Proactive Ownership and Tenant-Centric Strategies: Always Be Deal-Ready
By David Strusiner, Craig Steven Development Corporation
When you are a real estate developer, investor or owner, your work is never done. Market trends, consumer behavior, and macro- and micro-economic factors are just a few of the areas that we monitor to ensure we are being proactive. Successful ownership also requires our investment into the physical spaces themselves, relationships with our tenants and prospective tenants, and communicative, effective asset management.
In my 30+ years in commercial real estate in Chicagoland, where our company has amassed a portfolio of over 4 million square feet of which 1.3 million square feet is in retail, I think I’ve seen everything. Even when a center is 100% occupied with long-term leases, we have to be always vigilant for the next deal. The reality
is that tenants leave, even national, regional or local retailers with multiple locations and successful operations, at least on the surface, can surprise you. Whether this is a corporate bankruptcy or a successful restaurant vacating overnight without notice (which happened to us recently), our pipeline of prospective tenants must be robust and we need to add to it continuously.
Because we are in constant conversations with retailers for potential use of our space across the portfolio, I wanted to share a few observations.
The Continued Evolution of Retail
While I’ve often touted food, fitness and medtail as the most active categories to backfill space,
we’ve seen an influx of specialty uses that are particularly interesting. From hobby stores to shoe stores to online retailers opening bricksand-mortar locations, we’ve made a conscious decision to entertain the use, and it’s added more diversified co-tenancy to our centers. Destination-based specialty retail delivers an entirely different visitor to the center, often from a much larger radius than the typical foot traffic at a neighborhood center. We have found that embracing out-of-the-box non-traditional retail has enabled our portfolio to maintain over 90% occupancy over economic and real estate cycles.
Leverage Resources for Sourcing Tenants
National and regional retail conferences remain the most effective sources for information on
Image by Phil Reese from Pixabay
“As owners who continue to grow and evolve within the industry, my recommendation is that we continue to embrace out-of-the-box solutions to ownership challenges – entertain the use, relentlessly pursue market knowledge, and create practical ways to help tenants open.”
classifications of retailers and the retailers themselves who are expanding. We leverage these opportunities to get face time with current tenants, meet other groups expanding into our market immediately or in the future, network with tenant representation brokers, and gain insight into broader market trends.
On occasion I will speak to a landlord representation broker who doesn’t attend conferences or industry events. This makes no sense to me as a landlord with decades of conference experience myself – what could keep a landlord’s broker relevant and knowledgeable more than a room full of retailers? As an extension of the landlord, especially when the owner themselves are not able to be present, effective representation requires active engagement with the tenant community.
I have often used conferences to meet with tenants who have one or two locations in our portfolio. In addition to showing them additional locations we own, I am able to get their feedback on existing locations and establish rapport for when issues may arise. Countless tours with new market entrants have been scheduled at our properties due to tradeshow conversations. LOIs have been negotiated, lease accommodations have been confirmed, leases have been signed.
In addition to our brokers’ outreach lists to source tenants for our centers, Craig Steven has a list of tenant representation brokers that we update regularly to ensure no local emerging concepts fall through the cracks. If the market knows you are open to having a conversation about a use, they are far more likely to approach you.
space to prospective tenants. Both landlord and tenant benefit when the space is visually unencumbered and immediately ready for the tenant’s vision, design, and buildout – it allows for a compressed timeline where the tenant can open and become profitable more quickly, which benefits everyone!
More and more we are delivering turnkey space to new tenants – a scenario in which we do not offer TI but rather build out their spaces ourselves. Because we have an internal team with decades of experience in space planning and the deep experience of hundreds of retail projects, we have found this service meets tenants exactly where they need help. Fewer in-house real estate development departments, leads for construction companies, and availability of construction resources have made this a critical component of our work.
