News
Retail's New World Order
August 16, 2012
| The crowd at Bisnow’s Retail Real Estate Summit at The Westin Waterfront had a chance to hear how landlords, retailers, builders, and architects are adjusting to the omnipresent Internet (15 years ago, who knew it would be more than just a place to complain about Star Wars?), shifting consumer preferences, and new retailer business models. | |
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| Our panel: Sponsor and Timberline Construction prez Steven Kelly, Arrowstreet principal Scott Pollack (moderator and sponsor), Brixmor Property Group SVP Northeast Barry Rodenstein, Legal Sea Foods' director of design and construction Ed Mitchell, UrbanMeritage principal Michael Jammen, and Edens CEO Terry Brown. An improving economy is infusing retailers and landlords with more confidence. As several big boxes fade away or go to smaller stores, landlords like Brixmor and Edens see an opportunity to attract new tenants with new store concepts at new rents. (Sounds like a good time to open that magic store we've always dreamed of.) | |
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| Retailers Association of Massachusetts prez Jon Hurst, an industry lobbyist, says a top priority is to better align sales tax policy with the new world of online shopping. With Amazon now leasing brick and mortar space in Massachusetts, the state has more taxing options and may recoup some of the $330M/year in sales tax revenue that escapes into cyberspace. But, Jon says, the online shopping phenomenon really calls for a federal response. Just how much does the sales tax influence shoppers? Jon tells us that during last weekend’s sales tax holiday here, several retailers in his group reported a 10% increase in sales. (A better question is where does sales tax go on holiday? It likes to be near the equator.) | |
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| Barry is seeing a “significant" rise in retailer confidence with the larger, solid retailers aiming to grow their store counts. Today, property owners are focusing primarily on redevelopment (as opposed to new development). Brixmor, which owns 621 shopping centers with 96M SF, including 75 with 11M SF in the Northeast, recently completed redevelopments scheduled to open Oct. 1: Killingly Plaza in Killingly, Conn., where a former 40k SF grocer was replaced with a 55k SF Kohls and College Plaza in Selden, NY where Shop Rite took 67k SF and former occupant Bob’s was relocated and rightsized into nearly 31k SF. | |
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| Change creates opportunity for innovation, says to Edens’ Terry Brown, here with colleagues Sam Judd and Elizabeth Furnelli. To create a retail experiences that will draw consumers away from their homes, computers, and mobile devices, Edens is looking for urban locations, even though owning them may yield a lesser upfront return. Attention-grabbing retailers include: chef-driven restaurants, boutique apparel, and “anything organic.” Edens is willing to make the capital investments to open these stores. It’s also a big believer in consumer-facing tech apps and has a large staff of young social media experts to engage its retailers and consumers. | |
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| Mike Jammen (center), with Steven Kelly, says that as a retail property owner and investor on Newbury Street, he looks for retailers not found in malls. Shoppers who make a special trip into the city and deal with parking want a distinctive experience. Miek is finding interest among European companies, though they move at a “glacial pace.” | |
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| Like many other retailers and restaurants, Legal Sea Foods is moving away from malls and into downtowns (in Boston, Philly, and DC) and is now changing its store concepts and designs, Ed says. Choosing the right spot, meanwhile, isn’t just demographics; it’s also vision and instincts. Ed confesses that gazing into Roger’s crystal ball always helps too; of course, that’s owner Roger Berkowitz. Six years ago, Legal was among the first restaurant groups to recognize the potential of the now hot Seaport District, opening LTK (Legal Test Kitchen). Last year, it made a big splash with the new flagship Legal Harborside. |
