CSA - May/June 2022 by ensembleiq

May/June 2022

ICSC Las Vegas: Show Scoop SPECS Show Recap

REAL ESTATE’S NEW TECH TOOLS How data tells retailers where to go to find their best customers

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from the editor’s desk

tech viewpoint: a retail tech column

Contents VOL. 97 MAY/JUNE NO. 3

STORE SPACES

Breakout Retailer Awards: Burlington Stores, CAMP, Dutch Bros and Raising Cane’s recognized for commitment to physical store growth and innovation.

SPECS 2022 Recap: Wrap-up coverage of Chain Store Age’s 58th annual SPECS Show, the premier event for store planning/design, construction and facilities management, includes the following: OVERVIEW: • SPECS 2022 starts on a high note with inspiring keynote from Earvin “Magic” Johnson. SESSION SPOTLIGHT: • Retailers lead the drive for electrical vehicle charging stations. • Supply chain issues causing buildout delays. • Update on Title 24 code changes

COVER STORY

SMART EXPANSION: Advances in cell tower data and other technologies have opened up a treasure trove of shopper data to retail property managers. “We were flying blind for so many years,” said one. “Now we have glasses.” CSA (USPS 054-410; ISSN 0193-1199), is published bimonthly by EnsembleIQ, 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631, on a controlled basis to qualified retailer titles and architects. Real estate and shopping center owners and developers $75 per year. All other non-qualified in the United States: $80 one year; $155 two year; $14 single issue copy; Canada and Mexico: $105 one year; $185 two year; $16 single issue copy; Foreign: $115 one year; $215 two year; $16 single issue copy. Digital edition subscription: $55 one year digital; $105 two year digital. Periodicals postage paid at Chicago, IL and additional mailing offices. P OSTMASTER: Please send address changes to CSA, Circulation Fulfillment Director, 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631. Subscription changes may also be emailed to contact@chainstoreage.com, or call 1-877-687-7321. Vol. 97, No. 2, March/April 2021. Copyright ©2021 by EnsembleIQ. All rights reserved.

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Contents VOL. 97 MAY/JUNE NO. 3

REAL ESTATE

A Fresh Breath of Open-Air Outdoor shopping center operator Adam Ifshin explains why open-air is where the action is in post-pandemic retail—if you can overcome labor and supply chain issues to get your stores built.

A Dream Come True Triple Five’s Don Ghermezian on why his American Dream mega-center in the New Jersey Meadowlands will stand as a case study in the blending of entertainment and retail for years to come.

TECH

Secondary Markets Become the Primary Growth Strategy Retailers expand beyond major markets, where space is pricey and tight.

New Jersey Acts to Bring Grocers to Food Deserts New effort offers tax credits, loans and grants.

Sports, entertainment venues use tech innovations to improve customer experience.

Top Props

ICSC Las Vegas Booth Briefs

Leadership Series: Interviews with leading center developers.

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10 Under 40: Profiles of retail real estate’s rising stars

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FROM THE EDITOR’S DESK

Second Acts F. Scott Fitzgerald was wrong. There are second acts in America. And that holds true for retail companies as much as it does anyone else. Industry analysts are often quick to write off retailers that, for different reasons, find themselves struggling. But sometimes they are too quick. Foot traffic analytics firm Placer.ai apparently agrees. The firm released a report highlighting brands that fall into the written-off category. These are retailers that appeared to hit rock bottom at some point during the past two-plus years, but now hold tremendous potential to bounce back big time, according to Placer.ai. As to the reasons for its optimism, the company cited recent foot trends for the brands and the varied efforts the companies have made to evolve, which combined lay the groundwork for a turnaround. Here are Placer.ai’s retail comeback picks. Staples: The office supply giant, which has closed more than 100 stores since the start of the pandemic, seems to be succeeding in doing more with less. Its foot traffic declines have stabilized and the brand is reaching overall Yo2Y visit increases. What’s more, Staples is well-positioned to capitalize on the nation’s ongoing shift to a hybrid work environment. Its new concept, Staples Connect, provides coworking, podcasting and community event spaces geared toward professionals, teachers, and students. Party City: As consumers learn to live with the pandemic, they are also showing themselves ready to celebrate holidays and party again — both of which bode well for the nation’s biggest party goods retailer. But as Placer.ai points out, Party City is

CHAIN STORE AGE

more than just a post-COVID ‘returnto-normal story.” Party City has been giving itself a badly needed makeover, accelerating the openings of next-gen locations, what feature in-store shops for key categories, improved product assortments and improved sightlines. The retailer plans to open another 100 to 125 (both new and remodeled) next-gen locations this year. Tuesday Morning: The off-price home goods retailer is coming off a few rough years during which it filed for bankruptcy and closed nearly 200 stores. Foot traffic is still off, but visits per venue metrics for Tuesday Morning have been up in six of the past seven months compared to two years prior — even as the retailer dealt with supply chain issues, and labor shortages. But there are additional indicators that speak to the potential success of the chain’s “more focused, rightsized” retail fleet, says Placer.ai. These include the ongoing home furnishings surge and the retailer’s value positioning, both of which have fueled the growth of HomeGoods. Citi Trends: Wall Street has never looked very favorably on this value retailer of urban fashion apparel, accessories and home goods that targets African American and Latinx families. But the brand, which has made some major adjustments (and expansions) to its product assortments and is upgrading its in-store experience, appears to be on an upward trajectory. Citi Trends is committed to growth via new stores and infrastructure improvement. The retailer has invested in an ambitious remodeling program, overhauling stores to its updated CTx (Citi Trends Experience) format. The combination of store remodels, positive foot traffic trends and overall strength of the off-price sector should position Citi Trends to surprise in 2022.

Marianne Wilson mwilson@chainstoreage.com

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CHANNELS chainstoreage.com > COMMERCE > CUSTOMERS

An EnsembleIQ Publication

Corporate Office: 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631

Vice President, Group Publisher, CSA, SPECS Chairman Gary Esposito (212) 756-5118, gesposito@chainstoreage.com

Editor Marianne Wilson

(212) 756-5261, mwilson@chainstoreage.com

Technology Editor Dan Berthiaume

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Real Estate Editor and Manager Al Urbanski (646) 957-5224, aurbanski@chainstoreage.com

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Corporate Officers Chief Executive Officer Jennifer Litterick Chief Human Resources Officer Ann Jadown Chief Financial Officer Jane Volland Chief Innovation Officer Tanner Van Dusen Executive Vice President, Events & Conference Ed Several Executive Vice President, Content Joe Territo

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COVER STORY

SMART EXPANSION How data tells retailers where to go to find their best customers By Debra Hazel

n the early days of the shopping center industry, leases were signed on a napkin between a landlord and a retailer who were well-acquainted and had a gut instinct as to what might work — or so the legend goes. Fast-forward a decade or two and savvy tenants used catalog sales — or their competitors’ expansion plans — to determine new markets and locations. Those days are long gone, as landlords and tenants now rely on increasingly sophisticated technology and data to know their shoppers more intimately and locate restaurants and stores that appeal to them. “One of the things the pandemic did for us is strengthen our partnerships with landlords 8

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we had relationships with,” said Art Kilmer, chief operating officer of P.F. Chang’s, Scottsdale, Arizona. “We hadn’t taken the opportunity to reach out and partner.” Those partnerships are now being forged with more data — and more insight derived from it — than ever before, as basic demographics become complex psychographics. Simple market analyses have progressed from mere radius maps to geofencing, detailed heat maps and more with a simple goal: to not only know who’s in a property or store at any given time, but to understand why the shoppers are there, where they came from, and what they’ll do next. Understanding the Why In some respects, landlords are catching up with their tenants in terms of sophisticated data collection. Digitally native retailers have a wealth of knowledge about their customers already MAY/JUNE 2022

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COVER STORY

and expect landlords to have that same level of sophistication, observed Alan McKeon, president and CEO of Atlanta-based analytics firm Alexander Babbage. “Who is this shopping center or retail space being curated for? Older people? Younger people? A diverse market?” McKeon said. “In the past, we used to do mileage rings or drive times. Today, we use mobile data to see who’s actually visiting the property.” The key to this was improving data quality, said Ethan Chernofsky, VP of marketing at Placer.ai. He noted that even a circle radius that determines how far a shopper will drive to a property — a long-established piece of data — must become more sophisticated. More recently, the mobile phone and social media opened a new world of data that can be triangulated to gain a deeper understanding. Mobile device data analytics allows landlords to understand customer behavior beyond income and education. Even more important, data gathered from mobile

New Methods for Finding the Right Fit As COVID-19 changed traffic patterns and tenants in centers, it also changed the data managers are using to manage leasing, including determining the timing of how people use retail properties. Technology isn’t just being used to assess which tenants should be on a property, but where they should be, requiring a different set of datapoints to be considered. “You’re asking, ‘Does it fit?” observed Ethan Chernofsky, VPa of marketing at Placer.ai, Los Altos, California. “You’re asking all of these questions to assess the overall wellness of your center in a different way.” Center managers are now looking at both finding complementary uses and assessing complementary times of day, especially when considering non-retail uses. “For me, the most important thing for a gym, for example, is when it peaks,” said Sandy Sigal, CEO and president of NewMark Merrill Companies. Some are busier before and after work, others at lunchtime, he observed. That affects the mix. Medical uses need to be examined for length of stay and whether they’re conducive to cross-shopping. That fine-tuning of data obviously appeals to restaurants such as P.F. Chang’s, which loves the perennial idea of dinner and a movie or some other entertainment. “What we’ve found is that they’re very eager to create entertainment centers,” said Art Kilmer, chief operating officer, P.F. Chang’s, Scottsdale, Arizona. “We fit right into that strategy. “It has actually created some demand for us, which is great. The hard thing is pinning down who the co-tenants are going to be.”

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phones is based on actual, rather than potential shoppers. Heat maps can tell landlords the busiest areas of a project and traffic patterns that can help them track the customer’s journey through a property. “Understanding the trade area is just the gateway, the start of the process,” said R.J. Hottovy, head of analytical research of Placer.ai. “The next layer deep is understanding the makeup of the customer.” More than Traffic Property managers and marketers have long tracked how many shoppers are on their property at any given time. But what they did once inside was often a mystery. Now, however, thanks to geofencing and other systems, they have much “One of the things the more intimate detail. pandemic did for us is This has been especially important during and strengthen our partnerships after the pandemic, with landlords we had when customers were relationships with. We hadn’t willing to drive a bit further to consolidate taken the opportunity to multiple trips into one reach out and partner.” or two, with greater determination. Art Kilmer, P.F. Chang’s “Traffic is still down some, but sales are up,” said Daniel Goldware, senior VP of leasing at Trademark Property Company, Fort Worth, Texas. “People are going in, buying more when they do shop. They’re not browsing.” Not all trade areas are equal. Projects from Steiner + Associates, which include Easton Town Center near Columbus, Ohio, have always had larger-than-typical trade areas, up to 100 miles, observed Spencer Jordan, VP of leasing. “The new data sources make it easier for us to obtain that information,” he said. “We’ve gone from standing in the parking lot with manual counters to knowing what percentage of our customers come after leaving work.” And markets change. A project in a market with a large proportion of young professionals might want to focus more on experiences, Trademark’s Goldware observed. “Demographics have now turned into psychographics to understand where people are in their life,” he said. Because of e-commerce, retailers are cutting back on the number of stores they locate in any individual market — even in large ones such as Los Angeles – so data can help them, said Colin Shaughnessy VP of leasing at Unibail-RodamcoWestfield. Then COVID-19 altered shoppers’ mindsets. Customers ordered online and consolidated trips to physical stores for safety and convenience. The result is that some retailers closed many stores, while others are opening fewer physical locations, seeking more productivity. “COVID-19 gave us an opportunity,” Shaughnessy said. “Instead of having 8% [turnover], we now have 20%, so we now MAY/JUNE 2022

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COVER STORY

“The brightest days of what we do are ahead of us. We were flying blind for so many years. Now, we have glasses.” Sandy Sigal, NewMark Merrill

have the space to really do something cool.” Retailers, too, are rethinking their strategies. “Coming out of COVID-19, among the large retailers, the strong have gotten stronger,” Placer.ai’s Hottovy said. “A lot of middle markets will need those technology tools. A lot of tools will help level the field.” And the effects of COVID-19 linger, as many major metro areas still see people working from home more frequently. This completely upends the traditional hours of retail and dining. “If people are working from home, your center has the ability to pull a shopper out at 2 p.m., an opportunity you didn’t have two years ago,” Placer.ai’s Chernofsky said. With indoor dining closed in many markets, restaurants completely reconceived their businesses, and that legacy remains. P.F. Chang’s has long worked with software company Buxton to provide possible locations based on its loyalty base and demographics. The company is also adding easy access to third-party delivery, added COO Kilmer. Landlords also know not only what works in their centers, they know how stores in their centers are performing vis-a-vis other locations. By examining social media, they can understand what guests are saying during and after their visits. Is their Nike store the best in the state, allowing them to quantify for new leases? Tech can tell them. “In the old days — 10 years ago — you had to walk every place, take some notes, some pictures,” observed Sanford (Sandy) Sigal, CEO and president of NewMark Merrill Companies and an early investor in proptech. “In today’s world, I can do that from my desk — I know the No. 1 store in the chain. I can do a whole trade area analysis.” What Comes Next? Mostly, landlords and tenants are happy with how much data they have; turning it into knowledge and insight is the real challenge. “The information we wish we had, we now have,” Sigal said. “And we don’t know what to do with it.” Not surprisingly, landlords would like more insight into their tenants’ sales — their real-time knowledge ends after the shopper enters the store or restaurant. Where is the spending coming from? The store itself?