Physical Space
It can be incredibly difficult for a tenant to visualize a space when the former tenant’s fixtures and equipment remain. It can be costly to remove it, especially if it’s restaurant equipment, and we carefully consider the length of time we market a space as 2nd generation restaurant space before we return the space to vanilla box. For most spaces, though, we return formerly occupied space to vanilla box for the leasing process and to show the
As owners who continue to grow and evolve within the industry, my recommendation is that we continue to embrace out-of-the-box solutions to ownership challenges – entertain the use, relentlessly pursue market knowledge, and create practical ways to help tenants open.
David Strusiner Is vice president and owner of Craig Steven Development Corporation. To explore the Craig Steven Development Corporation portfolio of retail space, visit https:// craigsteven.com/retail/.
David Strusiner
Convenience stores vs. fast food? The convenience stores are winning
By Dan Rafter
Remember when a convenience store meal meant a bag of chips, stick of beef jerky and a bottle of pop? You can still get all that. But you can also nab prepared meals, hot sandwiches, salads and wraps. And these increased offerings are hitting fast-food chains.
Coldwell Banker Commercial in its latest Trend Report focused on how convenience stores have shifted from a place for consumers to stop quickly for snacks and fuel to popular food destinations. This shift has made these stores an increasingly attractive asset class for commercial real estate investors, according to the Coldwell Banker Commercial report.
These stores are especially popular for investors in the net-lease market.
“The convenience store industry is evolving to meet changing consumer needs,” said Dan Spiegel, senior vice president and managing director of Coldwell Banker Commercial, in a statement. “With smaller households, more urban locations and evolving food preferences, the sector is undergoing significant transformation. Given their frequent visits, convenience stores must stay closely connected to shifting consumer lifestyles to remain competitive in the retail market.”
Convenience store product mix drives growth
The report highlights how convenience stores have evolved from fuel and snack retailers into quick-service food and grocery alternatives.
This shift is most evident in the type of products that convenience stores offer. According to Coldwell Banker Commercial’s report, the sales of prepared food at convenience stores have risen 12.2% year-over-year.
In bad news for the country’s fast-food restaurants, the report also found that 56% of consumers now consider convenience stores to be viable substitutes for fast-food chains.
This growth, fueled by consumers’ demand for convenient, affordable and healthier food
options, has added to the sector’s stability, even though profit margins remain narrow at around 5% to 7%. Coldwell Banker Commercial reported that the high turnover of products and steady consumer visits overcome the tight margins, making convenience stores a reliable source of income for investors.
The shift in consumer behavior–especially as inflation raises grocery prices–has positioned convenience stores as an attractive alternative for those seeking fresh food at affordable prices, according to the trends report.
Changing real estate needs
As convenience stores continue to add to their food offerings, their real estate needs are expanding.
In its report, Coldwell Banker Commercial points to chains like QuikTrip, Casey’s General Stores, RaceTrac and Wawa. These chains are investing in larger store formats to accommodate their expanding food preparation areas.
Many operators are also opening new locations in urban centers and exploring non-traditional spaces such as college campuses and downtown
locations. These provide new opportunities for real estate investors.
Investment 0pportunities for convenience stores
Even though 60% of convenience stores are independently owned, the sector is seeing significant consolidation. Major players like 7-Eleven plan to open 500 new stores in the United States and Canada by 2027, while regional chains such as Wawa, Sheetz and Bucee’s are expanding into new markets.
This consolidation creates opportunities for investors to acquire properties with stronger tenant profiles and more predictable cash flows.
The sector’s strong position, driven by convenient locations, long-term leases (up to 20 years) and low vacancy rates, makes this asset class a stable investment option in the netlease market. These factors, combined with steady demand, make the sector appealing to net-lease investors seeking reliable, long-term returns.
Image by Freepik
Today’s retail landscape: From closures to comebacks
By Lanie Beck
Recent headlines have been filled with bankruptcy announcements, failed mergers and acquisitions and going out of business sales. But the future is expected to be brighter across the retail sector as brands across a variety of industries look to expand.
Closed doors lead to opportunities
In the coming months, tenants like Big Lots, Party City, CVS Pharmacy and Walgreens, among others, will shutter locations across the country, leaving significant vacancies in both the net-lease retail and shopping center markets.
