ICSC Panel Discussion: "Going Green: Measuring REAL Economic Benefits for Landlords"

For those of you in the NY Tri-State Area, I am excited to announce an upcoming ICSC Alliance Program entitled "Going Green: Measuring REAL Economic Benefits for Landlords" on April 4th, 2013 from 7:30 - 10:00 am. These events are great for both learning and networking with retail real estate industry professionals and their public and non-profit sector partners. 

Program Overview
Industry experts will offer a practical primer on the costs and benefits from the Landlord’s perspective of incorporating green features into shopping centers. They will also discuss how to evaluate potential improvements affecting energy, water, waste and indoor environment from a financial perspective, how to partner with the public sector and tenants to achieve meaningful financial goals and lessons learned.  Examples of actual greening projects completed at area shopping centers will be used to meaningfully and realistically explain the benefits of these types of investments. 

My ICSC Alliance co-chair, Ellen Sinreich, President of Green Edge, LLC will moderate the discussion. Additional panelists include: 

• David DeVos, Global Director of Sustainability at Prudential Real Estate Investors
• Brian Hennessey, Managing Director at American Capital Energy

For more information and to register, click here. 

ICSC repost: "Cities hungrier than ever for retail development"

I stumbled upon this great little write up in today's email edition of Shopping Center's Today, a publication of the International Council of Shopping Centers. I thought I would re-post in its entirety because it speaks so well to the growing role of the public sector in retail leasing initiatives  As the ICSC Alliance Co-Chair for New York, I have also noticed an uptick in public sector interest in retail recruitment. I'll be at ICSC REcon this year and plan to keep an eye out for this trend. I'll also be live tweeting from sessions and from the trade show flow. You can find me on twitter at @cdadvisor. In the meantime, enjoy this interesting - and quite relevant - read!

Best, Larisa

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Hundreds of municipalities are emerging from the economic meltdown only to struggle with slimmer budgets in the face of closed stores and spending-shy residents. Little wonder that economic development officials are in pursuit of new retail blood to compensate, flocking to ICSC meetings and other deal-making venues in record numbers. “Municipalities are putting more emphasis on retail recruitment today because they know they need quality of place to make their communities more vibrant,” said Lacy Beasley, a municipalities consultant in the Nashville, Tenn., office of retail-advisory firm The Shopping Center Group. “They see it not only as a very necessary tax generator, but as a foundation for community growth.”

The municipalities section at RECon 2013 — titled the Cities of the World Pavilion — will play host to a record number of exhibitors this year, coming to hold a sort of international retailer “casting call.” This is the kind of thing that cities need to be doing, says Beasley. “Especially with retail being the fastest-changing and most dynamic of the sectors,” she said. She would know, having worked with 42 towns across four states, helping to enhance their retail rosters — and their tax rolls. Rural areas have been hit particularly hard by store closures and online retail, she says, and they need brick-and-mortar retail to help recover tax revenue.

Successful retail recruitment spurs other community improvements, argues Keith Sellars, CEO of the Washington, D.C. Economic Partnership. “With the job market hit so heavily, cities are also looking to retail as a source of job creation,” Sellars said. “Retail positions are great entry-level jobs for citizens who may not have acquired other skill sets yet.” The D.C. Partnership has become an annual fixture at RECon and is looking this year to build on the momentum of February’s ICSC Mid-Atlantic Idea Exchange, where its representatives juggled 45 meetings. Competition for retail has grown acute, Sellars says. Recruiters “have definitely upped their game, so we really need to be prepared when we meet brokers and developers to give them value for their time,” he said.

Cities have seen a marked increase in the formation of public-private partnerships to grease deals in recent years. “Retailers’ margins have been squeezed, and they’re looking to municipalities to help them out,” said Beasley. But cities that want to grow their retail tax base need to create a business-friendly environment first, she says. “They need to understand the demand versus the constraints they have put on retailers,” said Beasley. If restrictions are too difficult, retailers may decide to relocate down the road in some other municipality, she says. “Cities that show a progressive effort toward planning development will ultimately increase their sales tax and their property values as part of a strong, overall gain in revenue,” she said. “It’s a delicate balance.”

Source: Shopping Centers Today, March 15, 2013, Vol. 18, No.11

The Ten-Commandments of Retail Leasing (for Commercial District Managers)

Starting a district-wide retail leasing program is not for the faint of heart. The industry is based on relationships, and relationship building takes time. So be sure you are in it for the long-haul before investing your organizations time and resources. For those willing to take the leap, here are some basic tips to make sure that your organization's investment yields the results you are looking for. 