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Online, only to see the physical space as a showroom, fulfillment or return location? Sentiment, Sigal said, drives traffic, which in turn drives sales, which drives rent. Knowing sales is the hard part. “At best, I know sales going backwards,” he said. “What matters is how many people come, how long they stay, do they visit other retailers and the basket size. Are they happy or ambivalent about their experience?”

“We’ve gone from standing in the parking lot with manual counters to knowing what percentage of our customers come after leaving work.” Spencer Jordan, Easton Town Center

Another technology that exists but needs greater reliability, according to Steiner’s Jordan, is the ability to summarize a shopping trip. Landlords know when someone enters the property, but where does a shopper who visits Retailer A go afterward? What stores complement each other? Are there surprises to be found? “We always merchandise into districts,” Jordan explained. “Retailers have always been vocal about preferred co-tenants, but it would be interesting to see if there are interesting connections between opposite brands.” P.F. Chang’s has already discovered interesting and surprising synergies in its analysis. Movie theaters and other higher-end dining experiences such as a Seasons 52 can be reasonably assumed as good co-tenants. But watches? It’s true. “Some of our best locations have a Sephora or Fossil nearby,” Kilmer said. “Give us a good Lululemon. That’s our guest and demographic.” Supplanting Instinct? So, in light of all this data, is there still room for the educated guess? Absolutely, said Placer.ai’s Chernofsky. “The transition we’re seeing in data is that it’s not about bringing something new to the space; it’s allowing people to articulate what they felt before,” he said. “A lot of what data is doing is allowing scale and affectedness to processes that were already happening and weren’t being articulated well.” Steiner’s Jordan agrees. “I would say that customer datapoints enhance our merchandising decisions — what we knew from traditional market research or walking our centers day to day is now supported in that data,” Jordan said. “Customer datapoints and geofencing have backed up what we’ve known to be true living in our markets.” Even so, there are occasions where the gut still overrides the data. “There’s a place for gut, but you want to have an informed gut,” NewMark’s Sigal said. “The brightest days of what we do are ahead of us. We were flying blind for so many years. Now, we have glasses.” Debra Hazel is a Las Vegas-based business writer.

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STORE SPACES

Breakout Retailers:

The Winning Lineup

CSA’s annual awards program honors growth, innovation in physical retail By Marianne Wilson Four forward-thinking brands were honored with Chain Store Age’s annual Breakout Retailer Awards, which recognize retail, restaurant and specialty concepts that are investing in innovation and growth in the physical space. Burlington Stores, CAMP, Dutch Bros and Raising Cane’s Chicken Fingers made up this year’s winning lineup. The awards presentation, sponsored by Stantec, was held at CSA’s 58th SPECS Show, in Grapevine, Texas. Executives from the four brands shared insights into their companies during a special panel discussion. Representing their companies were: • Dan Marihugh, VP, store innovation, Burlington Stores; • Charlie Kwalwasser, chief commercial officer; CAMP; • Aaron Harris, VP of development, Dutch Bros; and • Jorge Rodriguez, director of remodel construction, Raising Cane’s Chicken Fingers. Here is an overview of this year’s Breakout Retailer award winners.

Burlington Stores The off-price retailer is thinking smaller to get bigger, energizing its business with an innovative new store prototype that comes in at about 30,000 sq. ft. or smaller, which is about half the size of a Burlington legacy store. The new format, which has a modern, upbeat look, pays multiple dividends for the retailer, allowing it to operate with leaner in-store inventory, lower occupancy and operational costs, and an increased pool of potential real estate sites for new

locations. The format is proving more productive and profitable. Burlington is firmly committed to investing in physical stores. It has ramped up store growth and expects to open some 120 new locations in its current fiscal year.

CAMP It’s all about the experience at CAMP, which helps families answer the question, “What should we do today?” Launched several years ago, CAMP offers a unique shop/play experience that combines retail with themed family-friendly activities. In many of its locations, patrons enter the activity play space through a magic door in the retail area, which is billed as The Canteen. The themes at CAMP rotate on a regular basis and differ by location, with a merchandise lineup to match. And no two stores are exactly alike. Last summer, its Manhattan flagship was transformed into the digitally enabled Cosmic Camp, which used augmented reality and projection mapping technology to transport customers to the outer galaxy. Most recently, the brand entered into a partnership with Disney to open Disney-themed experiences at several locations. CAMP is just getting started. It has nine locations, including its new store in Los Angeles at Century City. The company hopes to double its store count annually.

Dutch Bros The Pacific Northwest›s cult-fave, drivethough-only coffee chain, Dutch Bros,

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is on a roll. The company has grown from about 250 stores to more than 500 hundred in just under six years. The company, which went public last summer with a valuation of $3.8 billion, sees the potential for 4,000 locations over time, with the majority of its growth to be company-owned stores. It expects to open about 125 sites this year. Dutch Bros, which roasts all its own coffee, pioneered the coffee drive-thru concept. Nearly all its locations have either a single or double drive-thru, with some incorporating multiple lanes. Many also have walk-up ordering windows and open-air patios for seating. Only a handful have indoor seating areas.

Raising Cane’s Chicken Fingers When Todd Graves was looking for help to start his business, he was told the same thing again and again. “Serving only chicken finger meals just won’t work.” Undeterred, Graves worked various jobs, and eventually used his own money to open the first location. Today, Raising Cane’s operates some 600 locations in 30 states — serving only chicken finger meals and sides. January 2022 marked the start of an aggressive year of growth for Raising Cane’s, with plans to open 100 locations across 10 new markets. The expansion includes its first-ever location in New York City, an 8,500-sq.-ft. flagship in Times Square. Similar to Dutch Bros, the majority of Raising Cane restaurants are company-owned, and that will remain the company’s primary growth model. MAY/JUNE 2022

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CSA’s SPECS Show Puts Spotlight on Store Development By Marianne Wilson

Earvin “Magic” Johnson, five-time NBA champion and chairman and CEO of Magic Johnson Enterprises, delivered the opening keynote.

Physical store development and facilities management took center stage as the country’s top retailers and suppliers involved in the planning, design, construction and maintenance of stores, restaurants and non-traditional concepts gathered at Chain Store Age’s 58th annual SPECS conference. The three-day event, held March 20 - 22 at the the Gaylord Texan Resort & Convention Center, Grapevine, Texas, brought togeter all sectors of the industry, from discounters, specialty stores and supermarkets to convenience stores, home-improvement centers and more. Restaurants were also in attendance. The show combined dynamic keynote addresses, insightful educational sessions and plenty of networking opportunties with an exhibit floor that featured the latest products and services. “SPECS is designed to provide the critical solutions and services needed to compete in our ever-changing landscape,” Gary Esposito, SPECS chairman and VP, Chain Store Age, said in opening remarks at the show. “Whether you are a retailer, supplier, contractor or architect, the goal is to learn, share ideas and develop lasting business partnerships.” Keynotes: The opening keynote was given by Earvin “Magic” Johnson, five-time NBA champion, Hall of Famer and influential investor via Magic Johnson Enterprises (MJE). During his spirited and inspiring address, Johnson discussed his journey in sports, as well as his role as chairman and CEO of MJE. 16

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“Your competition can make you better,” Johnson told attendees. “And I believe you can do well and do good at the same time.” Johnson also urged attendees to consider building in urban centers. “I see more opportunities in urban American that we’ve had in a long time,” he said. “The spending power is there…the disposable income is there.” In another keynote presentation, Ken Gronback, a leading demographer and futurist, discussed how demographic and societal trends will unlock new retail opportunities in the years to come. “The best days for U.S. physical retail are ahead of us, not behind us,” he told attendees. “But you have to stand for something other than money because the culture demands it.” Sessions: The event included more than 20 targeted educational sessions across multiple tracks. Developed with direct input and guidance from retailers, the content was focused on the latest trends and technologies transforming the design, construction and maintenance of physical stores and restaurants. New this year was a track dedicated to the challenges and opportunities facing retail real estate professionals. It included sessions on tenant/landlord relationships, leading-edge shopping center designs and expanding retail brands. “The educational content at SPECS is designed to provide our attendees with best practices and actionable insights that they can use when they return to their jobs The show also featured the presentation of Chain Store Age’s annual Breakout Retailer Awards, which recognizes retail, restaurant and non-traditional specialty concepts that are investing in growth. Five brands were honored: Burlington Stores, CAMP, Dutch Bros and Raising Cane’s Chicken Fingers. The awards were sponsored by architectural and design engineering firm Stantec. SPECS also provided attendees with three days of business partnering, collaboration and networking opportunities in sessions, at meal functions and on the exhibit floor, which featured a diverse array of solutions and services designed to provide a better in-store experience for customers and maximize operational efficiencies. Chain Store Age has announced that SPECS will return to the Gaylord Texan Resort & Convention Center next year. SPECS Show 2023 will be held March 19 – 21. MAY/JUNE 2022

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Gary Esposito, SPECS chairman and VP, Chain Store Age, welcomed attendees to the 58th annual SPECS Show.

Breakout Retailer Awards (L to R): Gary Esposito, CSA; Dan Marihugh, Burlington Stores; Jorge Rodriguez; Raising Cane’s; Marianne Wilson, CSA; Charlie Kwalwasser, Camp; Aaron Harris, Dutch Bros., and Jay Baptista, Stantec.

Ken Gronbach, a leading demographer and futurist, discussed how demographic and societal trends will unlock new retail opportunities.

Retailers and suppliers talked business one-onone at the information exchange.