While some of the storefronts are likely to remain vacant for the foreseeable future, opportunistic tenants in growth mode will be quick to identify the most attractive locations and backfill those spaces.
Ollie’s Bargain Outlet, Barnes and Noble, Burlington, Michaels and Haverty’s are among the retail brands that have recently acquired leases as other big box stores go out of business. This strategy has allowed tenants to not only capitalize on high-quality, high-traffic sites, but also
solves the challenge of expanding in a low-vacancy market.
As shopping center anchors and big-box retailers continue to explore these opportunities, it’s not quite as easy in the single-tenant net-lease market. Net-lease retailers often have strict construction and branding guidelines, requiring build-to-suit solutions. For example, we wouldn’t see Dutch Bros Coffee explore a former Walgreens property as it looks to identify thousands of new potential locations over the coming years.
Instead, it is more likely that shuttered freestanding and junior box locations will be targeted by tenants with more flexibility, such as independent businesses looking to serve their local consumer base from an upgraded location.
Redevelopment or demolition also becomes an option, especially for sites with good ingress/ egress in high-traffic areas. While a vacant CVS Pharmacy won’t solve the physical real estate requirements of a Chick-fil-A, for example, the site itself might justify a tear-down.
2025 and beyond
Over the next several years, thousands of new stores and restaurants are expected to open as retailers look to expand their customer reach.
Quick-service restaurants and convenience stores are among the sectors expanding most aggressively, with Jack In The Box, Slim Chickens, Wawa and Sheetz all targeting massive growth. Discount retailers, like Five Below and Ross Dress For Less, have also announced significant growth plans, as consumers remain cost-conscious. Additionally, retailers that have maintained their footprints in recent years, including Lowe’s and Walmart, have identified now as the time to start growing again.
Will 2025 be a pivotal year for closures and consolidation, or will it instead be a year remembered for substantial growth among established and emerging brands?
Lanie Beck is senior director of content and marketing research at Northmarq.
Image by Pexels from Pixabay
River Pointe of Algonquin Phase I
Bloomingdale Town Centre NEC Lake St & Bloomingdale Road
Year Built/Year Renovated: 1996
Type of Center: Neighborhood No. of Stores: 9
Total Space: 32,246
Total Available Space: 0
Available Minimum: 0
Maximum Contiguous: 0
Anchor Tenants: AccuQuest Hearing Center, Pink Hair Studio, DG Market
Rental Rate: $19.00
Total Passthroughs: $6.88
Bloomingdale Town Centre Phase III
NEC Lake St & Bloomingdale Road
Year Built/Year Renovated: 2005
Type of Center: Neighborhood No. of Stores:
Total Space: 15,000
Total Available Space: 15,000
Available Minimum: 1,200
Maximum Contiguous: 15,000
Anchor Tenants: Future Development
Rental Rate:
Total Passthroughs:
Aurora Restaurant
Year Built/Year Renovated: 2008
Type of Center: Community No. of Stores: 24
Total Space: 14,715
Total Available Space: 6,334
Available Minimum: 1,200
Maximum Contiguous: 6,334
Anchor Tenants: Tropical Smoothie Cafe, Bank of America, Double Yolk Pancake House, Verizon
Rental Rate: $21
Total Passthroughs: Contact Broker
Year Built/Year Renovated:
Type of Center: Mixed Use No. of Stores: N/A
Total Space: 53,000
