Landlords, Retailers At Odds on Brick and Mortar

By Globe Street, November 16, 2017

WASHINGTON, DC—Mall and shopping center landlords and the retailers that would occupy their properties don’t see eye to eye on a number of areas related to brick and mortar stores, says FTI Consulting. As many as 93% of landlords agree or strongly agree that new stores are critical to retailers’ sales growth, while just 61% of retailers would say the same.

Owners and tenants also have differing views on location, store design and consumer experience. For example, FTI’s survey finds that landlords believe that being located near other high-traffic retailers and providing a compelling architectural design and physical environment—cited by 87% and 73%, respectively, of owners surveyed—are the two most important benefits they could offer a retail tenant.

The figures are lower for retailers: 66% and 44%, respectively. Retailers think convenient parking is more important than design and store environment; 52% cited this factor.

Another disparity in priorities is found in the value of flexible store configuration: 40% of retailers say this is important, while just 10% of landlords would agree. Conversely, only 33% of landlords, compared with 73% of retailers, agree or strongly agree that shoppers require a more personalized in-store experience.

“While it may not come as a total surprise that landlords place a greater value on the physical location of the store than retailers do, these variations in perceptions present a real opportunity for landlords to work more closely with their retail tenants to explore how they can support their growth plans,” says Cynthia Nelson, Los Angeles-based senior managing director in FTI’s real estate and infrastructure industry group. By the same token, observes senior managing director Christa Hart with FTI’s retail & consumer products practice in New York, “Our research also suggests that many retailers are in denial about deep and pervasive shifts in consumer trends affecting the state of the industry.”

One of the greatest disconnects between landlords and retailers is the concern over evolving consumer demographics and preferences, says Hart. Seventy percent of landlords cite this concern, while only 40% of retailers do. Additionally, 60% of landlords “agree’ or “strongly agree” that retail customers are shopping in physical stores less often, while just 37% of retailers have this perception.

The survey found landlords far more concerned than retailers about the shift to online shopping and changing consumer preferences: 80% of landlords, compared to 57% of retailers. In fact, retailers expect e-commerce to account for 23.6% of their sales in three years, up from 16.1% today. For landlords, says Nelson, “This concern is understandable since landlords’ real estate assets can’t be modified to succeed in the digital era as readily as can retailers’ ability to become omnichannel merchants.”

A New Year, A New Venue, But Still the Same ICSC Western Division Conference…

After a decade in San Diego, the ICSC Western Division Conference — the Western State’s premier shopping center industry event — relocated to sunny Los Angeles… Welcome to LA, friends!

As a result, countless vendors, municipalities, development firms, retail tenants, and commercial real estate’s best and brightest brokers descended upon the LA Convention Center for two and half days of prime networking + deal making.


CBM’s leasing and management team was at the show in FULL FORCE. Operating from Booth 1003, our leasing agents and property managers conducted nearly a dozen meetings, unifying eager landlords and active tenants. Certainly a productive affair for the top CRE pros of CBM!

Deal Making Action on the Convention Hall Floor…

In addition to the activity at our booth, the Tenant Midway, situated behind the front section of exhibitor booths was, in a word, hoppin’ during the height of Tuesday’s deal-making session. And while vendors, municipalities, and development firms are an integral part of the ICSC convention experience, tenants are the lifeblood of the event from a brokerage perspective.

Here’s Hoping ICSC Brings in Even MORE Tenants

ICSC has certainly done a great deal to promote tenant participation. But CBM, and the rest of the brokerage community hopes the organization can bring even more tenants. Specifically, we’d like to see a broader base of tenant representation, including office-retail users and medical users, among others.

A Word Event Timing…

In the transition from Palm Springs to San Diego, ICSC saw fit to expand the event. What was once two days, with a single day deal-making session, became three days, with a day and a half deal-making session.

But here’s the reality of how the dealing making sessions plays out… Nobody shows up on the first day until about 11am. And everybody who doesn’t have to staff a booth is gone by 4pm. Meanwhile, on the second day 90% of the attendees are only there because they’re staffing a booth.

It’s understandable that ICSC wants to justify their pricing and “pack as much into the conference as possible!” but it’s really a waste for exhibitors.