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SESSION SPOTLIGHT:

Retailers Drive Forward With EV Charging Stations

By Dan Berthiaume Offering customers electric vehicle (EV) charging stations is a way retailers can get involved in the renewable energy wave of the future – today. A dedicated session at SPECS “EV Charging Stations,” provided attendees with insight into how locating electric vehicle charging stations in store parking lots can get retailers ahead of what is destined to be a sharp adoption curve for renewable energy. Dan Garneau, site development manager for Kum & Go, explained how the Iowa-based fuel/convenience store chain prepares every location with the infrastructure needed to add EV chargers (if there should be enough demand) and evaluates the unique EV charging needs of different markets. (Kum & Go operates roughly 450 stores across 11 states in the middle of the country, and will enter three new states this year.) “There is a huge movement toward EV charging in retail,” Garneau said. “The question for Kum & Go is, how as a company do we grow and also do what’s responsible in terms of the environmental situation?” According to Garneau, customer demand for on-site EV charging at stores is real. But it can vary quite a bit depending on a particular store’s location. “There is a lot of request for EV charges at fuel sites in Colorado,” he said . Garneau added that an individual store in Colorado may charge 200,000 hours per year, while a store in Iowa might charge 600 hours per year. He also noted that not all EV chargers are created equal. “We’re at the same point with EV chargers where we were with wind turbines in the 1970s and 1980s,” he said. “Faster chargers are more expensive. Partner with the manufacturers.” In addition, Garneau said that retailers often don’t consider the extra electricity their store sites will need to generate to support EV chargers. But they should. “Usually our stores with EV chargers have their own transformer,” he said. “It’s a given.” Public-private partnerships Victoria Sheehan, commissioner, New Hampshire Department of Transportation, told attendees that the New Hampshire state government is looking to partner with retailers and other private businesses to further deployments of EV chargers. “As a result of the infrastructure bill that President Biden signed at the end of 2021, there is an executive order for 500,000 18

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Left to right: Victoria Sheehan, New Hampshire Department of Transportation; Leendert Jan Enthoven, BriteSwitch; Dan Garneau, Kum & Go

EV charging units to be deployed across the country,” she said. However, due to federal regulations, the New Hampshire Department of Transportation can only install EV charging units on “alternate fuel corridors,” a category of roadways that excludes interstates or divided highways. “The New Hampshire Department of Transportation can only install EV charging units on turnpikes, because they predate interstates,” Sheehan explained. “We are prohibited from generating revenue on our other roadways. We need the private sector involved to create a holistic network that truly meets the public’s needs.” And the public need will soon rise substantially, according to Sheehan. “Ford will spend $22 billion through 2025 on plug-in hybrids or battery electric vehicles,” she stated. Navigating EV charger rebates Leendert Jan Enthoven, president of BriteSwitch, which finds and captures any rebates and incentives for commercial buildings across the U.S. and Canada, discussed the different types of rebates available for EV charger projects. “They are very different from energy efficiency rebates,” he explained. “The five main sources are utilities, city, county, state and federal. Main rebate categories are fixed dollar amounts for the EV charging equipment and ‘make ready’ rebates for electric infrastructure.” According to Enthoven, availability of EV charger rebates varies widely by geographic region. “New England has a wall of rebates,” he said. “California air quality districts will give money. Twenty-two states have statewide EV rebate projects.” Sheehan said that New Hampshire will reimburse retailers up to 80% of the cost of installing new, fast-charging EV units. She advised retailers to carefully lay the groundwork for EV charger implementation projects with local authorities. MAY/JUNE 2022

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SESSION SPOTLIGHT:

Expansion: Pricey, Problematic. But Profitable L to R: David Plunkett, T-Mobile; Chris Ressa, DLC; and Andy Thompson, Walgreens

By Al Urbanski Lease signings are way up in brick-and-mortar. But what’s not going up very quickly or cheaply are new stores and space buildouts as supply chain issues cause severe buildout delays. That was the message brought home by speakers at the SPECS session, “Space Utilization: Conversion From Retail to Fulfillment & Co-Occupancy.” “Following our merger with Sprint, we committed to opening a bunch of new stores in small, rural markets, but building costs are continuing to grow in these markets where we’re not generating the revenue we do in bigger markets,” said T-Mobile’s director of retail real estate David Plunkett. “Not only is it difficult to find this real estate, but then to be told that it’s going to cost a

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million dollars to build a 2,000-sq.-ft. store, well, it’s absolutely insane right now.” Another member of the panel, Andy Thompson, senior director of retail programs and construction management at Walgreens, reported seeing buildout lead times increasing from a historical average of about 10 weeks to 25 or even 30 weeks. “We have a hard time accessing shelving and metal fixtures,” he said. “It’s a shock to the system. It has a big impact on us being able to deliver on leadership’s plans because our materials are sitting on a ship outside of Long Beach and the labor costs to get them unloaded are significant.” Reconsidering Store Sizes The two retail executives, who together manage more than 17,000 stores, said that supply chain and labor challenges as well as demographic trends have caused them to begin to re-think the sizes, locations, and content of their store. T-Mobile’s Plunkett said that while customers still like to come into stores and talk to associates before buying a phone, his company is considering installing Amazon-style pick-up boxes for online sales of accessories. Walgreens is beginning to rethink the size and location of its stores. In less-dense neighborhoods, the nation’s second-largest drug store chain has opened about 60 smaller locations of only 2,500 sq. ft. that focus on pharmacy prescriptions. “This is a major cultural shift away from our typical 14,000-sq.ft. corner box, where we were always worried if a customer could buy Pampers or have a choice of nine different shaving creams,” Thompson explained. “What’s been interesting about COVID is that it’s changed our view of the locations we’ll consider.” Walgreens has found it doesn’t always need be on the corner of Main and Main anymore, according to Thompson. MAY/JUNE 2022

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“These smaller stores have drive-thrus and a small selection of key front-end items,” he said. “And the reception we’ve gotten from customers has been wonderful.” At some of its large stores, Walgreens has taken space and, in partnership with VillageMD, a primary healthcare provider with nearly 200 locations in shopping centers, opened “Village Medical at Walgreens” primary care clinics. (As of October, 2021, Walgreens has a 63% ownership stake in VillageMD.) “We started looking at how we were performing in different locations and considered different forms of store optimization,” Thompson said. “The Village Medical venture is a pretty dramatic change for us. They’re doing well in locations that we might have left because front-end sales were low.” The lone landlord on the panel, COO Chris Ressa of DLC Management Corp., predicted that market-leading brands like T-Mobile and Walgreens will continue to expand their brick-and-mortar profiles despite troublesome and expensive supply chain and labor challenges. “My No. 1 prediction for this year is that more online stores will close than physical stores,” said Ressa, who mentioned that DLC has signed several leases during the past few months for locations that haven’t been built yet. “Here’s how I arrived at this premise,” continued Ressa. “There are 2.5 million online stores. The top 10 represent 70% of all online sales. So you have a few million online sellers trying to grab at the remaining 30%. Meanwhile, about 85% of all retail purchases are made in a store.” Ressa expressed the opinion that brickand-mortar’s share number was not likely to falter from that lofty mark because consumers can’t afford to pay for the shipping of their online purchases and retailers cannot make a profit if they ship it to them for free. “People talk about the store as an experience,” Ressa said. “I think about it more as a place where you can make a profit.” CHAINSTOREAGE.COM

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SESSION SPOTLIGHT:

Title 24 Code Update

By Marianne Wilson

January 1, 2023. That’s when the most new code update to California’s Title 24 (The California Building Energy Efficiency Standards) goes into effect. Henderson Engineers’ Brian Alessi, sustainability director, and Brent Felten, retail sector client relationship director, discussed the most significant changes in the code and their impact on retailers at the SPECS session, “Title 24 Update: What Does it Mean for Retailers.” “The majority of T24 is written to address new construction, but if the scope of work in a renovation project includes any of the energy related systems or components addressed in new construction those systems would need to meet the

requirements of the code,” Alessi said. One of the Title 24 updates that retailers need to be aware of within the building envelope involves new requirements for fenestration by climate zone and air barriers in all climate zones. “For metal framed walls, the options will be limited to reach the finish line,” added Alessi. “More insulation will be needed on the outside of the building envelope, impacting windows and more.” With regards to mechanical systems, a big change is coming for heating boilers, which will need to be 90% efficient when between 1 and 10 million BTUh or combined total of 1 million or greater. The use of high-efficient boilers will also

affect interior air handling equipment sizing. (If the renovation project scope of work includes replacing a boiler, the new boiler would need to meet the new T24 requirement.) Electrical: On the electrical side, lighting power density was reduced for several building types, including grocery, which went from .95w/sq. ft. to .90w/sq. ft.. Retail remains unchanged at .90w/sq. ft . Also, outdoor lighting power allowances have been reduced for certain areas., which means prototype outdoor lighting designs may need modification to comply with code via more efficient light fixtures or reduced light levels. In other electrical changes, PV systems are required within prescriptive requirements with reasonable exceptions, with two calculation methods to determine PV system size. And battery storage systems will be required within prescriptive requirements (unless the building meets exceptions).

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LAS VEGAS

SHOW SCOOP • Don Ghermezian on American Dream • Don Casto on retail properties post-pandemic • Fred Meno on mall redevelopment • Matthew Beverly on community involvement • David Hinkle on the unique role of outlet centers • Joe Coradino on 21st Century malls

Adam Ifshin

on the age of open-air

• Stephen Lebovitz on retail in the Twenties • Geoff Mason on post-pandemic development

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ANALYSIS

A Fresh Breath of Open-Air Open-air shopping center operator Adam Ifshin of DLC Management Corp. says that omnichannel retail now depends more than ever on brick-and-mortar. BY ADAM IFSHIN

wo years after COVID-19 shuttered everyone in their It’s getting harder to pencil in a leasing deal, but we find new ways homes, had shopping center tenants questioning their to get it done for our retailer clients. It’s come to a point where our survival, and got pundits holding funerals for brick-andtenants are going to have to either pay more rent or do more of the mortar and predicting e-com dominance, a remarkable realization work themselves--or pay for it themselves and value-engineer their occurred. The pundits were dead wrong. Online sales hit a high specifications. We are seeing a multitude of variations of meeting point of around 15% of total retail sales and stayed there. Physical these challenges by continuously partnering with our retailer clients. retail, it turned out, proved itself to be the essential engine of the Smart retailers have adjusted their thinking and their normal omnichannel machine. operations to accommodate the situation. One forward-thinking As we predicted at DLC in the fall of 2020, The Store Won. tenant of mine from a retail chain with more than a thousand In 2022 at DLC, as an owner-operator of more than 70 open-air locations told me he’d bought the entire production of the specific centers in the eastern half of the United States, I am drawn to conHVAC units he uses from one manufacturer. He told us, “This is clude that open-air is the chief piston in that engine. In Austin, we acwhat I’m paying and you’re going to buy a piece of my guaranteed quired a shopping center on March production.” And that’s what we 30 and we signed an anchor lease did. His company had told Wall “If you’re a retailer who’s the very next day. Some top fitness Street that they were going to brands succumbed at the start of open a certain number of stores contemplating passing on your the pandemic and filed for Chapter and they intended to do it. We’ve option to renegotiate a lease in 11. Yet in the last few months we built or are building eight stores signed multiple leases with Planet for them by working together to open-air, I’d urge caution. Your best Fitness, and have additional leases defeat the supply chain. bet is to exercise that option or pending with Planet, Crunch, and LA Despite the terrible tragedies of people like me are going to lease Fitness. Truly, I can’t remember the the pandemic, some things came last time a retailer went to committo the next brand for much more.” out of COVID that we think are tee with a lease deal we negotigood for the future of our busiated and didn’t come back with an ness and the industry. In investapproval. We are averaging three-to-five new leasing deals per week, ment circles, retail is now recognized as multiple, distinct, sub-asset an historical amount. The market has done a 180-degree turn. We’re classes. There’s open-air retail, malls, and urban street retail. We running out of boxes to lease. at DLC benefitted from that because Wall Street has separated Everyone in retail real estate is aware of the chief challenges we face open-air from the mall sector, in which the default rate on loans now: supply chain and inflation. If you’ve been doing this as long as I was terrible. This is drawing capital AND tenants to our sector. We have, you’ve dealt with inflationary periods many times in the past. have done several deals with brands like Old Navy, Ulta, The Buckle, Today’s supply chain issues are simultaneously expanding lead times Signet Jewelers, and Bath & Body Works that moved out of malls and crushing profit margins for those of us who build and maintain to relocate in our open-air centers. This trend is still early days. We shopping centers and the tenants who inhabit them. It’s forcing more expect significant net absorption from mall to open-air transplants. of us to become more resilient and agile in how we deal with the scarIt’s become hard to find large open spaces in open-air centers over city of materials and labor and how we get spaces built out. the past year. Brands like At Home, Macy’s Backstage, Burlington, We made a deal with a tenant who ran a Wingstop restaurant in Floor & Décor, and Dollar Tree that started their expansions sooner one of our Texas centers who wanted to relocate to a bigger space. are sitting in their spaces. If you’re a retailer who’s contemplating He’s doing a great business and knew he could do even more in a passing on your option to renegotiate a lease in open-air, I’d urge bigger space into which he could fit more fryers. So we make the caution. Your best bet is to exercise that option or people like me are deal and, not long after, he comes back to us and asks to delay it going to lease to the next brand for much more. for four months. Now that he had the extra space, he couldn’t get May you all have a happy and healthy rest of 2022! the extra fryers! Wait times for specialty equipment have become ADAM IFSHIN is the CEO of DLC Management Corp, which owns and extended by months and months. Even the lead times for basics like steel joist has ballooned out to as much as 40 weeks!