Total Available Space: 4,000
Available Minimum: 4,000
Maximum Contiguous: 4,000
Anchor Tenants: Paramount Theatre, Altiro Latin Fushion, Craft Urban, Charlie’s Silver Spoon Creamery
Rental Rate: Contact Broker
Total Passthroughs: Contact Broker
The Courtyard at Stratford 357-369 W. Army Trail Road
Year Built/Year Renovated: 1983
Type of Center: Neighborhood No. of Stores: 17
Total Space: 20,890
Total Available Space: 0
Available Minimum: 0
Maximum Contiguous: 0
Anchor Tenants: For Eyes, Men’s Warehouse, FedEx, Fry n wings
Rental Rate: $21
Total Passthroughs: $6.28
David Strusiner
Craig/Steven Development Corporation (847) 504.8061 Brink Street Market 30-40 N. Williams Street
Country Corners
Year Built/Year Renovated: 1989
Type of Center: Neighborhood No. of Stores: 13
Total Space: 28,042
Total Available Space: 0
Available Minimum: 0
Maximum Contiguous: 0
Anchor Tenants: Starbucks, Benedicts La Strata, The Running Depot
Rental Rate: $15.00
Total Passthroughs: $7.69 David Strusiner
Craig/Steven Development Corporation (847) 504.8061
Year Built/Year Renovated: 2008
Type of Center: Community No. of Stores: 15
Total Space: 124,000
Total Available Space: 5,400
Available Minimum: 2,400
Maximum Contiguous: 3,000
Anchor Tenants: Petco, Savers, Dollar Tree, LaRosita Market
Rental Rate: $16.00-$20.00
Total Passthroughs: $5.30
Year Built/Year Renovated: 2021
Type of Center: Neighborhood No. of Stores: 16
Total Space: 73,000
Total Available Space: Please call
Available Minimum: Please call
Maximum Contiguous: Please call
Rental Rate: Please call
Total Passthroughs: Please call
Anchor Tenants: Jewel/Osco, ATI Physical Therapy, Dunkin Donuts, The UPS Store
Elmhurst
Crystal Lake
Lexington Square NWC York Road & Lexington Street
Plaza
Corners
Year Built/Year Renovated: 2004
Type of Center: Neighborhood No. of Stores: 8
Total Space: 33,000
Total Available Space: Please call
Available Minimum: Please call
Maximum Contiguous: Please call
Anchor Tenants: Fresh Start Cafe, Ace Hardware, W3Body
Rental Rate: Please call
Total Passthroughs: Please call
Year Built/Year Renovated: 1985
Type of Center: Neighborhood No. of Stores: 14
Total Space: 29,564
Total Available Space: 0
Available Minimum: 0
Maximum Contiguous: 0
Charles S. Margosian Highland Management Assoc., Inc. (630) 691.1122
Anchor Tenants: Walgreens, For-Eyes Optical, Kenny The Kleener, Rockstar Nail & Spa
Rental Rate: $19.00
Total Passthroughs: $11.46
Year Built/Year Renovated: 1989
Type of Center: Neighborhood No. of Stores: 15
Total Space: 21,462
Total Available Space: 1,158
Available Minimum: 1,158
Maximum Contiguous: 1,158
Anchor Tenants: Vitalant, Harbor Coin, Jimmy Johns, Kumon Learning Center
Rental Rate: $18.00
Total Passthroughs: $9.84
Year Built/Year Renovated: 1984
Type of Center: Neighborhood No. of Stores: 20
Total Space: 45,188
Total Available Space: 5,593
Available Minimum: 1,297
Maximum Contiguous: 3,340
Anchor Tenants: Walker Bros. Restaurant, Dairy Queen, The Bar Method, New Balance, Stretch Lab
Rental Rate: $18.00
Total Passthroughs: $10.51
Gurnee
Highland Park
Evanston
Year Built/Year Renovated: 2000
Type of Center: Neighborhood No. of Stores: 20
Total Space: 38,980
Total Available Space: 5,618
Available Minimum: 2,250
Maximum Contiguous: 3,368
Anchor Tenants: Jewel/Osco, Starbucks, Orangetheory Fitness, Lou Malnati’s, ATI Physical Therapy
Rental Rate: $20.00-$25.00
Total Passthroughs: $15.55
Year Built/Year Renovated: 1989 Type of Center: Neighborhood No. of Stores: 12
Total Space: 32,849