Why not a single day 10am to 4pm deal-making session? And if ICSC REALLY feels the need to justify their pricing, a 9am to 5pm deal making session wouldn’t be outrageous. But anything short of that is just a pointless waste of time for most attendees.

A Word on the New Location…

San Diego, and Palm Springs before it, were destination locations. And unfortunately, Downtown LA is no match for Palm Springs’ resort atmosphere or San Diego’s Gaslamp district charm.

ICSC has already committed to three years at the LA Convention Center, with next year’s date formally annoanced. But hopefully, after that run, the organization will rethink its current location choice.

A Show Highlight: Ervin “Magic” Johnson’s Keynote Speech

This year’s keynote speaker was one of the most exciting in the event’s history. A highly successful retail landlord, property investors, and developer, Ervin “Magic” Johnson is a true Los Angeles luminary.

And his Keynote speech lived up to his reputation as not only one of the NBA’s all-time greats, but as one of the Los Angeles’ business communities best and brightest.

Magic related how his tenacity and competitive drive to be the best on the basketball court translated to his career after the game. A mindset that has established Magic as a preeminent entrepreneur, real estate tycoon, and sports team ownership mogul.

Additionally, throughout his speech, Magic continually praised the work of the landlords, investors, and brokers present in transforming Los Angeles, particular Downtown LA, into the retail real estate powerhouse it is today.

Want to See More Pix of CBM’s booth? Visit our Facebook photo gallery!

Owning a shopping center is different than other “traditional” investments…

Unlike stocks and bonds, and even investing in business startups, shopping centers involve a “human element” – also known as tenants – which is HIGHLY unpredictable. And dealing with this inscrutable human element is referred to as “Tenant Relations Management.”

Now, if you’re like lots of other retail landlords, you’ve likely found yourself, at one time or another, wrapped up in tenant drama. And rather than making sound business decisions (like enforcing the terms of a legally binding lease agreement), you’re making concessions to pacify a tenant’s emotional pleas.

So, how do you avoid this beyond frustrating predicament? Hire a property manager to handle Tenant Relations Management for you.

How does Tenant Relations Management work? Well, chiefly…

A Property Manager Creates a Buffer Between You + Your Tenants

Your manager handles all direct communication with tenants, including email, phone and face-to-face meetings. All tenant requests are relayed to you by your manager. This relay allows you to make considered and sensible decisions without being put on the spot by an anxious, overtly emotional tenant.

In essence, your manager removes you from equation, and in turn takes you off the firing line of emotionally overwrought tenants.
Manager Buffer Benefits Include…

Managers play the “Bad Guy” For You – Truthfully, nobody likes to be the “bad guy.” But in the end, you’re running a business. Not a charity. So, rather than absorb the dramatic onslaught many tenants unleash when their requests are denied, your manager can be the “bad guy,” say “No” for you, and cope with the fallout.

Lease Enforcement – By and large, playing the “bad guy” boils down to enforcing the terms of a tenant’s lease. A lease, however, is a legally binding agreement to which tenants have a duty to adhere. Of course, this doesn’t prevent tenants from making requests for rent reductions or abatement, reductions in or exceptions to CAM charges, exceptions to exclusive use limitations, and laundry list of other petitions all in direct contradiction to their lease. But here again, your manager can field these request, and act as your “Lease ENFORCER.” CBM is “firm but fair.”

Validating Tenant Requests – In some cases, tenants have legitimate issues. And if a tenant you want to keep claims a hardship and asks for a concession or expectation, it may be worth acquiescing to their appeal. But navigating such requests necessitates walking a fine line. Even generally upstanding tenants have been known to take advantage of a landlord if the opportunity arises. To protect your interests, your manager will gather the necessary backup to either validate or disprove a tenant’s claims. Additionally, if you chose to grant a tenant’s request, your manager will craft an action plan that accommodates the tenant’s needs, while protecting your financial interests. Managing thousands of tenants gives CBM a clear understanding of which tenants are sincerely struggling, and which tenants are simply asking increase their profits at the landlord’s expense.

Need Help Managing Your Tenant Relations?

Visit our Services page to find out more about CBM property management services. If you have questions, or would like to meet with a property manager to discuss your property, contact CBM President, Rick Rivera directly at: 310.575.1517 Ext. 201 or

Ever notice how one shopping center thrives, while another, very similar shopping center, drowns in vacancies?

