CBM’s Retail Shopping Center Management & Leasing Blog

Retail Real Estate News & Trends in Southern California

ICSC Report: Brick-and-Mortar Retailers Capture 75 Percent of Thanksgiving Sales

 November 27, 2017 by REBUSINESS ONLINE

Shoppers at Macy’s in New York take advantage of Black Friday deals.

Shoppers at Macy’s in New York take advantage of Black Friday deals.

NEW YORK — Retailers with a brick-and-mortar presence captured approximately 75 percent of all sales transacted over Thanksgiving weekend 2017, according to a report by the International Council of Shopping Centers (ICSC) released Monday, Nov. 27.

Combined, online and brick-and-mortar retail sales during Thanksgiving and Black Friday clocked in just shy of $8 billion, an 18 percent increase over the same two-day period in 2016, according to Adobe Analytics, which measures transactions of the 100 largest American web retailers.

On Black Friday itself, online sales eclipsed $ 5 billion, up from $3.34 billion in 2016.

The ICSC report found that over the course of the weekend, more than 145 million Americans shopped at malls and shopping centers — 105 million on Black Friday alone — where they spent an average of $377.50 per shopper.

Approximately one-quarter of the average shopper’s total expenditure went to dining and other experiences. All told, consumers spent an average of $78.70 per head at dining and entertainment destinations in association with Black Friday 2017.
NRF’s Annual November Holiday Consumer Survey, conducted by Prosper Insights & Analytics

A poll by the National Retail Federation showed that potential Thanksgiving weekend shoppers strongly preferred Black Friday, but that many would be shopping into Cyber Monday. Click image to view larger. Source: NRF’s Annual November Holiday Consumer Survey, conducted by Prosper Insights & Analytics

“Shopping centers across the country should feel very optimistic about the season ahead,” says Tom McGee, president and CEO of ICSC. “What we are seeing over the course of the year, and more so during the holiday season, is consumers’ desire to take advantage of everything a mall has to offer, whether that is dining, shopping or entertainment.”

Approximately 74 percent of shoppers spent the same or more than they did in 2016. In addition, consumers visited an average of six stores during their 2017 shopping sprees, as opposed to four in 2016.

Roughly 25 percent of shoppers capitalized on omnichannel distribution by purchasing items online and picking them up at the store’s physical location. Among those who opted for this “click and collect” approach, nearly 70 percent made an additional purchase while in the store.

View original article here…

Mom-and-Pop Shops Are Threatening the Mall This Holiday Season

By Bloomberg, November 22, 2017, 5:00 AM PST

More bad news for America’s shopping malls: Consumers are shopping closer to home. And increasingly, home is not where the malls are.

Spending growth at mom-and-pop businesses has outpaced that of the big chains in the past two years, according to Sarah Quinlan, senior vice president at credit-card giant Mastercard Inc., which tracks purchasing patterns. When they’re not shopping online, Americans are seeking more personal connections and advice — something they can find lacking at national retailers.

“The consumer is shopping small,” she said.

Big chain stores still account for the majority of shoppers’ purchases, according to Mastercard. But many of the most affluent consumers are now clustered in walkable neighborhoods, letting them skip the mall in favor of neighborhood hardware stores, bookshops and grocers. And they’re willing to pay the higher prices, Quinlan said.

That doesn’t mean malls are going away. The A-rated shopping centers — the industry’s cream of the crop — are still doing fine. But the other roughly two-thirds of malls are struggling to cope with shifting spending patterns, an aging population and the rise of Amazon.com Inc. The uncertainty has even led tenants to push for significantly shorter leases, sometimes of only a year or two.

Independent retailers and small chains have been able to step into the void. Many of them are thriving in categories like hardware, furniture and crafts.
‘More Conscious’

Holiday markets have capitalized on the trend, letting small businesses offer their wares in bustling pop-up shopping districts. Keoni DeFranco, who was shopping at a holiday market in Manhattan’s Union Square on Thursday, said he tries to support local stores when possible.