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operates more than 70 open-air shopping centers.

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DEVELOPERS

A Dream Comes True

Don Ghermezian tells Chain Store Age the story of American Dream is just beginning.

t can be said that the Ghermezian family and their company, Triple Five, invented retail entertainment forty years ago with the opening of West Edmonton Mall, featuring a theme park, a water park, an ice rink, and an indoor lake complete with a dolphin show and 4 fully functioning submarines. They then duplicated the concept at Mall of America and, later, in New Jersey. There, with American Dream, CEO Don Ghermezian is taking “retailtainment”—and retail itself—to new levels. We sat down with him to discuss his latest bold undertaking.

retail entertainment center with such a wide array of offerings that there is something for everyone to come for and revisit on a regular basis. Everyone can visit and have a fun-filled day exploring our plethora of attractions, retail stores, and dining options. The more discriminating shopper can spend the day at The Avenue, our premier luxury retail collection, shopping at Hermès and Saks, dining at world-class restaurants, be chauffeured in one of our Rolls-Royces, or flown in one of our helicopters to and from our helipad.

Before we get into the strategy driving what you’ve presented the public at American Dream, what’s the foot traffic like over there?

How does your entertainment ring the registers in your massive retail galleries?

During the recent Spring Break, our 11,000 parking spots were full by noon with over 160,000 people having visited our center daily. A recent guest survey learned that 92% of guests have visited American Dream four or more times since their first visit, an absolutely mind blowing statistic.

Your entertainment venues are what bring a lot of them to the property, yes? Give us a rundown of what you have there.

American Dream features world-class attractions such as Nickelodeon Universe Theme Park, DreamWorks Water Park, an NHLsized ice rink, Big SNOW — North America’s first and only indoor ski resort, Seal Life Aquarium, Legoland Discovery Center, and two 18-hole miniature golf courses, just to name a few. This month, we opened the Dream Wheel, a 300-foot observation wheel that provides exceptional views of the NYC skyline. We have hosted thousands of birthday parties this past quarter and are well on track for over 10,000 parties this year.

In planning American Dream, did you start with a concept that would define the project?

Yes, at American Dream, we American Dream CEO Don Ghermezian envisioned and brought to life a

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Our hundreds of retail stores are surrounded by top-tier weatherproof attractions bringing in local residents, domestic and global tourists, corporate groups, as well as celebrities every day of the year. The foot traffic generated by our attractions brings in masses of people in numbers unparalleled in the retail center world.

Some of the stores national chains have opened there are among the biggest they have, correct?

Our flagship Zara store is the largest in any retail center in the world. We have New Jersey’s only Saks Fifth Avenue, Hermès and Saint Laurent flagship stores, It’Sugar -- the world’s first and only candy department store, a flagship H&M, the largest Primark in the United States, a 25,000 sq. ft. Uniqlo store. Toys”R”Us bypassed Fifth Avenue and Times Square to open their only store in the United States here at American Dream. Apple and Gucci are opening flagship stores in the near future. Saint Laurent is doubling the size of their current store.

What else is still under development?

A a 45,000 sq. ft. Hasbro-themed family entertainment center, a Skip Barber go-karting race track, a rock-climbing gym, a trampoline park, an escape room, the New Jersey Hall of Fame, a live exhibition center, two hotels, a movie theater, two new museums, a penguin habitat, a 3,000- seat performing arts center. Recently, following sold out shows by Tiësto and Steve Aoki in our theme park, Live Nation approached us to form a partnership to activate exclusive entertainment through American Dream. We had over 250 events in Q1 alone and with the Live Nation partnership and anticipate that number to grow to over 2,000 annually.

Previous developers failed at their attempts to develop this property. How’d you get it done?

We were able to harness 40 years of experience, a well-developed operating system, and a highly professional executive team to replicate the successes at our other centers. MAY/JUNE 2022

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ANALYSIS

Secondary Markets Become the Primary Growth Strategy Was brick-and-mortar bound and gagged by the pandemic? Hardly. Key market locations are being fought over and retailers are heading to smaller markets in order to grow. BY BILL WRIGHT

hysical retail has been tested in recent years, from the growth of e-commerce to the impact of COVID restrictions on non-essential stores. Many have questioned whether brick-and-mortar can continue to thrive in the years ahead. Well, 2021 answered that question with a resounding “yes” when the sector delivered its best performance in five years. According to CBRE, retailers aggressively added locations last year, accounting for 99 million square feet of net expansion nationally, the highest total since 2016. The amount of retail space available tightened and rents rose 1.6%, thanks in part to curtailed retail construction in recent years. This doesn’t sound like a doomed sector. Landlords sitting on prime locations in top-tier markets found that they had multiple deals to choose from. And retailers found they sometimes had to outbid rivals for coveted space. Within this competitive environment, retailers have shifted strategies to target secondary markets for new expansion plans. Previously, if a retailer planned to open 10 stores, they may have only looked at primary markets. Now, a retailer may split these stores evenly between secondary and primary markets or open the majority in secondary markets. CBRE’s transaction activity reflected this in 2021: more leasing growth in secondary markets. Why is this a viable approach to increase retail sales? There are several reasons. 1. Population Shifts. COVID changed the way we live and work. While offices and urban centers still play a vital role in our future, many people have realized that they can work from different locations. Population movement generally led out of several urban cores during the pandemic and into many secondary markets and suburbs of major cities. This activity has bolstered markets like Austin, Phoenix, Nashville and Tampa. Retailers are now looking to these markets to capitalize on these changing demographics. 2. Minimal Brand Building Needed. The expansion of e-commerce has benefited retailers in many ways, including better brand awareness. Even if a retailer lacking a physical store in a given city or state, its name can still be well-known by consumers there who’ve shopped its e-commerce channels. Retailers use these channels to pinpoint where their customers are and 28 SHOW SCOOP

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add stores there. This allows them to open fewer but better locations in a new market, rather than taking a blanket approach relying on traditional signage. 3. Less competition. As previously mentioned, choosing to open new stores in several secondary markets rather than one major market gives retailers flexibility and limits the competition they face. Rather than entering a bidding war for one property, it’s best to look at several across multiple markets and find better price points. Of course, each retailer will have a different take on which new markets are the best for growth. For those looking to expand, these are some of the top considerations. Demographics and psychographics include traditional factors like population, income, education, and employment, as well as behavioral insights such as expenditures, leisure activities, and media preferences. Analyzing this robust population data can provide retailers deep insights into their best customers. Massive mobile data is aggregated data used to track the movement of mobile devices. That can be translated into actionable insights about the aggregate movement and shopping habits of entire trade areas of customers. For example, massive mobile data can reveal how far and how often customers travel to a retailer’s stores. An analysis of all of these factors helps to guide a national development blueprint to identify and prioritize optimal markets for development—including those outside major metropolitan areas. Secondary markets are gaining clout within the retail sector. With the help of technology and data, retailers no longer are beholden to gateway markets for brand awareness. Throughout the next several years, we will witness retailers taking advantage of the elevated mobility of the U.S. population to follow their customers wherever they might be. BILL WRIGHT is Senior Managing Director, Retail Advisory Services in the Americas MAY/JUNE 2022

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New Jersey acts to bring supermarkets back to food desert communities The state is taking the lead in eradicating food deserts with tax credits, loans, and grants to draw supermarkets back to inner city markets. BY NAVEEN JAGGI

rocery stores are an essential business and played a critical role in ensuring food supply during uncertain times. The grocery industry grew by 9.4 percent in 2020 and sustained that growth in 2021, with total grocery sales reaching $803 billion last year, according to JLL”s 2022 Grocery Tracker. Additionally, the pandemic encouraged a natural adoption of e-commerce grocery options by many consumers, which resulted in a 63.9% increase in online grocery sales in 2020, according to eMarketer. Recently, the New Jersey Economic Development Authority (NJEDA) announced that it had approved the final list of New Jersey’s 50 designated Food Desert Communities. This will serve as a guide to allocating $240 million through the Food Desert Relief Act (FDRA). to 1.5 million individuals across a diverse range of communities in all 21 of New Jersey’s counties. The FDRA will also provide up to $40 million per year for six years in tax credits, loans, grants, and/or technical assistance to increase access to nutritious foods and develop new approaches to alleviate food deserts. According to data released by the Community Food Bank of New Jersey, 800,000 residents in the state face hunger every day, and Feeding America noted that 192,580 of those residents are children. This is an ongoing crisis that requires recruiting of grocers to help connect residents facing hunger with the proper food sources they need. For grocers, this is a great opportunity to develop new grocery-anchored centers and sustainable operations within designated food desert communities. This act also aims to strengthen existing community assets by providing them with necessary equipment CHAINSTOREAGE.COM

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TOP 10 NEW JERSEY FOOD DESERTS

North, Central and South Camden/Woodlynne Atlantic City/Ventnor Newark South Newark West Camden East/Pennsauken Trenton West Newark North & Central Newark East Salem City Passaic City

Highest Block Group Food Desert Factor Score

Low Access Score

100.0 95.0 85.8 83.5 86.9 79.8 83.1 88.9 75.0 81.3

95.7 97.4 62.2 70.1 83.2 36.3 27.4 44.6 100.0 27.4

*Residents of a block with a higher Low Access Score travel farther to a major supermarket

A January 2022 US Census Bureau survey found that nearly one in 13 New Jersey householdsreported not having enough to eat in the last seven days. Governor Phil Murphy signed into law the Food Desert Relief Act, which directs the New Jersey Economic Development Authority to address the food security needs of communities across New Jersey by providing up to $40 million per year for six years in tax credits.

and infrastructure to provide healthier food options and respond to the shift to e-commerce. While online grocery ordering expanded during the pandemic as means to maintain social distancing and keeping families safe, it’s still a luxury that is not accessible to all communities in the United States. Grocery retailers are an essential part of the community and shopping in-store will always be the foundation for most consumers. According to JLL, grocery-anchored retail made up the largest share of retail property acquisitions last year, with $13.3 billion bought in 2021, and will continue to be an attractive asset for investors and consumers in the future. New Jersey is leading the nation in taking the necessary steps to eradicate food deserts, and with the help of NJEDA, sustainable operations of new grocery stores will open in New Jersey’s designated food desert communities Similar efforts are taking wing in other states. Superior Street Mercantile, an independent grocer, recently opened a 2,500-sq.ft. store in the manufacturing town of Albion, Mich. It features more than 120 Michigan-based brands, and fills the largest void in downtown Albion, whose decades of economic decline forced businesses to move away or close. Led by the Albion Reinvestment Corp. (ARC), the plan maps out the revitalization of residential and commercial properties, bringing resources closer to the consumers. The NJEDA is making great strides in the acceleration of food desert projects and investments, receiving grant and loan programs from the state. Grocery retailers also may find opportunities to leverage public funding to bring more of the food desert projects to life across the nation. While NJEDA still needs to create the policies for administering the law, the pandemic has proven that grocery-anchored stores are worth the investment. NAVEEN JAGGI is president of retail advisory services at JLL

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REAL ESTATE Q & A

SPONSORED CONTENT

Don Casto on retail properties post-pandemic

on M. Casto III’s father, Don M. Casto, Sr., started the Columbusbased Casto real estate company to develop single-family homes and shopping centers. Today, the company manages more than 26 million sq. ft. of property in the Midwest, the Southeast and the Mid-Atlantic. Don’s seen lots of changes in the past half-century. We were interested to hear what marketplace shifts he’s seen take place during COVID-19’s presence on the planet.

Have you seen anything develop during the pandemic that surprised you?

