Future bright for malls, physical retail, says report 1
By: Jeff Dervech - August 20, 2018 Future bright for malls, physical retail, says report

Despite some of the negative headlines, quality malls and well positioned brick and mortar retail is expected for robust growth in the coming decade. Over this period, annual consumer spending is estimated at 4.3% which will be fueled primarily by low unemployment and an expanding economy. As anchored department store tenants are redeveloped due to the change in meeting consumer demands, inline tenants will continue to fare much better as they are able to pivot...

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Retailers face six-month countdown until lease accounting changes take effect 2
By: Jeff Dervech - August 15, 2018 Retailers face six-month countdown until lease accounting changes take effect

Let the countdown begin! The arrival of new lease accounting regulations is on the horizon, less than 6 months out – January 2019. The new changes will require lease liabilities to be brought onto the balance sheet, requiring retail operators to recognize and report almost all lease obligations which has not necessarily been the case in the past. The purpose of this change by FASB is to improve transparency, comparability and financial reporting. This implementation...

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CVS launches online video medical services 3
By: Jeff Dervech - August 13, 2018 CVS launches online video medical services

CVS moves to add option for Doc On-line styled service. This is the way of the future for the drug-store chain as they look to transform their business model to incorporate expanded physician service offerings. It comes at a time where CVS is getting closer to acquiring Aetna and also as Amazon looks to enter the pharmacy space with its acquisition of online pharmacy Pill Pack. CVS will be using it retail presence as infrastructure...

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How Restaurants Use Automation to Optimize Operations 4
By: Jeff Dervech - August 9, 2018 How Restaurants Use Automation to Optimize Operations

Automation in Restaurants is continuing to increase! A study revealed that 54% of tasks preformed in restaurants can be automated. The declining costs of automated machines in conjunction with the rising cost of the labor market are increasing the appeal for fast food chains. Employees will always be needed at restaurants, but the question is to what degree? Some tasks can be completed by a “machine” but there are many components to a restaurant that...

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Property Owners, Managers & Tenants: How to Weather the Hurricane Season 5
By: Jeff Dervech - August 7, 2018 Property Owners, Managers & Tenants: How to Weather the Hurricane Season

As the hurricane season approaches us, the message is clearly and simply “be prepared”. Last year’s hurricane season caused a record $202 billion in damages in the US and approx. $370 billion worth worldwide. Property Owners must realize that there is a 30-day waiting period from the date a flood policy is purchased before the policy takes effect. Also for consideration, commercial property insurance usually does not include flood or business interpretation coverage “loss of...

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The Net Lease Retail Market is Showing a Shift, with Higher Cap Rates and More Listings 6
By: Jeff Dervech - August 1, 2018 The Net Lease Retail Market is Showing a Shift, with Higher Cap Rates and More Listings

Retail Investors continue to search for value-add opportunities composed with a tenant mix of e-commerce resistant and experiential tenants including such uses as medical, fitness, restaurants, grocery, entertainment and convenience. The Net Lease Market remains very strong despite headlines, although the average cap rate is up 10 basis points; many factors go into that (lease term, location of property, tenant credit, size of asset, etc.). Investor’s remains confident and the recent increase should not be...

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National Chains and Neighborhood Coffee Shops Threatens Starbucks’ Supremacy 7
By: Jeff Dervech - July 30, 2018 National Chains and Neighborhood Coffee Shops Threatens Starbucks’ Supremacy

Starbucks announces plans to slim and trim approx. 150 underperforming stores in 2019 particularly in urban markets in order to optimize their existing store base! This is a case of opening up stores too close together also known as “cannibalization”. Starbucks is still the 800-pound gorilla but is facing growing competition from trendy, independent neighborhood coffee shops. Starbucks will continue to expand, primarily by shifting their focus from urban to suburban in order to capitalize...

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Grocery-Anchored Sector Since Amazon's Acquisition of Whole Foods 8
By: Jeff Dervech - July 25, 2018 Grocery-Anchored Sector Since Amazon’s Acquisition of Whole Foods

The grocery anchored shopping center has traditionally been one of the safest investments within the commercial real estate sector, considered by many in the past to be “Internet-Proof”. Grocery Stores are seen as anchor tenants that drive traffic to a shopping center which in turn creates a retail synergy that supports the surrounding retail uses. Anchored shopping centers are the preferred retail investment with approx. 48% of investors seeking this product type in today’s market...

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The Fresh Market Closing 15 Store 9
By: Jeff Dervech - July 23, 2018 The Fresh Market Closing 15 Store

Interesting to see Fresh Market close 15 underperforming stores across the Southeast, important to note none of which are located in Florida, however, this decision was made based off an organizational analysis and careful consideration to the company’s overall growth strategy. Fresh Market currently operates 170 stores in 24 states. The company has publicly halted expansion plans for 2018 and has decided to focus on improving the core operations within its existing footprint. Fresh Market...

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Blockbuster Video's 2 Alaska Stores Close, Leaving Only 1 In Entire Country 10
By: Jeff Dervech - July 18, 2018 Blockbuster Video’s 2 Alaska Stores Close, Leaving Only 1 In Entire Country

Over the course of time, retail concepts go through an institutional life cycle. It starts with early growth, accelerated development, maturity and then decline. Blockbuster founded in 1985, grew and peak in 2004 with approximately 9,000 stores. Increased competition from entertainment services, closures, bankruptcy, and more closures lead to its decline. Blockbuster occupied great real estate in shopping centers and strip center plazas, many of these spaces were backfilled with healthcare operated uses. Blockbuster will...

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Walmart Expands Convenience Store Concept, Plans Additional Stores 11
By: Jeff Dervech - July 16, 2018 Walmart Expands Convenience Store Concept, Plans Additional Stores

Walmart opens New Fuel Station in Plano, Texas. The Walmart footprint is approx. 2,900 sf and will be situated in Supercenter parking lots. This comes after testing the c-store model in 2 test locations in Crowley, Texas and Rogers, Arkansas. Walmart plans to open 3 additional fuel stations in the Dallas MSA by year end 2018. This approach serves as a strategy to enter the convenience store business, capitalize on the excess real estate in...

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