“I’ve become more conscious about what I’m purchasing and eating,” said the 29-year-old software executive. “I do a lot of browsing online, but I do enjoy going into stores and looking at what I’m buying before I purchase it.”

But local shoppers frequently have to overcome a big hurdle: price.

Since smaller businesses often can’t buy in bulk, customers typically have to pay more. Increasingly, that’s a sacrifice shoppers seem willing to make — at least when they’re shopping offline, Mastercard’s Quinlan said.

Sales growth at small businesses, defined as having less than $50 million in annual sales, was 7.3 percent last year, according to Mastercard. That compared with 4.6 percent for total retail sales. Small business purchases account for 37 percent of total spending.
Online Gains

But online growth still overshadows both the big chains and local stores.

E-commerce sales are expected to swell by 18 percent to 21 percent during the holiday season, the National Retail Federation estimates. That’s a faster clip than last year — and well above the roughly 4 percent expected for the retail industry overall.

It’s hard for brick-and-mortar chains to beat the convenience of a few mouse clicks. So they’ve promoted the idea of a retail “experience.” Smaller stores — with all their quirks and idiosyncrasies — may have an easier time offering a memorable time. They also can be more nimble in catering their selection to local tastes.

The ultimate goal for all stores is greater personalization, said R.J. Allan, head of retail corporate banking at Mitsubishi UFJ Financial Group. Getting that right means more loyalty and profit.

The bigger chains have the advantage of being able to invest in technology, including apps and loyalty programs that keep customers coming back. They also can connect an expansive e-commerce operation to their physical stores.

“Retailers that are able to bridge the consumer experience across brick and mortar and online will be best positioned for success,” he said.

The smaller stores, though, have another edge: The clerk might actually remember your name when you come in.

“I prefer to shop local when I can,” even if prices are higher, said Mary Bresette, a 66-year-old resident of Manhattan’s Upper West Side. “For me, it’s a sacrifice I’m willing to make.”

If you handle trash collection like most shopping center landlords, you contract with a private waste hauling company.

But even if you’re paying for private collection services, you’re still on the hook for the “landfill maintenance” portion of “sanitation fees” your local municipality charges your property.

Fortunately, you’re free to pick and choose from a variety of vendors waste hauling vendors. And in turn, you’re able to select a vendor that offers the most competitive prices.

Except, of course, If your property is located in the city of Los Angeles…

What’s this all about?

Recent legislation enacted by Los Angeles City government has given exclusive domain to a small group of vendors, each solely servicing a designated area. And in turn, the city has eliminated your ability to choose own service provider.

And the results thus far? The quality of collection services has declined, markedly. While costs of have jumped – considerably. In some cases, “sanitation fees” have risen by 300%.

Here’s What You Need to Know…

Department of Sanitation Franchise

At the close of 2016, the Los Angeles City Council voted to create the “Department of Sanitation Franchise.” In addition, the city council divided the city into 11 trash collection zones the newly formed Department of Sanitation Franchise would administer. The council then awarded exclusive contracts to seven companies who now service these 11 zones.

In other words, property owners who could once select from the roughly four dozen licensed trash hauling services now have ZERO choice. Instead, owners are stuck with their zone franchisee.

The Purpose of Sanitation Franchises

With multiple firms handling trash pickup, the collection process has become chaotic in many dense residential neighborhoods and commercial zones. In some locations, trash and recycling picks occur daily. And the associated noise and hazards created by numerous trucks blocking traffic and a multitude of collection bins littering already overcrowded streets have become nuisance and danger to residents, business, and their customers.

Assigning a single firm to collect trash in designated is intended to reduce this inconvenience to a weekly week, rather than daily occurrence.

Additionally, California Law mandates that 75% of city garage be diverted away from existing landfills by 2020. The city’s hope is the increased revenues the franchise system is expected to generate, a projected $3.5 billion over the next ten years, will fund recycling initiatives.

The Problem With the Franchise System

As you might expect, the lack of competition has impacted both the level service and pricing.
Since the new program was rolled out in July of this year (2017), countless property owners and tenants have reported frequent missed pickups. Moreover, missed picks that are often not credited to the property owner’s account.