When I was new in the business, I asked my old partner Dick Solove how he had gotten so successful in the real estate business. “It’s really simple,” he joked. “You have to live a long time.” We’ve been developing in Florida for a long time and, we’ve been seeing a lot of medical uses becoming part of retail developments. We have two projects nearly completed that are anchored by medical tenants. Multiple practice groups are working out of 75,000-sq.-ft. buildings. They generate almost as much traffic as a typical retail anchor. Medical development in retail space is exploding right now.

Anything other significant new trends?

Yes. Single-tenant net lease development used to be ancillary to our business. Every now and then we’d do some pad development in front of or adjacent to our shopping centers. Today we have a division that’s developing more than 60 net lease properties. Net lease is a product type that doesn’t always need an anchor, and we’re leveraging our experience to grow that side of the business.

Casto has been doing quite a bit of mixed-used development in recent years. Will that continue?

Yes, we’re comfortable in that arena and it will continue where the market demand Don Casto exists. The mixed-use component adds stability to a project. At our Winter Park Village project north of Orlando we’re adding dense apartments, five new restaurants and, interestingly, medical is becoming part of this project, too. Our Hamilton Quarter project in northeast Columbus has done very well and includes retail, multi-family, and both medical and conventional office as well as hospitality.

Retail brands are expanding, but labor and material costs are high. Is that slowing you down?

One thing that retailers have to understand is that we’re currently in an ever-increasing cost environment. We believe it’s beneficial for retailers to understand that developers and landlords are in a tough spot on construction costs. There’s a significant gap between existing development and new development. For example, what not long ago was a $12 per sq. ft. rent for new, junior box construction is now going to be $18. And yet, nearly all developers we’ve spoken with recently say lease signings are high and vacancy rates are low.Right now, within our portfolio, we’re at historically low vacancy. In our entire central Ohio portfolio, we have just a handful of larger spaces available. Deals are tougher to make these days, but when they’re being well thought out we’re seeing that both the tenant and landlord sides are experiencing win-win situations.

PREIT’s Joe Coradino on 21st Century Malls

hen Joe Coradino took the helm of big mall owner PREIT nearly a decade ago, he set a line at an average sales per sq. ft. of at least $500 per center. If a property fell below, it’s future opportunity was evaluated and properties with a weak outlook were disposed. In March of this year, following two years of limited social interaction and month of closed doors a, PREIT’s portfolio-wide sales per sq. ft. average hit $618, a record high for the company. We sat down to talk with Joe about what he sees on the horizon for enclosed shopping centers in the two years ahead.

Every broker tells us that brands are fighting over spaces in good locations. What’s driving the demand? No question, our leasing team is busier than they’ve ever been. Part of it is there are lots of new tenants wanting to have space in leading malls. There are new domestic retailers, new international retailers, but also more start-ups. One of the positives of COVID was that it drove lots of people to come into the marketplace with new ideas. We’re also seeing more local entrepreneurs wanting to come into a mall environment.

Are PREIT’s super-regional malls in affluent markets picking up tenants that have left malls closing in those areas?

Yes, in Harrisburg, where we have our Capital City Mall, there were two other big malls there that are, for the most part, closed. The same thing happened with the Swansea Mall that was near our Dartmouth Mall in Massachusetts. What we have going for us is the markets we’re in. We’re in Philadelphia, which is the 3rd largest life science market in the country, so we were able to bring Cooper University Hospital to our Moorestown Mall and are exploring several other opportunities to bring this use to the portfolio. 30 SHOW SCOOP

Strong retailers are expanding, but they’re having problems with staffing. What’s the answer?

I was in one of our malls a couple of weeks and noticed stores closed and offering limJoe Coradino ited service due to staffing issues. That just isn’t acceptable and has got to get corrected. We’re holding job fairs and doing what we can to help remedy the situation. But interestingly, this is not stopping solid brands from expanding.

PREIT long ago began installing higher-level restaurants with entrances facing the parking lots. Are you expanding that concept?

Yes, we’ve just signed a lease with Eddie V’s at Cherry Hill, a prime seafood restaurant and Blue Fig just opened here as well. We think this leaves us with one of the best mall restaurant lineups in the country. We have Hook & Reel at Mall at Prince George’s and 54 Restaurants at Springfield Town Center. We had our first Shake Shack open at Plymouth Meeting Mall last year and we opened Florence Crab House at Magnolia Mall.

So activity levels are up, but financial pressures are up, as well. Inflation remains an issue and gas prices could have a bad effect on summer travel. There are certainly a lot of pressures out there, but I am cautiously optimistic. Inflation has tended to help our business as sales are higher. In March, as gas prices rose, physical sales actually rose while online sales declined so we are hopeful that there is still room in pent up demand and that global disruptions subside. MAY/JUNE 2022

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REAL ESTATE Q & A

SPONSORED CONTENT

TORG’s David Hinkle on the unique role of outlet centers

or more than 17 years, David Hinkle served as President of National Book Warehouse & The Book Market, a bargain book seller that pioneered what was then called “temporary retail,” something that now claims the snappier nom de guerre of “pop-up store.” Many of the brand’s 160-plus stores resided in outlet centers, a retail sector that Hinkle, now a principal of The Outlet Resource Group, feels is misunderstood by many top retail companies. We spoke with him to find out more.

So, David, what is it that retail brands without stores in the outlet sector don’t get about it?

The outlet sector is the original DTC model. It was the first place where you saw top brands running their own retail stores. The outlet business can provide great support to a brand’s e-commerce business.

How, exactly?

Everybody is trying to figure out how to handle the last mile delivery part of their business. Last mile fulfillment isn’t cheap. How do you handle returns without crushing your margins? Outlet centers get you closer to the consumer base. Outlet centers were first located in tourist areas, but now those tourist areas, like Park City, Utah, have turned into strong residential areas. With the evolution of the outlet sector, many centers are located closer into the population base and, in a few cases, urban markets. A brand’s own store in a dense market can be a good last-mile fulfillment and return center.

But aren’t outlet stores used mostly to move inventory that didn’t sell out in malls and shopping centers?

Retailers often have goods that are manufactured specifically for their

outlet stores as part of their assortment. The goods are not inferior nor are they represented as a “mark it up/mark it down” item. And they can offer more than they can in a small department store section. David Hinkle If you go to Rodeo Drive, the consumer may be intimidated by some of the brands and do nothing more than window shop. Then you go to Desert Hills Premium in Palm Desert, and you’ll see a lot of the same brands, but the environment is more casual, and people are more comfortable shopping. And that dynamic is an important part of the strength of opening in outlet centers.

Who is the outlet customer?

Our shoppers have gotten younger and their education and income levels continue to rise. They want the brands that they are loyal to as well as brands new to the market. On average, they travel about an hour to shop, and their dwell times and average spend outpaces other sectors in the marketplace.

What can a retailer miss minus an outlet presence?

The opportunity to introduce yourself to an audience that hasn’t shopped you. The Kellogg School of Business published a paper concluding that outlet stores attract loyal customers that will then support them in any retail environment. I think the DTC retailers exploring outlets will find they’ll speed their growth. They’ll likely be profitable in our space and earn inventory management. But the biggest benefit will be selling product to first-time buyers. That’s how you achieve revenue growth.

CBL’s Stephen Lebovitz on retail in the ‘20s

ike all big mall owners, the last couple of years have been a roller coaster ride for CBL Properties and its CEO Stephen Lebovitz. Filing for Chapter 11 in 2020 to restructure its balance sheet and eliminate debt, CBL emerged in 2021 to continue refreshing its properties with additions as revolutionary as a Live! Casino anchor at its Westmoreland Mall outside of Pittsburgh. We checked in with Stephen to find out what might be new in ’22.

What kinds of things do your traditional retail tenants need to focus on to flourish in the years ahead?

The most important thing retailers need to do is to focus on customer experience. Shoppers still like to go to stores because they can get associates help to find what they are looking for and they can see what they are buying. We have seen stores benefit from buy-online, pick-up-instore in the last year which is way to offer convenience to the customer. In the current environment, staffing continues to be a major challenge for retailers. I recently visited 10 of our malls and saw many of the stores understaffed. This has impacted the level of service and operating hours. If shoppers can’t find what they want or they can’t check out quickly, they get frustrated, so retailers have to find ways to satisfy shoppers.

It’s always been tough for retailers to hire good associates. Is it even harder now?

It’s definitely competitive. First and foremost, you’ve got to take care of your team. It’s important to invest in the workforce and make sure that they have career paths. You have to constantly enhance your company culture. It’s a good time to get active with diversity, equity, and inclusion initiatives. You want your team to feel the company is not static, that all 32 SHOW SCOOP

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of them are supported by their managers in ways that are important to them.

CBL has been very active with DEI initiatives lately.

Stephen Lebovitz Yes, we have BLCK Market in the Pearland Town Center outside of Houston. It’s an incubator for a diverse group of Black entrepreneurs in the area to showcase and sell their products in a local mall. At our mall in Chattanooga, we recently held a Black-Owned Business Expo. We had 25 business owners participate. The mall was packed with customers and the vendors received great exposure. The event was a win-win with retailers, food court, and other stores around the mall reporting increases in traffic and sales. We’re going to do this at three more malls, and we’re looking at expanding it to include Veteran-Owned businesses and Women-Owned businesses.

The pandemic was a challenge to you and all other operators of enclosed shopping centers. How have you emerged?

2021 was one of the strongest years we’ve had in our company’s history. There were virtually no new retailer bankruptcies. Department stores like Dillard’s and Macy’s reported great sales per square foot and profits. The mall model is working – customers in our communities want to shop in person, but we’ve had to evolve, be more creative. The narrative that malls are dead was really dispelled last year. We have demand from so many kinds of uses--restaurants, entertainment, value, medical, service, hotels and residential. We are more excited than ever about the future of our properties and our business. MAY/JUNE 2022

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RR ROCK RUN C R O S S I N G S D EVELOPED

C ULLINAN P ROPERTIES

VISIT US AT ICSC VEGAS! May 22-24 #8214 South Hall

Rock Run Crossings is a 300+ acre super-regional mixed-use development at I-55 and I-80 in SW Chicagoland

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REAL ESTATE Q & A

SPONSORED CONTENT

URW’s Geoff Mason on Post-Pandemic Development

uring more than 10 years with Westfield and Macerich, Geoff Mason spent much of his time helping specific centers continue to provide what their fast-changing communities wanted. As the assistant vice president, property management of Tysons Corner outside of D.C., a two-million-sq.-ft. property with a hotel, luxury apartment tower, and two office towers, he received an advanced education in what successful retail-oriented properties must do to cater to a more sophisticated consumer that wants an environment where they can live, work, and play. Now executive VP of development, design, and operating management at Unibail-Rodamco-Westfield, we asked Geoff how he’s applying what he’s learned to satisfy—not just shoppers—but workers and residents of modern, retail-centered communities.

Geoff, it seems that the pandemic has moved landlords into more dynamic leasing strategies. Is that true at Westfield?

Today, we’re not looking to replace one fashion retailer with another; instead, we’re bringing in the most dynamic and best-in-class fashion brands along with more dining, more entertainment, and more health and wellness to meet the daily needs of the consumer. That’s very different than it used to be. Fifteen years ago, if you knew the department stores at mall, you could list out the inline stores with 90% accuracy. Now, consumer expectations are much higher.

The entertainment, restaurant, and fitness segments seem to be in a very creative stage of specialization. Entertainment used to be a movie theater and dining was just a food court. Now we’re making sure that we have high-quality options for

everyone. From experiential dining at iCHiNA at Westfield Valley Fair; to immersive, virtual reality experiences at Dreamscape at Westfield Century City; to new Pinstripes locations at Westfield Topanga and Westfield Garden State Plaza, our centers now provide options for every guest at every time of day.

Geoff Mason

We hear you’re moving forward with a new vision for some of your shopping centers in the U.S. Tell us about it.

We have a vision to transform many of our most productive shopping centers into landmark destinations that completely reimagine the intersection of retail and urban placemaking. Our goal is to create more than just places to shop, but rather mixed-use destinations that have a resort-like quality, are highly adapted to the local community, and transit oriented.

Do you feel that, as primarily a center owner-and-operator, you have to approach mixed-use development in a different way?