1. Enlist your property owners and their leasing agents FIRST. This is the biggest rookie mistake that commercial district manager make. Without your property owners, you do not have a retail attraction program. Don’t contact a retailer unless you have a property to show him, otherwise you waste everyone’s time, and your credibility in the industry takes a nose dive. This means getting your property owners engaged and formally enrolled in your effort BEFORE making the pitch. In some cases, this might mean a simple MOU or letter agreement with the property owner that outlines yours and their expectations about what involvement in your retail recruitment effort entails. It may mean that you hold the keys to spaces and they give you the right to show those spaces. If you are going to expend resources – and your time is a resource – on helping them lease their property – it’s better to be upfront about what you expect from them. This means a simple agreement that they will be responsive to when you call to set up meetings, that they will allow you to coordinate site visits and show the space. An MOU may not be necessary for this to happen, but it’s always helpful to outline expectations up front.    
2. Get out of the office and visit other districts.  Retail leasing is not something that is done well by sitting behind a desk. You always need to be on the look-out for concepts and stores that are a good fit for your district. Get out and visit stores, feel the merchandise, talk to retailers and cultivate those relationships. Consider visiting competitive districts in your region at least once a month to build your prospect list. This is particularly effective if you are looking for unique retail concepts. Emails have their place, but they do not replace face-to-face contact.
3. Build relationships with the broker community. Most commercial district managers are not leasing agents. If you don’t have brokers actively working with property owners, then maybe you have to learn this skill. But if not, work to build relationships with local brokers who you can enlist in your retail leasing effort. You don’t need to build relationships with retailer to the same degree if you have brokers doing this work on your behalf.  
4. Smaller retailers may be more open to your pitch. Keep in mind, national and chain retailers these days have lots of options, and they receive site submittals all the time. Be prepared to share sales data for your street. Smaller retailers are not often wooed in the same way. This gives you an opportunity to gain traction with a smaller retailer who may be flattered by your attention and interest in their business.
5. Trade shows have their place, but they are not the only game in town. Trade shows are where big deals get made. They are unique and effective opportunities to meet leasing representatives and retailers face to face (particularly national and regional chain retailers). But keep in mind that attendees are often interested in volume deals. Remember, this is also where mall owners go to sign multiple leases at a time. All it means is that standing out in the crowd with your single site opportunity may be more of a challenge. Don’t let this deter you, but keep it in mind.
6. Evaluate a potential tenant before approaching them. We offer our clients scout cards that they can use to evaluate the quality of potential prospects. These are particularly helpful if a Retail Leasing Task Force is engaged. The cards prompt a person to ask a series of questions that will help determine whether the retailer is a good fit for your district, including basic site selection requirements (sq. ft, leasehold rates, location, etc), expansion plans, target customer profile, etc. This way the prospects that Task Force members bring to the table can be evaluated against other similar prospects before determining whether it is worth spending time and resources. I personally love using scout cards because they can then become part of a tickler file that can be revisited on a monthly basis to determine who needs follow up.
7. Make sure you are prepared. Become an expert on the tenant your target. It’s better to have a good list of a dozen retailers to target properly, than a list of a hundred retailers who get your brochure and then toss it in the trash. What does that mean in practice? Be sure that the locations you offer are within the parameters of what a retailer expects. That means knowing where their other locations are and how they compare to your site. Know the company’s growth strategy, real estate priorities and be prepared to address those in your pitch. And finally, get to know the retailers target customer and be prepared to make a customized case that your community has enough customers to ensure a profitable location. If you are pitching to a business that serves families, cull data from your demographic and market analysis that speaks to the growth in household size. If you are pitching to a lunchtime food concept, share data on the number of local office workers. Think like the retailer you are approaching and customize your pitch. They will appreciate this.
8. Listen. Listen. Listen. I’ve said it before and I’ll say it again, this is about building relationships. People appreciate being heard – in fact, it makes you stand out in a crowd. So come prepared with a set of questions that you’d like to know and ask. At the end of the day, the more you know about your retailers site selection requirements, the better prepared you will be now and in the future to deliver spaces that are a good fit.  
9. Keep track of prospects and follow up. You may or may not have a site to show a prospect right now, but consider that the perfect site for a retailer you spoke to a few months ago might pop up in the near future. You will want to maintain a database of prospects and a call log to keep track of follow up over time.
10. This is a marathon, not a race. Successful retail leasing requires tenacity. There will always be vacancies to fill, even in a healthy market. The good news is that the skills you develop and the relationships you form make you more and more effective at retail leasing over time. So the longer you are at this the easier it becomes to fill vacancies. And the more vacancies you fill, the more property owners come to see you as a valuable resource in their retail leasing efforts. Overtime you will find that curating tenant mix for your district becomes a manageable - even fun! - task. 

Retail Recruitment 101: Tips for Identifying Potential Tenants

More and more communities and cities are taking proactive steps to attract retail. They conduct market data, develop attractive marketing material…and then what?  Too often, that material sits on a shelf. Or it gets mailed to a list of retailers without much response. Unfortunately, the mailbox becomes a veritable black hole where many organizations throw scarce marketing dollars.