Most troubling of all, prices have risen – significantly. In some cases, property owners have reported 300% increases.

Quick Case Study

CBM currently manages a retail strip center near the Beverly Center shopping mall, situated in the City of Los Angeles, adjacent to Beverly Hills and West Hollywood.
Prior to the institution of the Department of Sanitation Franchise, the 10,200 SQFT center paid $1,520 per month for weekly trash collection. The new Sanitation Franchisee now handling this property increased the fee to $3,800+ per month for the same weekly collection.

That’s a 148% increase. A significant jump the tenants now in place are unfortunately bearing the brunt of via increased Triple Net (NNN) fees.

The Fallout

The shift to the Sanitation Franchise system has caused some major problems for retail shopping center landlords and their tenants…

== > Missed collections leads an overflow of rubbish that’s not only a deterrent to shopping center patrons, it’s a public health hazard.

== > Failing to credit property owners for missed pickup is tantamount to fraud. And fraud the City of Los Angeles apparently condones.

== > Massive increases in collection fees hurt tenants most of all… The majority of retail shopping centers are leased on Triple Net (NNN) leases. Under the terms of a NNN lease, property expenses, including trash collection, are passed along to tenants. And a major increase in sanitation fees means tenants are paying considerably more every month just to cover their basic expenses.

In the case study mentioned above, tenants’ monthly NNN fees have risen by an average of $400. This jump adds up to nearly $5,000 in additional annual expenses. For retail tenants struggling to survive on already thin margins, such an increase could force tenants out of business altogether.

Landlord’s Recourse

Clearly the Sanitation District Franchise Districts initiative is a travesty that’s destined to seriously harm countless local businesses. Not to mention hinder investment in Los Angeles retail real estate.

So, what’s a landlord to do?

At this point, options are few. Your best approach is to contact City of Los Angeles elected officials that represents you in the and make your displeasure with the new Sanitation Franchise Districts abundantly clear.

Here’s how:

== > Determine who your district council person is – here. Call, leave messages, send emails, and write letters expressing your distress over the Sanitation Franchise Districts.

== > Contact Los Angeles County Supervisor, Sheila Kuehl – here. Call, leave messages, send emails, and write letters expressing your distress over the Sanitation Franchise Districts.

== > Contact Los Angeles Mayor, Eric Garcetti – here. Call, leave messages, send emails, and write letters expressing your distress over the Sanitation Franchise Districts.

Need Help Managing Trash Collection and Other Property Service Vendors?

There’s no doubt wrangling vendors is one of the most difficult aspects of shopping center management. And the fallout from the recent introduction of Department of Sanitation Franchise in Los Angeles outlined above is a clear indication of the considerable costs and frustration involved.
The good news is, CBM can help!

We’ll take change of all your vendors, including waste collection. On your behalf, we’ll ensure your vendors not only provide top quality service, but do so at competitive prices. And if they fall short, we’ll help you find new vendors!

To find out more about how CBM’s professional property management can benefit your property, visit our Property Management Services page at: cbm1.com/services

Shake Shack Poised for Biggest Growth Year Ever

By QSR Magazine, November 2, 2017

Boosted by both revenue and overall sales increases of nearly 27 percent during its latest quarter, Shake Shack is planning to open more locations in new markets throughout 2018.

During a conference call Wednesday, CEO Randy Garutti said the company plans to open between 32 and 35 new company operated locations by the end of 2018, with about 20 percent of those units expected to open in new markets. 2018 will be the biggest year of unit openings for Shake Shack to date, and will result in year-over-year unit growth between 36 and 40 percent. Shake Shack has revised its forecast of opening 24 restaurants by the end of 2017 to potentially opening 26 units.

New units will include a Shake Shack at LAX Airport and at Hartsfield-Jackson Atlanta International Airport. During the third quarter, Shake Shack entered the San Antonio market and added its second Michigan location.