We are being thoughtful about our strategy for creating landmark destinations, with a focus on four key areas: densification, diversification, innovation, and personalization. And we’re bringing in co-developers and other business partners when and where it makes sense, blending our global retail and development expertise with our partners’ localized experience in residential and community-building. Ultimately, we want to create true town centers where people have all their needs met, whether that be for shopping, socializing, working, dining, or living.

Woodmont’s Fred Meno on the future of malls

red Meno is unusual. Most big players in retail real estate tend to pick a sector and focus on it, such as grocery-anchored centers, upscale mixed-use communities, open-air and power centers or regional malls. At The Woodmont Company, management growth has resulted organically from their third-party management platform and Woodmont plays in just about every sector of retail.

Fred, Woodmont is primarily involved in third party management of properties. You don’t own much, right?

That is correct. Our total managed portfolio is over 22 million square and all but approximately 800,000 sq. ft. is third-party owned. There’s nothing too small or too large that we can’t or won’t operate. Our operational focus is on what I like to refer to as three food-groups of retail… regional malls, outlet centers and generic open-air centers which include, power centers, lifestyle, unanchored neighborhood and grocery-anchored centers. We currently manage, operate, and provide receivership services in 32 states. The receivership services side of our business has been an extremely fast-growing area over the past seven or so years.

Let us guess that you’ve found yourself pretty busy lately.

Yes. The retail industry and more specifically, the regional mall sector, has experienced a great deal of loan distress during the past 10-plus years resulting from a perfect storm combination of shrinking retailers and store sizes, online growth, and the decline of supermarkets. REITs have made strategic decisions over the years to focus their internal resources on their core A and B-plus malls. It has become the lesser of evils for a REIT to give the keys of a class C or D declining mall back to the lender at loan expiration. 34 SHOW SCOOP

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On-site teams at malls that transition to the lender kind of gets tied up at the dock at those centers. True?

Absolutely true. The REIT’s corporate office takes over many functions we would expect be done at the center level. Budgeting, involveFred Meno ment in marketing and advertising, and rent collections, for instance. When we take over, we expect the on-site team to handle these blocking-and-tackling functions. Sometimes we’ll get a pushback response from them, such as ”I don’t know how to do that.” But often we get, “We’re so glad you’re allowing us to do that.”

The biggest impediments in trying to revive big malls?

Having multiple owners, namely the anchors. Changes can’t be made without the consent of all parcel owners. If a CMBS lender takes control of a mall, redevelopment is difficult because it’s forbidden by law to alter the property’s GLA during lenders holding period. Lenders are also further challenged as a short-term owner of a distressed mall since it can be difficult for them to pencil out and justify doing a low rent/high capital cost deal necessary to back-fill large anchor vacancies.

The world has changed a lot since malls gained pre-eminence in the 70s and 80s. Are they still relevant? Regional malls remain relevant, but certainly less so compared to the early days of the mall industry. A-class malls will continue to be major destinations if they provide shoppers with what I call the Five F’s—Fun, Fashion, Food, Fitness and Furniture. If not, they have to maximize longterm value through re-development. MAY/JUNE 2022

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REAL ESTATE Q & A

SPONSORED CONTENT

C N

Cullinan’s Matthew Beverly on Community Involvement

hen Kite Realty Group acquired Oakbrook, IL-based Retail Properties of America, Inc. (“RPAI”), last year, the president of RPAI’s Eastern Division, Matthew Beverly, was quickly snapped up by Cullinan Properties to serve as its new CEO. The Peoria-based developer of mixed-use properties such as Streets of St. Charles in metro St. Louis and Rock Run Crossings in Chicago metro views real estate development similarly to RPAI. We sat down with Matt to see how things were progressing.

these demands by integrating the office and retail components.

How are shoppers different than they were five years ago?

We’ve been expanding the variety of our restaurant lineups for years now bringing a better balance at these retail centers between soft goods, services and food uses. What we’re seeing post-COVID is that the space configuration for these restaurants and tenant focus has changed. We’re working with tenants at our existing properties and development projects to identify locations to add drive-thrus, larger outdoor seating areas and short-term parking areas for to-go or delivery parking.

I think today that consumers are more focused on their most precious commodity: their time. Today’s shoppers consider their experience when allocating their time. Whether it’s quick retail errands, service visits, or spending the day shopping and sharing a meal with friends, consumers are looking for the best way to spend their time. So, in designing a property today, it needs to be viewed as a gathering place providing a unique experience that is activated day and night.

As a result of the 2020 COVID-19 pandemic, what changes in consumer preferences or attitudes have you seen?

We’ve seen a migration to working remotely, both full-time and in a hybrid format. Technology in recent years has furthered remote working capabilities, but the pandemic forced people to work from home, using these advancements daily. We’re also seeing employers move to suburban locations with headquarter relocations or satellite offices openings. We have seen employers place a premium on sites that offer the same type of amenities as the urban locations, with robust food and entertainment options. As a retail owner and developer, Cullinan is trying to meet

Over the years, landlords have tried to “internet proof” their retail centers at every class of shopping center such as power and neighborhood centers. How as the pandemic altered this strategy?

Matthew Beverly

Cullinan has focused on its Midwestern base and worked assiduously to cultivate relationships with local communities and municipalities. Is this essential for developers in these changing times? Without a doubt. As we focus on additional markets in the South and Southeast, we’re opening satellite offices to foster relationships to acquire great real estate and execute our development strategies. With the trend toward remote working and employers having a greater presence in suburban markets, there’s lot of great real estate out there that is miscast, whether it’s property in need of densification or a change in use. These types of developments require vision as well as the ability to connect with local municipalities and surrounding communities.

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MAY/JUNE 2022

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REAL ESTATE

10 UNDER 40

I S S S L

Nominated by their peers, selected by Chain Store Age’s editorial staff, here are Retail Real Estates Rising Stars of 2022.

MaryHardin Rathel, 27

Chris Ressa, 38

In less than a year on the job at BatteriesPlus, MaryHardin Rathel found locations and completed lease negotiations for 34 new franchises while managing the company’s corporate portfolio of 120 stores. And she loved every minute of it. Rathel learned retail real estate at Books-A-Million, where she negotiated abatements and deferrals for 200-plus locations at the outset of the pandemic. While there, she helped establish a store network in smaller footprints for a secondhand book shop called 2nd & Charles that helped prepare her for her BatteriesPlus experience. “It’s the hardest I’ve ever worked, but our team saved Books-AMillion millions of dollars in rent abatements. Each landlord was different. I learned to get comfortable with being uncomfortable,” Rathel said. Her retail real estate expertise is growing at BatteriesPlus, which considers a wide range of store sites and lets franchisees do stand-alone buildings or end-cap spaces. “What’s great about this job is that I get to work with franchisees who’ve never started a business before,” she said. “To see their excitement and joy in helping them start on the road to the American Dream is equally exciting to me.”

Somehow for Ressa, the disciplines of sport and real estate intertwined—and both very successfully. He was a scholarship wrestler, a four-year starter, and Division I tournament qualifier at Rutgers and is now a managing partner at one of the nation’s top owner-operators of outdoor centers. “One day my wrestling coach came into practice and asked if anyone wanted a job in real estate,” said Ressa about the beginning of his career journey. One of the coach’s former little league players worked at Sherwin-Williams and had an entry-level real estate rep spot to fill. Ressa took it. “That first job affirmed my belief that a tireless work ethic pays off as it leads to many opportunities,” he said. At DLC, he tirelessly hits the road redeveloping assets, now grappling commerce’s knotted supply-chain. He’s particularly proud of the redevelopment of Frederick County Square in Frederick, Md., where Kmart closed its doors in the first quarter of 2020 and a new anchor was installed by Q4. “In real estate we talk about location, location, location but, at its core, our business is about people, people, people,” Ressa said. “You need the right people in place to make the locations work.”

Real estate manager BatteriesPlus

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Executive VP & COO DLC Management Corp.

MAY/JUNE 2022

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N O L S L

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OPERATING REGIONAL MALLS, OUTLET CENTERS & OPEN-AIR SHOPPING CENTERS 138 SHOPPING CENTERS IN 31 STATES EXCEEDING 23 MILLION SQUARE FEET

INGRAM PARK MALL San Antonio, TX Serves Northwest & Central San Antonio oﬀ Northwest Loop 410 Small & Large Shop Spaces Available Leasing Info: bdyer@woodmont.com

PARK PLAZA MALL Little Rock, AR Premier Shopping Center Anchored by Dillard’s Flagship Store Small & Large Shop Spaces Available Leasing Info: bdyer@woodmont.com

NEWGATE MALL Ogden, UT Located oﬀ Wall Avenue and 36th Street Small/Large Shop & Anchor Spaces Available Leasing Info: jmastin@woodmont.com

MALL AT TUTTLE CROSSING Dublin, OH Serves Dublin, Hilliard, Columbus, Arlington and Grove City Small/Large Shop & Anchor Spaces Available Leasing Info: tcutting@woodmont.com

COLUMBIA GORGE OUTLETS Troutdale, OR Located 15 Minutes East of Portland & Portland Int’l. Airport Small & Large Outlet Spaces Available Leasing Info: tcutting@woodmont.com

VISIT US IN BOOTH #4502

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property management receivership services tenant representation landlord representation investment sales capital markets development

4/29/22 9:13 AM

REAL ESTATE

Marissa Visconsi, 34

Robert Wachtler, 37

Some people are born to their vocations, and Marissa Visconsi, the top leasing producer at PECO in both 2019, and 2020 is one of them. In that second, COVID-plagued year, she did 50 deals totaling more than 130,000 square feet. Visconsi was born to real estate literally, as well. Her forebears arrived in a rapidly expanding America and made livings as bricklayers. In the 1920s, her family started developing buildings. They founded Visconsi Companies and then JVJ [Jacobs Visconsi & Jacobs Co.] one of the largest mall developers in the United States. Her Great Uncle Dominic Visconsi was one of the founding members of ICSC. But Marissa is the first female Visconsi to enter the family business. “I’ve succeeded because I’m totally passionate about what I do. That’s how you get totally successful,” she said. “My father and uncles had told me all their stories from years ago, and that’s part of who we are. Your properties become your babies.” Marissa is the only real estate-engaged Visconsi to have delivered an actual baby, however. Her daughter Emerson is now 16 months old. And she’s poised to pour more love into her professional projects as well. “I talk to my family regularly about the business,” she says. “We talk property management, construction, marketing, legal issues, and deals.”

Robert Wachtler was lucky. At the age of 21 he joined the company that worked so well for him he never left. That company, Kimco, was lucky, too. Over the past five years he has executed 220 new leases, placing him in the top rank of agents at one of biggest owners of grocery-anchored centers in the nation. Wachtler seemed destined for the role. His great grandfather owned real estate in Brooklyn and he liked the gritty nature of the business. “I wasn’t a sit behind the computer type of guy,” Wachtler said. He met a senior executive from Kimco, based in his native Long Island, who got him a job in accounts payable and let him spend a day a week cold-calling possible tenants. It’s something he still is disciplined to do. “We deal mostly with brokers, but I still go canvassing door-todoor. In this job you have to get over the idea that you’re always getting rejected. Every time I get that feeling, I like to go out and meet and talk to people,” Wachtler said.

Senior director of leasing Phillips Edison & Company

Senior director of real estate Kimco Realty

Evie Gross, 31

Director of national accounts Brixmor Property Group

Camillo Spinoso, 24

Senior VP – business development Spinoso Real Estate Group Spinoso has officially been an employee of Spinoso Real Estate Group for just three years. Unofficially, he’s been training alongside his dad Carmen on his own retail real estate journey before he started this company in 2008. “Originally, my dad told me I had to work for other people for 10 years before I joined him. I got a job at a boutique brokerage firm in Brooklyn and did pretty well and I came to work for him a lot sooner,” Spinoso said As starting catcher and captain of the LeMoyne College baseball team in his native Syracuse, Spinoso said he learned to treat his pitchers differently when they didn’t have their good stuff. That, he says, helped him when he moved into management at Spinoso. “The most important thing we do is to keep a keen focus on community events to drive traffic all year round,” he said. “It’s like a baseball team. If it’s in the playoffs, it’ll pack the stadium. If it’s not, they have to depend on events and promotions to build the audience.” 40

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Gross found out some years ago that one of the basic building blocks of a good life was the ability to make connections with good people. That can be hard in Manhattan, where she lived, so she started a program called Friday Night Lights at her synagogue that invited a group of members to dinner at another member’s apartment. “One couple met at one of these dinners and later got married,” Gross said. “Real connections produce real relationships that are long-lasting, and that’s true in business, as well.” Gross has spent a lot of time forging relationships with new business classes over the past few years. In 2021, she executed 46 deals for Brixmor, many of them with new classes of tenants that promise to extend throughout the devloper’s portfolio in the coming years. Firs-time tenants she closed last year included F45 fitness, HTeaO, Buff City Soap, and Dashmart by DoorDash. ”Dashmart is a very interesting new tenant type for us,” she said. “It’s essentially a fulfillment center that wants to be near its customers, but it doesn’t need retail facing space. It can be in the back of a center.”

MAY/JUNE 2022

CHAINSTOREAGE.COM

4/29/22 9:13 AM

MEET US AT THE MALL. CBL is redefining what the mall means in our communities by combining retail, dining, entertainment, and other mixed uses. See what else is in store. Meet us at the mall.

Over the last five years, CBL has completed more than 45 redevelopment projects totaling more than 2.7 million square feet. We recognize the value of redeveloping anchor locations and adding density in under-utilized parking areas to diversify each property and meet the needs of the community now and into the future.

EVOLVING FOR OUR COMMUNITIES CBL’s properties offer more than just a place to shop. Each mall serves as an active community partner by combining in-demand retail stores, a variety of dining options, entertainment and events, services, health and wellness offerings, and so much more.

RESULTS FOR OUR PARTNERS CBL’s business is built on relationships. Our strong leadership, responsiveness, and a team dedicated to your success make us an ideal business partner. We strive to maximize long-term value for our properties and our partners.

See what else is in store. Meet a CBL representative at ICSC 2022 in Central Hall, booth 355 to learn more.

CBL PROPERTIES

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4/29/22 9:13 AM

REAL ESTATE

Cayley Mullen, 34

Xan Saks, 34

Mullen grew up in metro Atlanta and Avenue East Cobb in Marietta, now owned by North American Properties, was where her parents dropped her off to hang out with her friends. “Back then, there was no public realm, no central area, no programming, you just walked around in circles,” said Mullen, who took a job with NAP in 2014 as director of guest experience at Avalon in Alpharetta. “We saw a demand from the public for exclusivity and we developed the Black Card membership at Avalon.,” she said. “It was something we pitched to all our tenants. Turn it into a social club.” As the marketing chief at NAP, Mullen will now turn her attention to another Atlanta area property, The Forum on Peachtree Parkway, which she says will be remade to best serve the local community. “Something that resonates with the younger generation is a desire to give back,” she said. “We want to stand for something more as a business.”

Saks spent 10 years at CBRE, completing more than 500 lease transactions and rising to the rank of First Vice President before starting Beta Agency with his business partner and friend Richard Rizika. Their Beta Agency focuses on retail real estate in Southern California and works with clients such as Brookfield and UnibailRodamco-Westfield to help them minimize risk and enhance value with their projects “We’ve never been more excited to be in the brick-and-mortar business,” Saks said. “People want what they want and when they want it. You can’t do that for them unless you have a presence in the last mile.” He’s a big believer, too, in tech playing a larger role in expanding and refining physical retail. “We’re able to better synthesize data to help deliver a better story to clients about the decisions we’re making. Mobile searches, social media—it’s how people are making decisions these days,” Saks said.

Amanda Welles, 30

Jonathon Schwartz, 36

After leading transactions for two straight years, Welles ascended to senior VP in the shortest time at this company that operates retail and mixed-use projects mostly located in Texas. “My dad was in real estate and I had fun watching him do what he did. I worked for him for a few summers and then did an internship and I knew that was the way I wanted to go,” Welles said. “There are families that hold onto real estate for ages. Some of us take it up and some not. It takes a certain personality.” Her focus is landlord representation and lifestyle, mixed-use, and grocery anchored centers, all of which are mostly full in the Dallas market where Welles does a lot of her business. “We’re back to all-time-high levels of 97% occupancy rates,” she said. “There were many tenants, like Pier 1 and Famous Footwear, who were hurting and didn’t get out. We got the spaces back and are filling them service-oriented tenants in fitness, beauty, and food and beverage.” Amanda has made the first step in possibly extending her family’s run in real estate. She and her husband became the proud parents of a son, Matthew, last year.

Schwartz likes to recount the story of how It’Sugar founder Jeff Rubin begat the candy retailer’s first “Sugar Daddy” store at American Dream. “American Dream chief Don Ghermezian (see p. 26). was driving him around the center in a golf cart when he mentioned he’d like It’Sugar to have a larger presence. Ghermezian immediately wheeled the cart around and drove him to a three-story space across from the water park,” Schwartz said. Thus was the first “candy department store” born, and Schwartz is now engaged in building two more—one at Ala Moana in Hawaii in Honolulu and another on North Michigan Avenue in Chicago. All this brand expansion is happening less than two years after It’Sugar filed for Chapter 11. “We shut down a hundred locations and furloughed everyone except five people, me being one of them. We had a three-month stretch with no revenue coming in, and our inventory is perishable,” Schwartz recalled. The restructuring succeeded and more than 100 stores were reopened in three classes: the Sugar Rush (3,000 sq. ft.), the Sugar High (5,000-10,000 sq.-ft.), and the Sugar Daddy (15,000+ sq. ft.) “We’re seeing more interest in our brand from landlords than ever. They’re curating their space to increase dwell time and keep people in their centers longer, and we accomplish that,” said Schwartz.

VP of marketing North American Properties

Senior VP Venture

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Partner & co-founder Beta Agency

VP real estate & business development It’Sugar

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O N

Visit us in Las Vegas

Op Open Doors New D oo

Central Hall

Booth 4709

Leasing + Management •

Global Reach Asset Focus

Marketing + Branding • Strategy + Execution • Representation + Reporting • Acquisition + Development •

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OutletResource.com

4/29/22 9:13 AM

WHO’S IN THE AISLE

Booth Briefs CBL Properties 355

For more than 40 years, CBL has owned a national portfolio of market-dominant malls, lifestyle center, outlet centers, and open-air centers in markets with strong demographics and high-growth potential. CBL’s properties offer far more than just a place to shop. Each mall serves as an active community partner by combining retail, dining, entertainment and events, services, health and wellness offerings and so much more. Prime locations, excellence, and infrastructure drive the consistent demand that allows our malls to evolve quickly and meet the needs of the community. Visit a CBL representative in Central Hall, Booth #355 to see what else is in store.

PREIT

2501

PREIT is a leading real estate investment trust (REIT) focused on creating thoughtful, community-centric properties with retail and entertainment at the core. We curate customized, ever-evolving properties that generate success for our tenants and meaningful impact for the communities we serve. Years of repositioning anchors and diversifying our tenancy have yielded strong results with record sales and growing traffic. Our focus, today, is on enhancing our retail real estate with other community-building uses including apartments, hotels, health and wellness facilities, shared spaces and grocers and other convenience offerings. Visit the team at Booth #2501 to learn how to become part of our dynamic portfolio.

Woodmont 4502

Celebrating 42 years! Founded in 1980, The Woodmont Company is a full-service national commercial real estate firm headquartered in Dallas/Fort Worth, Texas with staffed offices in Newport Beach, California, Phoenix, Arizona and Tampa, Florida. Our expertise is in ground-up development, redevelopment, asset management, property management, investment sales, capital markets, marketing and leasing of regional malls, outlet centers, power centers, community centers, lifestyle centers, neighborhood centers and specialty centers. Woodmont owns, manages and/or leases more than 23 million sq. ft. of shopping centers, including third party management and leasing for institutional clients, realty advisors, and private investors. Visit www.woodmont.com to learn more.

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The Outlet Resource Group 4709

Using an integrated approach, The Outlet Resource Group (TORG) works with owners and developers to strategically reposition underperforming assets, maximize performance of existing centers, develop new shopping destinations, and provide professional guidance on retail expansion. TORG also acquires, develops, leases and markets centers around the world, from feasibility appraisal to a successful, value-enhancing exit. See www.outletresource.com.

DLC Management Corp.

5706

At ICSC in Las Vegas, visit DLC Management Corp. to see why “The Store Won” and how DLC has unprecedented growth in bricks & mortar. With a portfolio of more than 17 million sq. ft. of attractive retail space in 19 states, DLC is one of the premier owner/operators of shopping centers in the U.S. Meet with a team of real estate experts dedicated to creating innovative solutions and successful outcomes for your business. Visit booth 5706 in the South Hall to learn why you can’t make money in clicks without bricks!

CASTO 5849

Our highly-qualified team of professionals are prepared to discuss development and leasing opportunities throughout our portfolio. CASTO, a fully integrated real estate organization since 1926, is a recognized leader in the ownership, management, acquisition and development of commercial shopping centers, multifamily residences, and office buildings. Our growing portfolio currently includes more than 26 million sq. ft. of property located throughout the midwestern and southeastern United States. In 2021, we were No. 5 on Columbus Business First’s lists of largest brokerages and property management companies in Central Ohio. CASTO is headquartered in Columbus, Ohio and fields five offices in Florida, North Carolina, and Ohio.

Cullinan Properties

8214

Cullinan Properties is a leading developer of real estate specializing in commercial and mixed-use developments and acquisitions. Cullinan is known and respected throughout the United States for developing distinctive projects while crafting winning relationships with both our business partners and communities in which we work. We have many exciting opportunities within our growing portfolio including Rock Run Crossings, a 300+ acre mixed-use development in Southwest Suburban Chicagoland. Stop by our Vegas booth and meet our trusted team and visit www.CullinanProperties.com to view our one-of-a-kind properties. CHAINSTOREAGE.COM

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PROJECT PROFILES

Top Props Rock Run Crossings

Size: 1 million sq. ft. of GLA on 310 acres Retail and restaurant: 500,000 sq. ft. Entertainment: 160,000 sq. ft. Office: 150,000 sq. ft. Hotel: 500+ rooms Multifamily: 600 units Owner-Operator: Cullinan Properties Opening: Late 2023 Rock Run Crossings, our largest mixeduse project yet to be built on the northeast quadrant of the I-55/I-80 interchange at the Gateway to Chicagoland. The site has regional access from the Chicago, Central Illinois, Iowa, and Indiana markets. Traffic counts are estimated at 230,000 vehicles per day. A new interchange is currently under construction and will provide access directly into the development. This super-regional development will service a massive region. It has a total trade area of nearly 1.3 million people (Avg. HH income: $100,000). Population of its immediate trade area, Will County, is expected to rise by 76% to 1.2 million by 2040. Rock Run Crossings brings together nearly Cullinan has ever done in a region ripe for a new live-work-play neighborhood. It’s a singular opportunity for leasing or purchasing in one of the great growing markets in the U.S.

Hamilton Quarter

Location: Columbus, Ohio Size: 200+ acres, 250,000 sq. ft. of retail, and over 750,000 sq. ft. of medical/office space Owner/Operator: Joint venture of CASTO, The Daimler Group, The New Albany Co., and Capitol Square Key Tenants: Target, Hobby Lobby, Five Below, BJs Wholesale Club, Beerhead Bar & Eatery, City BBQ, Aqua-Tots, Wendy’s, Starbucks, Chilis, and 554-unit HQ Flats Apartments. The 174-unit Hamilton Woods are under construction. Construction Status: Phase I is open and operating, Phase II is under construction, and the third phase of residential (Hamilton Woods) is under construction Hamilton Quarter combines quality retail, office and 700+ multifamily units in one of the most desirable areas in Columbus. This 200-acre mixed-use development located at the State Route 161/Hamilton Road interchange features 250,000 sq. ft. of retail and over 750,000 sq. ft. of medical/ office space. Hamilton Quarter is minutes from the growing New Albany Business Park and the new Intel chip manufacturing factory, the largest single private sector investment in Ohio’s history, which starts construction in 2022. Hamilton Quarter has a daytime employee population of more than 100,000 and includes top Columbus employers like Abercrombie & Fitch, Discover, Bob Evans Farms, Facebook and Amazon.