Similar location, similar demographics, even similar leases rates. But one center is consistently profitable, with little or no vacancy. And the other is constantly struggling to fill two or three perpetually empty spaces.

What separates these two properties? What’s the differentiating factor?

Tenant Synergy

What is Tenant Synergy?

Try to imagine your shopping center through the eyes of your tenant’s patrons. When they arrive at your shopping center, why are they there? What do the need?
For example sake, here are a couple of quick scenarios…

Typical Neighborhood Center in Middle-Class Community

Let’s say a guy needs to have his dog groomed…

-He drops Fido off at the groomers.

-With some time to kill, he stops by the medical marijuana dispensary.

-After picking up his “prescription,” he’s feeling a bit hungry, and orders a turkey and Swiss cheese sandwich at the quick-serve sandwich shop.

Or let’s say women needs a manicure…

-After work she stops into the nail salon and has a mani/pedi

-Nobody cooks anymore, so after the nail salon, she picks up Chinese take-out for the evening’s family dinner.

-And what’s dinner without a little libation? So she grabs some beer and wine at the mini-market to go with the take-out.

Neighborhood Center in Lower Income or Predominately Hispanic Area

Let’s say a domestic worker needs to cash a check, take her son and daughter to the dentist, and pick up a few items for dinner…

-She stops by the Check Casher and cashes her paycheck.

-Drops the two kids at the dentist for a check-up.

-And picks up a few grocery items at the mini-market before they all head home

Or an independent contractor handling landscaping or construction work needs to get a loan for ready cash in advance of his next pay check, and then pick up dinner or basic groceries for his family…

– He stops at the Payday Loan and arranges a quick short term cash loan

-Orders dinner to go from the taqueria

-Picks up milk + bread from the mini-mart

Right Tenant Mix Serving the Right Community

Tenant synergy is borne out of a complementary tenant mix serving the surrounding community’s needs.

And assembling this kind of tenant mix in your shopping center is exactly what will keep it fully leased and financially productive.

So How Can Professional Leasing Establish Synergy in Your Shopping Center?

As a landlord, you may be aware of how complementary tenant uses contribute to the productivity of your property. The concept is fairly intuitive.

But when a tenant vacates your center, how quickly does the ideal replacement occur to you?

And even if an ideal replacement does immediately come to mind, how well are you connected with suitable tenants, or tenant rep brokers, to fill that vacancy?

Leveraging Contacts + Connections

A professional retail leasing agent speaks to hundreds of prospective tenants and highly active tenant rep brokers every week. That’s thousands of conversations a month. All of which revolve around a particular type of tenant seeking a space in a specific area.

And a consistent percentage of those conversations result in executed leases.

In other words, a professional retail leasing agent knows which types of tenants are seeking space in what areas, and can funnel those tenants into corresponding vacancies.

And if the agent is representing your property, that means they’re funneling said tenants into your vacancy.

Find Out More About CBM’s Retail Leasing Services

Visit our Leasing Services page and find out more about how CBM professional retail leasing services can fill your vacancies with complimentary tenants – and create synergy in your shopping center.

Payless Is Said to Be Filing for Bankruptcy as Soon as Next Week

Payless Inc., the struggling discount shoe chain, is preparing to file for bankruptcy as soon as next week, according to people familiar with the matter.

The company is initially planning to close 400 to 500 stores as it reorganizes operations, said the people, who asked not to be identified because the deliberations aren’t public. Payless had originally looked to shutter as many as 1,000 locations, and the number may still be in flux, according to one of the people.

Payless’s bankruptcy would add to a tumultuous year in retail, with several bankruptcies and hundreds of store closings — even at companies that aren’t distressed. The industry is racing to try to adapt to more online purchasing and a shift away from mall shopping.

Payless was bought by private equity firms Golden Gate Capital and Blum Capital Partners in 2012 as part of the breakup of publicly traded Collective Brands Inc. The company, founded in 1956 in Topeka, Kansas, employs almost 22,000 people, according to its website. It has more than 4,000 stores in 30 countries.

Payless didn’t immediately respond to a request for comment.

View original article…

This year’s ICSC Western Division Conference is quickly approaching!

With the August 31st start date barley three weeks away, the anticipation is MOUNTING!

So now the question is, will we be seeing you in San Diego? If you’re making the trek, definitely stop by Booth #503 and say HI! We’d love to see you.

Once again, we scored a PRIME END-CAP right inside the convention hall’s main entrance (check out the floor plan below to orient yourself — and see our killer location!).

We hope to see you there!

floor plan

By Bisnow, Thursday, July 7, 2016

Experts Say Medical Tenants To Become Even More Prevalent At Shopping Centers

As struggles in the retail sector persist, landlords are looking even more heavily at medical centers. Bisnow sat down with CBRE Americas head of retail owner/agency practices Todd Caruso (below, left) and CSG co-chair of real estate, development and land use Mitchell Berkey (below, right) to discuss the growing presence of medical facilities at retail centers.

Bisnow: Why do we see an uptick in medical facilities taking space in retail centers?

Mitch: There are three major forces at work regarding the growth in urgent care centers in what were traditionally retail properties. One is that Americans are spending an increasing amount on healthcare; two, Americans want healthcare that is easily accessible, faster and less expensive than the traditional emergency room experience; and three, in the real estate world there has been a shrinking in the number of creditworthy tenants over the years. The urgent care center sector has grown substantially, and these establishments generally seek accessible and safe locations with parking, and tend to have strong balance sheets.

Todd: We have an aging demographic that has an enormous appetite for health-related services. One of the driving factors is the overall cost of having someone in a hospital for an extended period of time. Many surgeries are being done through outpatient these days. Urgent care Wikimedia

Bisnow: What benefits are landlords seeing with these tenants?

Todd: It really depends on the market and merchandise mix of the retail shopping center. Investors and owners have been very positive for reasons you might guess—creditworthiness. In general, many of the expanding hospital systems have robust balance sheets. When combined with extended lease terms, it makes for an attractive tenancy. Owners consequently have less attrition in their retail space, and lower overall expenses associated with having to “build out” due to turnover.

Mitch: From the landlord’s side, urgent care operators are attractive because they are strong financially, invest in their space and generate traffic to the center. Their staying power and stability adds certainty to a landlord’s tenant roster and the seven-days-a-week operations drive shoppers to other retail tenants. This new breed of retail tenant is here to stay as landlords seek to reposition centers which have suffered due to the impacts of e-commerce and retailer consolidation.

Bisnow: How has the changing healthcare landscape affected this trend?

Todd: If we’re thinking about growth industries in the US, certainly healthcare would be one of those. Think about the potential for all of the medical-related companies that have been developed over the past several years—from the financial end to outpatient services like dialysis centers, MRI facilities, surgery centers, dental and ortho, chemo centers, urgent care centers, etc.

Mitch: Take urgent care centers, for example. There are over 7,100 urgent care centers now in the US and the typical urgent care center experience includes seeing a healthcare provider in 30 minutes or less and being in and out in 60 minutes or less. Compare that to the typical emergency room visit, and you can see right there why they have become so popular. There is tremendous growth in this field.

View original article here…

Another CBM Original…

We’ve already experienced our first heatwave….

And if this first bout is any indication, this summer’s likely to be a doozy.

But whether its summer or winter, the SoCal sun is RELENTLESS.

With an average of 284 sunny days each and every year, those ultraviolet rays just never let up. And many shopping center tenants run AC year round, which puts a constant strain on your HVAC system.

Of course when summer arrives, the heat volume goes WAAAY up. And the load on your HVAC increases all the more.

Unfortunately, HVAC systems are generally ignored, until there’s a problem. And by then, it’s too late…

What Happens When Your Shopping Center’s HVAC System Goes Down?

-You’ve got a fistful of tenants screaming on the phone at regular intervals

-Every HVAC company in town is booked handling other EMERGENCY HVAC calls

-And quite possibly, your HVAC system is dead and in need of complete replacement

But there is solution that can help you avoid all of these problems: An HVAC Maintenance Program

Not familiar with HVAC Maintenance programs? Basically, you contract with an HVAC maintenance firm for regular maintenance inspection.

What are the Benefits of an HVAC Maintenance Program?

Long Term Savings

Let’s start with the cost. As you probably guessed, HVAC Maintenance Programs are not free. And many maintenance programs require an annual contract.

These programs, however, are a property maintenance expenses, and as such can be billed back to your tenants (assuming they’re on NNN leases, which of course they should be ;-).

Even if you have vacancy and must share in a portion of CAM fees, or don’t have your tenants on NNN leases, HVAC maintenance programs are still a bargain when you consider lax or inadequate maintenance are the most common cause of untimely HVAC system failure.

Rest assured, the cost of regular maintenance is certainly less than a brand new HVAC system.

Which brings us to our second point…

Extends the Life of Your HVAC

Over time, constant use, exposure to the elements, and general wear take a toll on your HVAC system.

Left unchecked, deferred maintenance can reduce your HVAC’s efficiency and ultimately result in its early death.

But a maintenance program monitors your HVAC and addresses issues as they arise. That means you don’t have to worries about a sudden HVAC system failure unexpectedly creating havoc at your property.

Reduces Energy Costs

Poorly maintained HVAC system run inefficiently. In turn, your electricity costs soar.

Sure, if your shopping center is on a NNN lease, tenants pay your electric bill. But paying higher bills due to a poorly maintained HVAC system is sure to frustrate your tenants.

And how long before for an irritate tenant is relocating to a more energy efficient shopping center?

Avoids Sudden System Failure

What happens if your HVAC system suddenly fails?

You’ll wind up frantically trying to get a contractor out to your center ASAP to inspect your system, price out a replacement, and organize installation. All of which could takes weeks, if not longer.

In the meantime, your tenants are furious about the intolerable heat. Insisting all the while it’s killing their business (and they may well be right).

With a maintenance program, however, you can completely prevent this scenario. An HVAC inspector will conduct semi-annual inspections, and warn you well in advance when your HVAC is approaching end-of-life.

Plus, when replace time comes; your inspector will help ensure you get a competitive price for a new HVAC system. And coordinate installation with as little disruption to your tenants normal business operation as possible.

What do HVAC Inspections Typically Include?

The process varies a bit from company to company, but here are the basics:

-Tightening the electrical connections and measuring voltage and current to ensure safety and avoid undue wear-and-tear on your system.

-Lubricating moving parts to avoid friction in the motors which increase power usage drives up your electric bill.

-Inspecting the condensate drain to make sure it’s free and clear to avoid water damage from a backed up condensate overflow and flooding.

-Measuring the airflow around the condenser coil to ensure maximum flow, improving your systems efficiency by up to 10%.

-Inspecting and cleaning the condenser air conditioning coils to reduce wear-and-tear on your air conditioning system.

Seeking a Qualified + Reliable HVAC Contractor?

This part is easy – Just ask your property manager.

In managing their portfolio, property managers works with many HVAC contractors, making them an excellent referral source. Best of all, property managers only refer licensed, bonded and insured contractors. A critical concern when hiring any contractor to work at your property.

Don’t have a property manager? Well…

Find Out More About CBM’s Professional Property Management

Visit CBM’s Services page to find out more about how property management can benefit your shopping center.

By SCTWeekly, Thursday, April 28, 2016

Lemonade brings California cuisine to fast-casual diners

For some, the word “lemonade” may conjure memories of childhood entrepreneurship. For Alan Jackson, the word is symbolic of California. “The simple word embodies a sense of light, simplicity and playfulness,” said Jackson, the founder, CEO and chef of Culver City, Calif.–based Lemonade Restaurant Group. “And this one-word name explains the way we think, prepare our food, serve our customers and want to make people feel. While the word is nostalgic, it is also aspirational, youthful and timeless.”

Jackson and his wife, Heidi, opened the first Lemonade restaurant in 2008, in West Hollywood, Calif., to fill a void they perceived in the local dining scene. “As a chef, when I wasn’t working, I couldn’t find anything that was flavorful, had variety, was vegetable-focused and [was] affordable or easy,” he said. “Thus I wanted to create an outpost for people to get the type of food I wanted to have daily for both myself and [my] family.”