While sales and revenue increased during the third quarter thanks to year-over-year unit growth of 36 percent, Shake Shack’s same-store sales fell by 1.6 percent compared to a 2.9 percent increase last year. Traffic decreased 3.8 percent.

“We’re pleased with both our top and bottom line growth in the third quarter despite the negative impact of Shack closures caused by two major hurricanes,” Garutti said, adding that the company closed nine locations for a total loss of 33 operating days during the storms.

Earlier this month, Shake Shack launched its kiosk-only, cashless store and tested a split kitchen for greater throughput. Garutti says that the company will continue to invest in these types of innovations and expects an increasing proportion of ordering to be conducted through the Shack app and delivery channels.

“Our average check via the app remains higher than in Shack,” he said. “We’re seeing encouraging return rates from our app users and while [it’s] still in the early days for us, we believe the Shack app is a really important tool for us to deepen our connection with our guests with a strategic push towards more personalized marketing initiatives to drive greater frequency and spending.”

Shake Shack launched its Hot Chick’n LTO during the quarter, and will continue to test chicken as an expanded menu category.

Garutti says that the brand has been pleased with delivery pilots and there is high demand for Shake Shack delivery.

“In terms of where we ultimately go with delivery, anything we choose to build will be with long-term sustainable economics in order to create a strong healthy business,” Garutti said. “For now, you’ll continue to see us approach this area of our business thoughtfully and strategically.”

View original article here…

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.”

7 Key Retail Property Valuation Considerations

By Bisnow, November 13, 2017

As retail evolves and adapts to a new competitive landscape, so do the criteria used for assessing property values. Retailers face new pressure to refine, differentiate and Amazon-proof their business models, often by combining excitement, digital integration and a high level of service.

Here are the top seven factors investors, appraisers and landlords should weigh when considering existing and potential retail properties.

1. Highest And Best Use In

some cases, a property may no longer be financially feasible to continue operating as a retail property. A growing number of landlords are realizing retail may not be their property’s maximally productive use, according to RSM Real Estate Valuation and Advisory Director Kenny Kim. Symbolic of this shift is the repurposing of the 676K SF Lord & Taylor flagship store in Manhattan into WeWork’s new global headquarters, with plans to convert all but the lower three levels to office. The co-working giant acquired the iconic property from Hudson’s Bay for $850M.

2. Tenant Mix Investors

historically sought retail properties with traditional anchors like Macy’s and Nordstrom because they drew a strong consumer base, Kim said. There were 34 billion visits to U.S. stores in 2010, nearly twice as many as the 17.6 billion recorded in 2013. Some forward-looking landlords are hoping to attract customers, refresh their malls and, in some cases, quadruple their rental income, by replacing these struggling department stores with a number of smaller, experiential shops. “As investor demand shifts toward malls with more experiential tenants, such as movie theaters and food and beverage, real estate appraisers or investors need to have a fresh mindset in how the preferred tenant mix impacts value,” Kim said. 7 Key Retail Property Valuation Considerations Unsplash/Shravan Vijayabaskaran

3. Retail Category

According to Kim, some property types, such as lifestyle centers, entertainment-centric malls and Class-A regional malls may continue to thrive, while big-box retail may transform into a combination of store and distribution/warehousing space. “As the integration between online presence and retail stores evolve, so too will the retail physical spaces,” Kim said. “These changes may have a material impact on rent and expense levels that drive the valuations.”

4. Co-Tenancy And Go-Dark Clauses

Kim said leases should be examined for co-tenancy and go-dark clauses, which can dramatically impact the rental income collected. A major tenant’s departure can have a devastating effect on surrounding retailers’ foot traffic and sales. Co-tenancy clauses protect remaining retailers by lowering their rents in this instance. But because the stores’ sales may decline as a result of the overall property occupancy fluctuations, the rent paid to landlords as a percentage of store sales can also diminish, Kim said. Depending on the overall health of the mall and its anticipated response to store closures, future cash flows may be significantly lower and difficult to estimate.

