retail Landlords Struggle With the Logistics of Backfilling Vacated Space with Entertainment Concepts

By REBusiness Online, January 2, 2018

With multi-level hitting stations and open driving ranges, Dallas-based Topgolf epitomizes the high degree of variability in spatial requirements for entertainment concepts.

With multi-level hitting stations and open driving ranges, Dallas-based Topgolf epitomizes the high degree of variability in spatial requirements for entertainment concepts.

As 2018 gets underway, retail real estate finds itself at an odd juncture.

According to CNN, more than 6,700 stores either closed or announced plans to close in 2017, leading many to consider last year to be the beginning of the end for brick-and-mortar shopping. Yet a new report from Tennessee-based retail advisory firm IHL Consulting Group notes that for every company that closed stores in 2017, there were nearly three companies opening new stores to offset it.

Whether you believe retail is dying or evolving, there’s no arguing that the inability of certain tenants — mainly apparel-based department stores — to compete with e-commerce has caused millions of square feet of retail real estate to be returned to the market.

Owners of these properties face the challenge of backfilling these spaces with tenants that aren’t likely to share the same fate — restaurants, gyms and entertainment concepts. But when it comes to backfilling a big box or anchor space with an entertainment concept, merging the existing space with the design requirements of the tenant can be a major headache for landlords.

With 58 million square feet of project designs under his belt, Randy Stone, associate principal at Dallas-based architecture firm Omniplan, knows that every entertainment project has different spatial requirements. The primary dilemma that both architects and developers face with these projects involves whether to scrape the existing structure or to revamp the structural grid in place.

“When you’re repurposing or backfilling a big box, you first have to determine whether to tear it down, take off the top floor, retrofit the existing structure or force the design of the entertainment component into the existing structure,” says Stone. “You have to do your due diligence and have testing labs come in and find out what the structural grid can support.”
Adding a ropes course to its lineup of activities generates additional revenue for Cinergy, but also requires minimum ceiling heights of 22 to 25 feet.

Adding a ropes course to its lineup of activities generates additional revenue for Cinergy, but also requires minimum ceiling heights of 22 to 25 feet.

Stone adds that traditional big boxes don’t usually work for entertainment tenants, which have smaller overall footprints but want clear-span, open-environment layouts. As such, he says, many theaters and entertainment concepts must design smaller facilities in order to fit in marquee locations.

Tenant Perspective
Jeff Benson, founder and CEO of Cinergy Cinemas and Entertainment, is currently experiencing firsthand the difficulties of introducing his concept into vacated retail spaces.

Cinergy, which offer laser tag, ropes courses, bowling and arcade games in addition to movies, food and beverages, is in talks with three malls to bring the concept to their anchor spaces. Cinergy would remodel the existing space in two of those malls if the deals close.

“The challenges of bringing an entertainment concept into an existing retail space are immense,” says Benson. “Columns and ceiling heights are usually the big issues. Sometimes you can work with them and sometimes you can’t, so the location really has to have the demographics to justify the cost of remodeling the space.”

Cinergy currently operates centers in Copperas Cove, Midland and Odessa, with another location under construction in Amarillo. The company has also closed deals to open centers in El Paso and Tulsa, Oklahoma, over the next several years.

“Our Tulsa center is backfilling an old theater and ajacent retail space and installing bowling and amusement,” says Benson.

“This requires careful consideration of the column grid and spacing. Our new-build prototype facilities are about 90,000 square feet, so it’s a big floor plan to retrofit into an existing space. We’d rather just scrape the existing structure and build from scratch.”

Vacated anchor spaces at malls make good locations for entertainment concepts, says Venture Commercial’s Larry Leon, a specialist in tenant representation for restaurant and entertainment retailers.
“Entertainment concepts typically go into malls for parking and a climate-protected place for families to line up,” says Leon. “These concepts often draw from huge circles and space their units 15 to 20 miles apart.”

Developer Perspective
From entertainment giants like Main Event and Topgolf to niche operators like Glowzone and Kidzania, there’s no shortage of competitors in the entertainment retail space, and each concept is its own beast in terms of spacing and design.

“One of the biggest challenges of leasing for entertainment tenants is that they don’t have consistent requirements,” says Gar Herring, president and CEO of The MGHerring Group, a Dallas-based owner, developer and manager of retail properties. “You can do build-to-suit projects for these users, but some want to buy and some want a turnkey deal, so you really have to be flexible.”

Preliminary design challenges aside, retail owners that opt for entertainment anchors should also be prepared to subsidize capital improvements to those spaces.

“Most entertainment tenants today require heavy tenant improvement investment by the landlord in the $200 to $300 per square foot range,” says Venture Commercial’s Leon. “Owners have historically been reluctant to provide this level of improvement dollars, but recently, they’ve come to realize the importance of these tenants to the overall mix, as well as the necessity of filling their big box spaces with tenants that will draw lots of people.”

Because the requirements of entertainment users vary so much from concept to concept, they often struggle to provide blueprints and prototypes to developers that want to feature them as anchor tenants. In addition, evaluating these users on traditional retail metrics can be misleading because there’s little benchmark data for them. The lack of comparative data can also muddy the waters when it comes to financing construction of build-to-suit projects, as well as acquiring stabilized properties anchored by entertainment tenants.

“Cap rates on centers anchored by entertainment users are just not as well-known,” says Herring. “You might get more cross-shopping with an entertainment anchor, but some developers still see the grocery anchor as a safer bet because exit cap rates on those assets are very straightforward.”

Parking Wars
If there’s one issue that every source interviewed for this piece agreed on, it’s that parking is a major point of contention in the world of entertainment retail. Whether it’s a theater, bowling alley, arcade, mini theme park or some combination of those concepts, they all tend to use large blocks of parking spaces for long periods of time.

While freestanding locations have only city codes to adhere to, operators of entertainment centers in malls and shopping centers routinely spar with landlords and other retailers over parking. Parking represents a co-tenancy haggling point for entertainment tenants vying for old spaces and a key challenge for architects tasked with designing new spaces for these users.

But despite all these potential headaches for tenants and landlords alike, in this day and age, very little retail product is insulated from e-commerce. For the time being, entertainment is a rare exception, so it just may be worth all the headaches and hassle.

View original article here…