Today the company operates 23 restaurants, all in Southern California. Roughly a dozen more are scheduled to open soon, and most of those will be in Northern California’s Bay Area. There are no table servers — diners order at the counter and then carry the meals back to their seats. This format helps create a closer connection between the restaurant and the customer, according to Jackson. “There was a picture I saw in a magazine that inspired my thinking about this connection to the customer experience,” he said. “It was of a restaurant in Turkey where a chef was leaning over the counter, steaming pots below him, talking with his guests. It was so inspirational for me.”

Vegetables are the stars of the Lemonade menu, with meat and other proteins playing supporting roles. “A lot of our menu ideas come from mistakes and ‘aha!’ moments — food I might cook at home, ideas I get [while] walking through a grocery store or dining at another chef’s restaurant,” Jackson said. “I’d say my food is influenced by Los Angeles’ melting pot of people and food.” Indeed, the menu, which changes eight times per year (twice per season) is both diverse and unconventional, featuring such specialties as avocado with heirloom tomato, pine nut and lime-cilantro vinaigrette; buttermilk-baked chicken; cucumber-mint lemonade; and watermelon radish with seared ahi tuna and snap peas.

All the restaurants are company-owned, except for two licensed restaurants — of which one is at the University of Southern California and the other at Los Angeles International Airport. The company plans to eventually license the brand internationally, though not domestically. “Our growth will mostly be corporate-store-driven both now and into the future,” said Ian Olsen, the company’s president. “Plans for growth are fairly hyper-focused on the Bay Area trade area for the next 18 to 24 months, with some SoCal in-fill. Beyond that, we’re identifying both Midwest and East Coast cities where we can begin planting some monument flags, New York City being an obvious one we’d like to get to sooner rather than later.”

Lemonade likes 1,500-to-3,000-square-foot spaces and street-corner sites. “Street-side real estate drills down into the fabric of a particular neighborhood and lets you feel the inherent heartbeat that pulsates through the veins of that village,” said Olsen. “I’ve rarely ever witnessed a mall location that can provide a similar effect, but developers are getting smarter and better at achieving this end. Pacific City, developed by DJM Partners, in Huntington Beach [Calif.], is a prime example of this. There, a very urban feel and texture was brought into a beachside mall location, creating a world-beater of a product. We’re very excited about our location there.”

Lemonade’s creative and innovative approach to California cuisine, set in a vibrant yet relaxed atmosphere, is a complementary fit for several Westfield projects, according to Adam Corti, vice president of project leasing at Westfield. “Working with their experienced team was a fun process and resulted in the execution of a colorful take on a modern marketplace,” he said. “They have, most recently, opened up with us at Westfield University Town Center and are off to a tremendously successful launch.”

View original article here…

By Globe St, Tuesday, May 3, 2016

Sports Authority Sets Auction Date, May Close All Stores

ENGLEWOOD, CO—A date has been set for the auction of Sports Authority Inc. store leases, according to court documents filed Tuesday. Judge Mary Walrath at US Bankruptcy Court for the District of Delaware has set May 16 for the auction, which follows the sporting goods retailer’s announcement that it was pursuing a sale of “some or all of the business.”

Published reports have indicated that all 463 Sports Authority stores could end up closing, although the company has not yet committed to that course of action, and that the retailer had abandoned attempts to reorganize because it was unable to get its creditors to agree on a reorganization plan. “It has become apparent that the debtors will not reorganize under a plan, but instead will pursue a sale,” attorney Robert Klyman told Walrath at a hearing last week, according to the Wall Street Journal.

Headquartered in Englewood, CO, Sports Authority filed for Chapter 11 protection this past March, citing debt of more than $1.1 billion. At the time, the company planned to shutter 140 of its stores.

It’s still proceeding with that plan, but in a statement, the retailer says the outcome of the auction process “will determine whether any additional store closings will be required.” The stores already slated for closure will not be part of the May 16 closing store lease auction, according to court documents. According to the statement, the company has received “initial expressions of interest from a number of potential buyers, and we are optimistic” about the results of the sale process.

When Sports Authority announced its original Chapter 11 filing, which had been widely expected, it cited “a comprehensive review of the Sports Authority store portfolio in light of the increasing amount of shopping that is occurring online. As a result of these changes in consumer buying patterns, Sports Authority determined that it needs fewer stores as part of its long-term business model.”

View original article here…