5. Lease-Up And Downtime

Newly developed retail properties may take longer to lease up vacant space as the uncertain competitive climate inspires greater caution, according to Kim. Historical property data and assumptions may no longer be valid forecasting tools. “Downtime and re-leasing assumptions of vacated space will require reconsideration,” Kim said. 7 Key Retail Property Valuation Considerations Unsplash/Tom Sodoge

6. Tenant Improvement Allowances And Capital Expenditures

Landlords may need to allocate more money for tenant improvement allowances to incentivize new tenants. As ambience becomes increasingly necessary to lure shoppers, additional capital expenditures may be required to update common areas and building exteriors, Kim said.

7. Investment Rates

The capitalization and discount rates are key assumption drivers of value in the discounted cash flow analysis. “As e-commerce continues to challenge retail properties, many retail assets will be in a state of being nonstabilized, and the estimation of the capitalization and discount rates will require much greater consideration,” Kim said. “An appraiser or investor will need to evaluate the risk inherent in the cash flows projected, such as the net operating income growth over the analysis period, and properly reflect market and execution risk in the investment rates.”

View original article here…

A shopping center is a valuable investment with HUGE upside potential.

But owning shopping centers isn’t like other investments. Stocks, bonds, and even stakes in startup businesses are celebrated for their “passive income” earning potential.

Shopping centers, on the other hand, require much more direct, hands-on attention. Which makes it difficult for many landlords and property investors to generate truly passive income.

But it Doesn’t Have to be This Way…

The truth is, plenty of shopping center owners enjoy the financial rewards of their investments, with little to no direct involvement.


It all comes down to having the RIGHT TOOLS. Because with property support, it’s far easier than you might think to achieve maximum returns with minimum effort.

So, What Are the “RIGHT TOOLS?”

Two things: Professional Leasing + Professional Property Management.

Here’s a closer look at how these two services can benefit landlords and property investors…

1. Professional Leasing

What do you do when a vacancy pops up in your shopping center? Well, you can certainly try and lease the space yourself… Put up a FOR LEASE sign with your phone number. And post the vacancy on a free online listing service.

But as already noted above, handling your shopping center is NOT your primary business. Which means you not only have limited time to deal with prospective tenants, you may not be entirely savvy when it comes to qualifying tenants, or negotiating retail leases.

The solution? Hire a professional leasing broker.

Here are the three primary benefits of hiring a leasing agent…

Market Exposure

Signage – A leasing agent will put up a sign, just like you would. But here’s the difference. A broker with a multitude of listings throughout your area and adjacent areas receives hundreds, if not thousands of calls a week. So, in addition to the calls on your property, your broker also receive tenant calls on the rest of their listing inventory. And if a particular vacancy doesn’t work for a prospective tenant, the broker will move them along to another space that does. Which could be your property!

Online Listing Services (MLS) – These days, landlords have access to a handful of free online listing services. In addition to posting your vacancy on free sites available to anyone, a broker will also list your property on a variety of paid platforms exclusively aimed at real estate professionals. And these platforms not only have a local and regional presence, but a national, and even international reach. This expanded coverage amplifies your property’s online exposure by 10-fold.

Active Tenant List – Most brokers, even landlord representation focused brokers, have an “active tenant list.” This is a list of tenants either actively seeking space to lease. Or tenant who would consider leasing a space if the right unit came along. Upon securing your listing, this is your leasing brokers first stop. They present the space to any tenants on their “active” list they feel would be a good fit and have a desire for the unit.

Tenant Broker Relationships – Landlord representation brokers are dialed into the tenant representation brokerage community. Landlord rep brokers are constantly pitching sites to tenant rep brokers. And when marketing a new space, a landlord broker’s second stop, after exhausting their own tenant contacts, is their tenant rep broker contact list.

Tenant Qualification

Again, managing a retail property likely isn’t your primary business. As such, are you’re probably not 100% clear on what makes an ideal tenant for your property.
A broker, on the other hand, is immersed in the retail world. In fact, brokers are busy qualifying tenants all day long. Which gives them specialized knowledge. Specifically, a broker understands…

== > The use types that make the most sense in your property’s area.

== > The uses that best synergize with the existing tenants in your shopping center.

== > And the financial position of a tenant that has the capability to not only survive, but thrive in your center.

All of which are key consideration when sourcing a tenant for your property. And one of the most important aspects of the services a broker provides.

Protecting Your Financial Interest By Drafting AIR Leases

When you find a qualified tenant who’s ready to sign on the dotted line, what lease form do you use?

You can find free forms online – But as the old saying goes, “you get what you pay for…”

You could use a friend or colleagues form – But who says the particulars of their agreement really applies to your situation?

You could hire an attorney – But at hundreds of dollars an hour, that’s a very pricy proposition. And truth be told, many attorneys don’t understand the nuances of crafting a retail lease that genuinely protects your interests. Plus, you often wind up with a document no tenant wants to sign because the attorney (serving as your paid advocate) has stilted the document too far in your favor.

Brokers, on the other hand, rely on AIR Leases – A stock format, AIR leases are accepted throughout the California commercial real estate industry and the Gold Standard of commercial lease forms.

Moreover, a broker draws on the benefit of tremendous practical experience – They’ve drafted hundreds, if not thousands of leases over their career. And they understand how to draft a lease agreement that stridently protects a landlord’s financial interests.

2. Professional Property Management

When you first purchase a retail property, the deluge of responsibility is generally overwhelming.

Suddenly… Tenant rent + CAM payments start rolling in (or, more distressingly, don’t materialize). Countless vendor and utility invoices clamor for payment. Mortgage payments are due, promptly, the first of each month. And then there’s semi-annual property tax bills. Oh, and don’t forget about reconciling your NNN fees on a bi-annual basis.

Then there’s site visitation. Maintenance + vendor oversight. And tenant relations management, which includes presiding over tenants’ endless complaints, demands, internal squabbles and so on…

Needless to say, it’s a huge job. And the task is not only time consuming, but it can difficult to grasp. Particularly if you don’t have relevant experience. Worst of all, errors, even innocent mistakes,can create ENORMOUS problems.

The solution? Hire a professional property management company.

Here are three primary benefits of professional property management…

Professional Accounting

When you’re overseeing a shopping center… Rent and CAM payments are coming in. Vendor, mortgage and property tax payments are going out. And the entire process has to be carefully document according to exacting standards defined regulatory legislation. Otherwise, you may wind up sitting down for an audit with local, state or even federal financial regulators. A position NO ONE wants to find themselves in.

Suffice it to say, most shopping center landlords struggle to stay on top of their property’s accounting. Fortunately, a management company can help. Here’s several examples of how…

Dedicated Accounting Department – A property management company employs an accounting department specifically dedicated to managing your property’s finances. This department records, monitors and tracks all incoming rent + CAM collections and all outgoing vendor and utility payments, in addition to issuing monthly mortgage payments and bi-annual property tax payments. Accounting also conducts complete bi-annual Common Area Reconciliation.

Specialized Property Management Software – The facilitate the recording, monitoring a tracking process outlined above, property management companies use specialized property management software. CBM, for example, uses a software platform called Skyline. The entire collections and payables process outlined above is recorded into. And debts and credits are reconciled monthly with property bank trust accounts.

Monthly Financial Statements – Your individual property manager, using software like Skyline, generates a monthly financial statement and property narrative. This financial statement is a detailed report of your financial position, including all funds collected and payments issues, in addition to outstanding collections and debts.

Site Visitation + Maintenance Oversight

Staying abreast of your shopping center’s physical condition is a key concern for any landlord. If your center is consistently dirty or trash frequently piles, prospective customers are likely to avoid your property. And that’s bound to aggravate your tenants. Not to mention destroy their business and send them fleeing at another property.

Additionally, if maintenance issues aren’t addressed quickly, particularly potential hazards – sizable cracks in the parking lot or sidewalk, for example – you’re likely to wind up with a trip-and-fall lawsuit, if not worse. Eradicating graffiti as quickly as possible is another major concern. Lest your property garner the wrong kind of reputation. In addition to racking up expensive fines many municipalities now levy for failure to remove graffiti.

Long term maintenance issues are another important consideration. As a property ages, large scale maintenance projects need to be addressed… Eventually parking lots and sidewalks must be repaved. Facades need to patched and repainted. Roofs must be restored. And HVAC systems must be replaced.

Meanwhile, monitoring these maintenance issues can be an endlessly time-consuming and exhausting task.

Fortunately, site visitation and maintenance oversight are two key services property management provides.

Regular Site Visitation – Your property manager will visit your shopping center on a regular basis. During visits, they will take note of sweeping and trash collection, ensuring property is clean and trash-free. They’ll scrutinize your center for potential hazards, recommend appropriate action, and hire vendors to address necessary repairs.

Monitoring Property Condition – Your manager will also monitor your center as whole, taking note of any potential large maintenance projects that may be order. For example… Parking lot or sidewalk reconstruction, roof repair or replacement, HVAC repair or replacement, in addition to ADA compliance violations, which is currently a MAJOR concern for shopping center landlords in the wake of so-called “drive-by lawsuits.”

Vendor Management

As we’re already noted, maintaining your property’s physical condition is central to preserving and enhancing your property’s investment value.
But all that maintenance requires sourcing and managing a host of vendors. So now on top of dealing with leasing, accounting, and tenant relations, you’ve also got wrangle a bevy of property service vendors.

Here again, property management comes to the rescue!

Sourcing Quality + Affordable Property Services Vendors – Thanks to the portfolio of properties managers oversee, they deal with countless vendors. As such, your property manager can help you identify competent, competitively priced vendors to service your property.

Vendor Services Oversight – Your manager will your oversee vendors’ work, ensuring they not only complete their prescribed tasks, but deliver quality service. And they’ll also take vendors to task for failing to meet their obligations.

Bidding Alternative Vendor Services – If a vendor’s quality wanes or prices rises unreasonably high, your manager will bid out alternative vendors services.

Construction Project Bidding + Oversight – If your center requires major construction – parking lot + sidewalk replacement, roof or HVAC replacement, ADA upgrades, etc… – your manager will help gather bids from qualified contractors. Make informed recommendations about your options. And your manager will monitor construction and help keep you appraised of project progress.

Tenant Relations Management

Tenants are life-blood of your shopping center – they’re literally your property’s income generation engine.

But dealing with tenants is a never-ending task, not to mention a tricky business. When it comes to your center’s function, condition and management, tenants have no shortage of concerns, complaints, and demands, which they’re all too eager to voice. There are also frequent, if not petty and often ridiculous, internal squabbles between tenants occupying a center. And, of course, the not uncommon claims of financial hardship and accompanying pleas for rent and CAM reductions.

Once again, your property manager insulates you from these issues. All tenant communications are routed through your manager. And following your instructions, your manager will adjudicate tenant demands, inter-tenant disputes, and requests for rent + CAM concessions.

Your manager effectively serves as a buffer between you and your tenants. They bear the brunt of emotionally overwrought tenants and play the “bad guy” role, sparing you the angst and consternation.

Need Help Leasing + Managing Your Shopping Center?

If you’re interested in enhancing your property’s investment value, professional leasing + property management can help.
To learn more about our leasing + management services, visit our services page at: cbm1.com/services

Centers Business Management (CBM) leasing agent, David Levcovitch, recently completed a lease transaction representing landlord and tenant, a local mattress store, on a 2,200 SQFT freestanding retail building. A Former Fast Auto Loans, the building is at the intersection of Laurel Canyon Boulevard and Tiara Street, just south of Oxnard Boulevard in prime North Hollywood. The property is just one block from the Oxnard Exit + Entrance to the 101 Freeway.

Centers Business Management (CBM) leasing agent, Kelly Harrison, recently completed a lease transaction representing landlord and tenant, a local bakery, on a 1,464 SQFT retail space. The unit is in sizable corner strip center at the intersection of Victory and Fulton in prime Van Nuys. The busy center’s diverse tenant mix includes Postal Annex, Metro PCS (cell phone sales + service) and more.