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OKC OUTLETS

Location: Seven miles west of downtown Oklahoma City on I-40 near the OK State Fairgrounds and Will Rogers World Airport. Size: 394,000 sq. ft. Operating Partner: The Outlet Resource Group Key Tenants: Adidas, Aerie, American Eagle Outfitters, Coach, Columbia Factory Store, Guess Factory Store, Jared Vault, Kate Spade New York, Le Creuset, Michael Kors, Nike Factory Store, Old Navy Outlet, Perry Ellis, Polo Ralph Lauren, The Cosmetics Company Store, The North Face, Tommy Hilfiger, Under Armour, Vera Bradley and many more. OKC Outlets is the only outlet center in the state of Oklahoma. The center draws over 6 million visitors annually from a large geographic trade area with

La Frontera Village

the average distance traveled more than 170 miles attracting shoppers from as far away as Northern Texas. The center features more than 80 stores, including a mixture of key better national brands and unique local boutiques. OKC Outlets is currently undergoing a refresh on its food offerings to include local favorites Bad Nonna’s Pasta and Brielle’s 2 Geaux Cajun.

Location: Round Rock, TX (Austin MSA) Size: 534,566 sq. ft. Owner/operator: DLC Management, Corp. Key tenants: Kohl’s, Sam’s Club, Lowes, Hobby Lobby, Bed Bath & Beyond, Marshalls, Burlington, Barnes & Noble, Old Navy, and Ulta Beauty. Construction status: Open and operating. DLC Management acquired La Frontera Village, a regional shopping destination, in March of 2022. This 534,560-sq.-ft. center is situated at the northwest corner of the I-35 and TX-45 interchange and is adjacent to the Dell World Headquarters campus, which employs over 13,000. Apple, Tesla, Amazon, IBM, and Facebook have also expanded into the market creating thousands of new jobs. A robust CHAINSTOREAGE.COM

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mix of national retailers help to draw over 5.5 million shoppers a year to the center. La Frontera places in the Top 2% of all shopping centers in the U.S. Strong communities and ample employement has made La Frontera one of the most desirables centers in the market. DLC was able to source a new opportunity with junior anchor, Boot Barn, which is expected to open Q3 of 2022.

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PROJECT PROFILES

Springfield Town Center

Location: Fairfax County, VA Size: 1.3 million sq. ft. Owner/operator: PREIT Key tenants: Macy’s, Nordstrom Rack, Target, Dick’s Sporting Goods, Regal, Dave & Buster’s, Maggiano’s, Yard House, H&M, Sephora, LOFT, Abercrombie Kids, American Eagle Outfitters The property’s proximity to Amazon’s HQ2 (13 miles) and the TSA’s new headquarters (less than one mile) is expected to create over 25,000 jobs and increase retail, leisure and entertainment demand along with additional economic development to the area. The proposed multi-family and hotel developments at the property will ultimately drive Springfield Town Center to be a key example of PREIT’s five core focus areas: multifamily & hotels, health & wellness, essentials &

grocery, experiential and, of course, retail. The center offers a unique retail mix of traditional department stores, coveted brands, entertainment, and delicious dining. Springfield Town Center is also a foodie destination with a wide array of dining options like Yard House, &pizza, 54 Restaurant, and Maggiano’s Little Italy. The whole family can enjoy our entertainment options like Dave & Buster’s, Regal Cinemas, or LA Fitness. We also look forward to welcoming the recently announced 32,000-sq.-ft. next-generation of LEGO® Discovery Center to open in 2023.

Cross Creek Mall

Location: Fayetteville, N.C. Size: 807,342 sq. ft. Key Tenants: Belk, JCPenney, American Eagle Outfitters, Bath & Body Works, BoxLunch, Pandora, Rooms To Go, H&M. Owner/Operator: CBL Properties Construction status: Redevelopment of the former Sears parcel is currently underway. Rooms To Go and Longhorn Steakhouse have already opened, and other dining and entertainment options are in various stages of negotiation. Cross Creek Mall’s mix includes a variety of retail and dining as well as a 46-000-square-foot streetscape development called “The District.”The property is currently undergoing a redevelopment of the Sears parcel, which includes Rooms To Go, Longhorn Steakhouse and future entertainment and dining options. The project is slated to be completed in mid-2023.

Columbia Gorge Outlets

Size: 164,000-sq.-ft. of GLA Key tenants: Coach, Carter’s, Gap Outlet, Levi’s, Starbucks, Tommy Hilfiger, Vans—45 stores in total. Conveniently located just 15 minutes east of Portland and Portland International Airport, Columbia Gorge Outlets is situated directly off I-84, Exit 17, in Troutdale. It features a fabulous selection of brand name outlet stores including Carter’s, Coach & Coach Men’s, Columbia Sportswear, Gap Outlet, Loft Outlet, Pendleton, Samsonite, Tommy Hilfiger, Torrid, Van Heusen and more, all taxfree! More than 50,000 vehicles travel daily on I-84 past the center with another 19,500 vehicles traveling daily on NW 257th Way.

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TECH VIEWPOINT

Don’t Overlook Enterprise Innovation Enterprise platforms are not the most exciting part of the retailer technology environment, but they enable transformational developments. If retail tech were a sitcom, the enterprise platform would be the sensible “straight man (or woman)” character who sits in the background and watches the zanier characters – such as frictionless shopping apps and metaverse storefronts – create the entertainment. But just as Jerry’s apartment in “Seinfeld” was the foundation that served as a springboard for the audience-pleasing antics of Kramer, enterprise platforms provide the basis for the cool “next generation” initiatives that grab the industry’s attention. Following are three examples of retail enterprise innovation worth a closer look. Chico’s Specialty fashion retailer Chico’s FAS is partnering with headless commerce platform Fabric Inc. to deliver improved speed-tomarket for its new omnichannel initiatives. Chico’s seeks to accelerate growth of all of its retail brands with an enterprise platform built on Fabric technology. This new technology foundation is based on Fabric’s modular architecture, which will ease its implementation across a variety of consumer-facing solutions and touchpoints. These microservices and tools will help drive Chico’s current and future omnichannel technology projects, such as its white label same-day delivery partnership with Walmart’s GoLocal service. Chico’s will also leverage Fabric’s platform for inventory management. As a result, the company intends to enable a “single source of truth” to accurately track inventory across all channels, as well as enhance accuracy and transparency across all three of its brands and improve omnichannel customer experiences.

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Christmas Tree Shops Christmas Tree Shops is completing its separation from Bed Bath & Beyond by migrating technology operations to a hybrid cloud platform. The specialty retailer has completed more than 250 hybrid cloud integrations in the past year using the SnapLogic Intelligent Integration platform. Christmas Tree Shops, was looking to improve and accelerate operational and analytical data flow across the enterprise. The retailer did not want to lose the existing data and information that had been stored in Bed, Bath & Beyond’s systems while performing a quick migration. The company turned to SnapLogic to enable the integration of core legacy systems with new, cloud-based technologies in order to streamline and speed up business processes across enterprise areas including HR, finance, sales, and operations. Christmas Tree Shops also used SnapLogic functionality to gain visibility into near real-time sales during the busy holiday shopping period. Asos Global online fashion retailer Asos is entering a new cloud agreement with Microsoft that will see it continue to use the artificial intelligence (AI)-based Microsoft Azure cloud computing service as its preferred cloud platform for the next five years. The millennial- and Gen Z-focused retailer has been working with Microsoft to build a customer platform that enables technical agility, global scale and resilience. Asos seeks to effectively handle high levels of customer demand and help customers find the products they want, in the way that best suits them. Through the renewed partnership, Asos will work with Microsoft to launch new projects, such as its partner fulfillment program, which the retailer is designing to expand the range and availability of products while maximizing demand conversion, customer choice and stock availability.

Every Tuesday The premier newsletter showcasing technology and multi-channel, seamless retailing. From e-commerce and mobility to in-store technology and social media, Connected Retail keeps retail executives in the know about the fast-paced, ever-evolving world of retail tech.

Dan Berthiaume dberthiaume@chainstoreage.com

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TECH

Improving the Fan Experience Sports, entertainment venues offer tech innovation By Dan Berthiaume Sports and entertainment centers do not always automatically come to mind when the term “retail” is mentioned. But they sell food, beverages, souvenirs and more to thousands of customers who attend the events they host. Typically, a large venue hosting sports teams and/or live entertainment will include several selfcontained stores and restaurants. Since customers at a venue are primarily there to see an event and not make purchases, providing a streamlined shopping experience is vital. But that’s not all. Since visiting an arena is ultimately about being able to feel part of the spectacle, technology can also be used to heighten the overall sensory experience. Here is how three different venues — Oracle Park, Climate Pledge Arena and Area 15 — are using technology to help innovate the retail experience. Oracle Park – Concessions management Customers at San Francisco’s Oracle Park will have enhanced access to concessions products. The San Francisco Giants baseball team is deploying the Oracle Micros Simphony Cloud POS solution at its home stadium. The Giants intend to leverage the new POS technology to make it easier for customers to order food and beverage options at concession stands or from their mobile devices, while built-in restaurant business analytics and real-time data access will help Oracle Park improve inventory management. The stadium will leverage Simphony to obtain real-time insights into what is happening across inventory, pricing, and promotions. If a popular promotion leads to an out-of-stock item, for example, it will automatically be reflected on the park’s digital menu boards and mobile devices. Conversely, ballpark staff will

also be able to see if there is a surplus of a certain food, with the option to run a new promotion to accelerate sales. As part of the rollout, the team has also moved its disaster recovery system for high-priority data, files and video to Oracle Cloud Infrastructure (OCI) from Amazon Web Services (AWS). In future seasons, Oracle Park will implement self-service customer kiosks and “grab-and-go” frictionless checkout locations. Climate Pledge Arena – Contactless shopping The recently opened, net-zero carboncertified Climate Pledge Arena in Seattle features Amazon’s leading-edge contactless shopping and payment options. Climate Pledge Arena is a redevelopment of downtown Seattle’s KeyArena. (The name references The Climate Pledge, launched in 2019 by Amazon and climate change network Global Optimism, which calls on signatories to be net-zero carbon across their businesses by 2040.) In addition, Climate Pledge Arena uses Amazon’s Just Walk Out technology with Amazon One palm-based payment to make the in-arena shopping experience more efficient and cut wait times. Customers visiting the four Just Walk Out-enabled stores at Climate Pledge Arena can insert their credit card at the location’s entry gates to shop, or can hover their palm over an Amazon One device to enter. Once inside, customers can take what they want and then leave after they have finished shopping. As customers shop, Just Walk Out technology determines what they take from or return to the shelves, and the credit card they inserted or linked to their Amazon One ID will be charged for items they took after they leave the store. If a customer is new to using the Amazon

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Area15 will open a second location in 2024, in Orlando.

One palm recognition service, they can enroll in less than a minute at any of the Amazon One enrollment kiosks located near the Just Walk Out technologyenabled stores on the arena’s main and upper concourses. Area15 – Immersive customer experience While Area15 in Las Vegas doesn’t host any professional sports teams, the 200,000-sq.-ft. center has plenty of other things going for it, including live events, museums, monumental art installations, unusual design elements, retail stores, bars and eateries. (Area15 will open a second outpost in 2024, a massive 300,000-sq.-ft. location in Orlando.) The venue specializes in “immersive activations,” with many using advanced virtual reality and augemented reality technology to engage consumers in cutting-edge, sometimes surreal experiences. At “Birdly,” for example, customers can soar (virtually) like a bird over a choice of three landscapes. The activation mimics every aspect of the avian experience. And on the more practical side, during peak COVID-19 pandemic periods, an AI-driven thermal scanning platform non-invasively screened visitors’ body temperatures and detected whether or not they were masked. MAY/JUNE 2022

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Realize Anything

What good is line of sight if you have no insight? Insight incites change and change at the right time is foresight. We’re experts in that—experts in seeing what’s coming in retail and offering data and insights for the path ahead. Examine everything, so you can realize anything.

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