While marketing material can be useful, retail attraction is ultimately a relationship-driven industry. And it’s one of the reasons why it can be so hard to gain initial traction with retail recruitment efforts. Cold calling retailers (or with national retailers - their tenant representatives), may not yield success at first because you are starting from scratch. You have no track record. Consider this - successful brokers take years to develop relationships with retailers by making it their full time job. Unless you are prepared to do the same – and few organizations have the resources to do so –consider a different approach. Actively enroll  partners in your efforts to find suitable retailers for your community.

What does “active enrollment” look like? One strategy is to develop a Retail Attraction Task Force and engage members in proactive prospecting. On a monthly basis, ask them to bring potential prospects to the group for consideration and evaluation. Before setting them about their task, below are some tips for effectively combing the local market for tenant leads. These strategies combine a mix of formal and informal efforts. Here are just few options:

Keep up with the News

·            Keep up with the retail industry trade publications, including Retail Traffic, Shopping Centers Today, your local business newspaper, etc. that cover retailers in expansion mode. Local newspapers may also include stories on successful retailers.

Network

·               Use your broker network. Commercial brokers have knowledge of retail trends and relationships with tenants looking to expand or relocate.

·               Go to industry networking events; consider joining the Real Estate Board of New York or the International Council of Shopping Centers.

·               Shop Business Plan competitions. The winners of these competitions are well prepared and eager to start businesses.

·               Reach out to other BIDs, merchant associations or CDCs with similar demographics and ask them who about retailers in their district who might be poised for expansion.

·               Comb the databases. Many commercial brokerage firms maintain subscriptions to retail databases, including Plain Vanilla Shell, Crittenden Online, Tenant Search and InfoUSA that provide information about retailers and their expansion plans. Beware however, if you choose to do this yourself. This strategy involves expense (most of these require monthly or annual subscriptions) that will give you long lists of retailers that you will need to investigate. Many will be national chains and cold calling or mailing will not yield much response without significant follow up efforts.

Eat and Shop (this is the best part!)

·               Identify similar districts and visit them on a regular basis to identify potential tenants.

·               As you shop and dine in other neighborhoods, make a point of asking to speak to the owner and congratulating them on their business. Use this as an opportunity to build relationships with business owners that might be a good fit on your district. Remember, successful business owners are often looking to expand. This is a great opportunity to get your community on their radar.

·               Get referrals from merchants about their competitors. Existing businesses are often a wonderfully underutilized source of leads. Many business owners know other business owners who are interested in expansion.

·               Look at existing businesses in neighboring district. Sometimes existing tenants need to expand but cannot do so in their current location. Helping them identify a second location in your district is a way to help these small business expand. Sometimes communities fear that this will be perceived as poaching. The fact is, if a retailer is doing well in one location, they will not close that store. Instead, they are likely looking for opportunities to grow their market by opening a second or even third location. Also, keep in mind that a retailer looking to open a third location is a stronger option than a retailer figuring out the logistics for the first time of managing a second location.

Advertise

·           Craigslist has emerged as one of the more powerful tools in retail recruitment, especially among smaller entrepreneurs seeking retail space. Consider place a Craigslist ad for your community. Offer a few examples of spaces available and a few bullet points about the strength of the market, and then tell interested parties to contact your organization to set up a tour.  

·          Market your services as a clearinghouse for pre-qualified leads to brokers and property owners.

·           Sponsor a ‘Storefront Stroll’ – coordinate with your property owners and brokers and arrange for a day when multiple vacant storefronts will be available for viewing within your district.

Get Creative! Don’t be limited by this list. Every conversation and interaction with your networks is an opportunity to grow your prospect list.

Remember, prospecting can be fun. Who doesn’t like to shop and dine out? Just be sure to use these opportunities to find prospects and develop relationships with new business owners. 

What our Scribes Have to Say: Checking in on Philly and Pittsburgh

Last February in a post called "The Power of the Scribe: Sharing Your Stories and Building Buzz" we discussed how important it is to document your revitalization efforts - not just in terms of numbers, but through stories. At that time, our firm was just wrapping up a project with LISC MetroEdge and the Institute for Comprehensive Community Development (ICCD) in Rhode Island, where we had a scribe writing throughout the project to track progress and generate excitement. Now we've called upon our scribes again to cover two exciting projects with LISC and ICCD in Philadelphia and Pittsburgh. Take a look at our scribes' first pieces on the projects below:

Lawrenceville's Big Day

By Dana Allwein

MetroEdge starts researching how to foster a grassroots mainstay in Pittsburgh.

Philly Stake

By Pam Thomas

A model block and other new programs offer a commercial corridor in Philadelphia’s Fishtown community a chance to shine.