Total Available Space: 8,744
Available Minimum: 1,206
Maximum Contiguous: 6,331
Anchor Tenants: Walgreens, Lou Malnati Pizzeria, Avalon Spa Rental Rate: $20.00
Total Passthroughs: $8.56
Year Built/Year Renovated: 1983/2003
Type of Center: Neighborhood No. of Stores:
Total Space: 75,000
Total Available Space: 0
Available Minimum: 0
Maximum Contiguous: 0
Anchor Tenants: Jewel/Osco, iHop
Rental Rate: Please call
Total Passthroughs: Please call
Total Space: 16,937
Total Available Space: 8,483
Available Minimum: 1,702
Maximum Contiguous: 4,939
Anchor Tenants: Apple Store, Ramsay’s Kitchen, Filson, Bluemercury
Rental Rate: Contact Broker
Total Passthroughs Contact Broker
Naper Ridge Plaza
Naper Boulevard & Ridgeland Ave
Year Built/Year Renovated: 2004
Type of Center: Neighborhood No. of Stores: 2
Total Space: 30,000
Total Available Space: 25,000
Available Minimum:
Maximum Contiguous:
Anchor Tenants: Office Depot, Fifth Third Bank
Rental Rate: Please call
Total Passthroughs: Please Call
Year Built/Year Renovated: 2018
Type of Center: Neighborhood No. of Stores: 10
Total Space: 18,500
Total Available Space: 0
Available Minimum: 0
Maximum Contiguous: 0
Anchor Tenants: Great Clips, Spice Mart
Rental Rate: Please call
Total Passthroughs: Please call
Year Built/Year Renovated: 2016
Type of Center: Neighborhood No. of Stores: 14
Total Space: 24,883
Total Available Space: 0
Available Minimum: 0
Maximum Contiguous: 0
Anchor Tenants: Jewel/Osco
Rental Rate: Please call
Total Passthroughs: Please call
Year Built/Year Renovated: 1988
Type of Center: Neighborhood No. of Stores: 30
Total Space: 61,121
Total Available Space: 11,500
Available Minimum: 1,400
Maximum Contiguous: 3,000
Anchor Tenants:Clothes Mentor, Culver’s, Namaste Grocery Store
Rental Rate: $16.00
Total Passthroughs: $8.11
S. Margosian
S. Margosian
Total Space: 10,000
Total Available Space: 10,000
Available Minimum: 3,800
Maximum Contiguous: 10,000
Anchor Tenants: Rental Rate: $18.00-$25.00 Total Passthroughs:
Total
Available Minimum: 2,500
Maximum Contiguous: 12,000
Anchor
Total Passthroughs:
Total
Anchor
Rental
Total
Total
Palatine
The Shoppes at Stony Creek
Year Built/Year Renovated: 2023
Type of Center: Community No. of Stores: 17
Total Space: 39,393
Total Available Space: 0
Available Minimum: 0
Maximum Contiguous: 0
Anchor Tenants: Jewel/Osco, Ace Hardware
Rental Rate: Please call
Total Passthroughs: Please call
Year Built/Year Renovated: To Be Built
Type of Center: Neighborhood No. of Stores: TBD
Total Space: 18,000
Total Available Space: 18,000
Available Minimum: 1,200
Maximum Contiguous: 12,000
Anchor Tenants: Jewel/Osco, McDonald’s, JP Morgan Chase
Rental Rate: Please Call
Year Built/Year Renovated: 2004
Type of Center: Neighborhood No. of Stores: 13
Total Space: 29,748
Total Available Space: 2,561
Available Minimum: 1,169
Maximum Contiguous: 0
Anchor Tenants: Lou Malnati’s, CK Salon, Home of the Sparrow, Aki of Japan
Rental Rate: $12.00-19.00
Total Passthroughs: $5.36
Year Built/Year Renovated: 1985
Type of Center: Neighborhood No. of Stores:
Total Space: 19,553
Total Available Space: 1,200
Available Minimum: 0
Maximum Contiguous: 0
Anchor Tenants: Dollar General, Supercuts, Stella’s
Rental Rate: $16.00
Total Passthroughs: $4.10
Year Built/Year Renovated: 1970/1987
Type of Center: Neighborhood
No. of Stores:
Total Space: 100,000
Total Available Space: 13,685
Available Minimum: 1,500
Maximum Contiguous: 10,000
Anchor Tenants: Jimenez Foods, Mark Drug Medical Supply
Rental Rate:
Total Passthroughs:
