Late-Cycle Real Estate Investing Has Done a 180 1
By: Jeff Dervech - March 14, 2019 Late-Cycle Real Estate Investing Has Done a 180

The current real estate cycle is considered to be in the later innings of the baseball game with some calling it a post 7th inning stretch and others describing it as long in the tooth, more closely resembling a game in extra innings. One thing is for certain, the back end to this real estate cycle is much different than the lead-up to the 2008 financial crisis. Overall leverage and lending practices are much more...

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Late-Cycle Real Estate Investing Has Done a 180 2
By: Jeff Dervech - March 11, 2019 Dollar Tree to Renovate 1,000-plus Family Dollar Stores; Close Up to 390 Others

Dollar Stores continue to grow and evolve! Dollar Tree, which has over 7,000+ stores and owns Family Dollar with over 8,000+ stores, announced a commitment to renovating 1,000 Family Dollar units in the coming year. The plan calls for the company to rebrand 200 Family Dollar stores to the Dollar Tree banner and completely close approx. 390 Family Dollar units across the country. The company announced its 4th quarter results from March 6th, 2019 with...

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Late-Cycle Real Estate Investing Has Done a 180 3
By: Jeff Dervech - March 7, 2019 What Will Happen to All of the Vacant Sears/Kmart Boxes?

What will happen to the hundreds of shuttered Kmart and Sears locations around the country? The retail locations formally occupied by these tenants will be repurposed or redeveloped to meet current market demands, with the exact use or concept to be dictated by the individual trade areas of which these locations lay. Most of these former Sears and Kmart boxes are old and functionally obsolete, ranging between 100,000 – 200,000 SF and in many instances...

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Late-Cycle Real Estate Investing Has Done a 180 4
By: Jeff Dervech - March 4, 2019 New Grocery Store Business Coming from Amazon?

Amazon interested to open a new grocery store model separate from its Whole Foods Concept. The intent was that Amazon wanted to enter the grocery business by way of its Whole Foods acquisition, however their desire appears to exceed purely as a reformat and transformation of just that grocery brand alone. Their recent efforts as reported by the Wall Street Journal includes the plans of opening a grocery store in Los Angeles this year, with...

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Late-Cycle Real Estate Investing Has Done a 180 5
By: Jeff Dervech - March 2, 2019 Strip Malls: The Least Glamorous Segment In Retail Is Among The Sector’s Strongest Performers

E-Commerce Resistant! Strip Centers continue to be a desirable asset class for investors to own. The shopping center tenant mix is usually composed of more internet resistant and service-based uses, concepts from restaurant to medical to daily service needs. The locations of these properties traditionally are in the middle of neighborhoods and can conveniently serve the local population. Strip Centers with good signage, parking, and accessibility will continue to be in high demand. Why is...

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Late-Cycle Real Estate Investing Has Done a 180 6
By: Jeff Dervech - February 27, 2019 NRF study says consumers shop at discount retailers regardless of age or income

Everyone likes a bargain regardless of age or income! Majority of U.S. consumers are driven by value and have remained price-conscious shoppers throughout time, regularly visiting discount retailers to seek out a bargain. Regardless of age, looking for the best price remains to be a habit in consumers of almost every demographic group. The art of a steal, is what drives this desire regardless if the consumer is capable of affording to shop elsewhere. The...

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Late-Cycle Real Estate Investing Has Done a 180 7
By: Jeff Dervech - February 19, 2019 CRE Investors can still profit from Retail Real Estate – If they stick with Service-Oriented Tenants

Real estate will continue to be a safe harbor for investors in our time of extreme uncertainty as we move into the future. As investors seek out new investments to deploy capital, they should seek out retail investment properties that include service-oriented uses, experimental retail, and internet resistant concepts as they are more likely to provide healthy, risk adjusted returns. With so many sources of potential market volatility threatening investors, U.S. real estate remains a...

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Late-Cycle Real Estate Investing Has Done a 180 8
By: Jeff Dervech - February 11, 2019 Thriving “Self-Care” Sector Fuels Demand for Strip Center Space

Fitness and Self Care Concepts continue to warrant strong demand for space in strip centers. The “self-care” sector which includes wellness, health, fitness, and beauty is a growing business as more and more people are investing their discretionary income into themselves. Majority of these self-care tenants are offering memberships instead of a pay as you go model which bodes well for shopping center owners, adjacent tenants, and retail foot traffic at these properties as it...

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Late-Cycle Real Estate Investing Has Done a 180 9
By: Jeff Dervech - December 17, 2018 Dollar General Plans Nearly 1,000 New Stores Next Year

Dollar General plans to open 975 new stores and remodel over 1,000 stores in FY 2019 which begins in February. Part of their plan includes the incorporation of produce and expanded food selections into areas of which lack grocery options. The addition of produce and expanded grocery is an opportunity to offer a solution to a need especially in more rural and urban communities deemed as a “food desert”. A food desert is an area...

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Late-Cycle Real Estate Investing Has Done a 180 10
By: Jeff Dervech - December 12, 2018 Inside Walmart’s plans to convert parking lots into ‘town center’

“What do we do with all of this excess parking at our Walmart stores? Let’s create town centers!” – Walmart Executive Walmart has announced plans to capitalize on their existing real estate to reutilize excess parking fields for new town center retail developments. This is a new campaign spearheaded by Walmart called “Walmart Reimagined” which was unrevealed in October 2018 at the ICSC Southeast Conference in Atlanta. This is a great way for Walmart to...

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Late-Cycle Real Estate Investing Has Done a 180 11
By: Jeff Dervech - December 10, 2018 Kroger, Walgreens step up grocery pilot

Kroger enters into grocery partnership with Walgreens! This partnership is a format for Kroger to offer a defined branded section within the Walgreens store footprint to sell groceries. The average Kroger grocery section in the new Walgreens program is going to be approx. 4,000 sf which is roughly about a 30% of the average Walgreens selling space. This move positions both companies to reach new customers and reshape their businesses in order to account for...

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Late-Cycle Real Estate Investing Has Done a 180 12
By: Jeff Dervech - December 5, 2018 Omni-channel a boon for retailers, former Walmart head says!

Success in the future of retail requires the embracing and implementation of omni-channel into marketing and business operations. The retailers that perform this well will receive a “double whammy” as they capitalize from online in addition to brick and mortar. In the review of the recently passed 2018 Thanksgiving weekend holiday shopping stretch (Black Friday through Cyber Monday), 88% of US adults bought merchandise from physical retailers, whether through their online websites or directly in...

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Late-Cycle Real Estate Investing Has Done a 180 13
By: Jeff Dervech - December 3, 2018 Innovation distinguishes crop of new retail, mixed-use developments

Retail Development is expected to increase for 2019 when compared to 2018 with more than $90M square feet of new retail projected of which includes redevelopments, new restaurants, grocery anchored shopping centers and urban styled experience projects. FY 2018 is on pace to end up slightly less than $70M sf of new retail. The focus for developers will continue to be on mixed use projects that are e-commerce resistant and that continue to add an...

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Late-Cycle Real Estate Investing Has Done a 180 14
By: Jeff Dervech - November 29, 2018 Analysis: TJX is a retailer for all seasons

TJX is a strong tenant for a shopping center landlord for many reasons and throughout all seasons! Everyone wants a bargain! As consumers look to stretch their dollar, this retailer continues to provide options that are aspirational and economical which bodes well in this sector of the market. They consistently drive traffic to their stores by keeping customers engaged and by regularly changing their instore assortments. This prompts regular visits by shoppers which in turn...

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Late-Cycle Real Estate Investing Has Done a 180 15
By: Jeff Dervech - November 27, 2018 Ikea Eyes US Sites to Anchor Mixed Use Development

Ikea is looking to open 6 new stores within mixed use retail projects that they plan to self-develop over the next 2 years. The company calls these stores “Meeting Places” and will look to high profile cities in core urban markets for this concept which will include an Ikea store, a home goods big box and a mall featuring entertainment uses and other international retail brands. The standard footprint for these new locations with range...

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Late-Cycle Real Estate Investing Has Done a 180 16
By: Jeff Dervech - November 27, 2018 Malls compete for shoppers from e-commerce ahead of holidays

This holiday shopping season sales could exceed $1 trillion of which 87.5% will be done in brick and mortar business. It is all about creating a great environment and great services for your consumer to make shopping as seamless and as frictionless as possible. Mall landlords are implementing curbside delivery in which consumers come to the mall, make their purchases, continue shopping and items are individually picked up, aggregated together and delivered to their car...

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Late-Cycle Real Estate Investing Has Done a 180 17
By: Jeff Dervech - November 21, 2018 NRK Survey says more than 164 million consumers plan to shop over 5-day Thanksgiving weekend

Retailers must prepare for a floodgate of consumers to shop over this 5-day Thanksgiving weekend. National Retail Federation estimates 164 million consumers are already planning to go shopping. Consumers will be shopping all weekend and retailers must be ready to meet demand. Many consumers will head out right after finishing holiday turkey and continue to shop through Cyber Monday. Data points from the survey include: 21% (34 million) expected to shop on Thanksgiving Day, 71%...

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Late-Cycle Real Estate Investing Has Done a 180 18
By: Jeff Dervech - November 19, 2018 Southwest Florida’s Supermarkets get fresh to grow sales

Growth within the grocer sector is strong in many areas encompassing Southwest Florida! Individuals grocers to include Earth Fare, Whole Foods, Lucky’s Market, Sprouts Farmers Market, and Detwiler’s Farm Market are continuing to seek opportunities to growth their footprint within this sector of the state. In search of entering into these markets with limited options, they are lending themselves to being flexible in deal structures, wether that is leasing all or a portion of a...

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Late-Cycle Real Estate Investing Has Done a 180 19
By: Jeff Dervech - November 14, 2018 Thanksgiving sales, shopper traffic to rise, report say.

Majority of holiday weekend shoppers are expected to head to physical retailers and shopping center destinations with ambitions to spend more than they did in 2017. 83% of Thanksgiving weekend shoppers plan to buy in brick and mortar and spend approx. $555 worth of goods and services over the 4-day weekend. The retailers that have both a physical and online presence will be ones to drive the highest sales as consumers want options and will...

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Late-Cycle Real Estate Investing Has Done a 180 20
By: Jeff Dervech - November 12, 2018 Are Food Halls a Magic Elixir for Retail Owners?

Food Halls continue to be a hot ticket for retail properties! The concept has grown significantly since 2015 from approximately 70 projects being tracked in the US, to over 180 food halls by the end of 2018 according to Cushman & Wakefield. The buck doesn’t stop there, the industry is expecting that to grow to 300 individual food halls by the end of 2020. Food Halls comes in all different shapes and sizes ranging from...

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Late-Cycle Real Estate Investing Has Done a 180 21
By: Jeff Dervech - November 7, 2018 Dollar General heads for the city, with smaller stores

Dollar General is rolling out a strategy to reduce its store footprint from 9,000 sf to approx. 4,500 sf in an initiative to incorporate a new urban concept called DGX. Dollar General operates approx. 15,000 corporate owned and operate units across its portfolio, opening approx. 1,315 stores in Fiscal Year 2017. The new concept is to target millennials starting families and setting up in homes while trying to save money. The concept is expected to...

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Late-Cycle Real Estate Investing Has Done a 180 22
By: Jeff Dervech - November 5, 2018 A message from the chairman: The relationship between brick and mortar and online retail

Brick and Mortar drives digital engagement! Brand’s web traffic and online sales performance is directly correlated and heavily influenced by the presence of a physical store. The selling experience is directly linked to touchpoints through selling channels such as stores, direct to customer, mobile and online. This link ultimately in effect leads to the promotion of a brand, building better customer relationships, which leads to an increase in shopping trips resulting in higher sales. Digital...

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Late-Cycle Real Estate Investing Has Done a 180 23
By: Jeff Dervech - November 1, 2018 Mattress Firm Issues Ultimatum to Landlords as Battle Over Bankruptcy Closures Begins

Significantly lower the rent or face losing the location. This is the ultimatum Mattress Firm is issuing landlords as it begins the bankruptcy process filed on October 5th, 2018. Mattress Firm operates more than 3,000 stores and plans to reduce its store count by more than 500 units. The mattress retailer has experienced aggressive expansion in the recent years including several mergers which has resulted in the filing of bankruptcy mainly due to an accounting...

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Late-Cycle Real Estate Investing Has Done a 180 24
By: Jeff Dervech - October 30, 2018 Holiday shoppers opening up their wallets for experiences

Holiday shoppers are increasingly valuing experience over things! Interesting statistics from Deloitte’s 33rd annual Holiday Survey. According to the survey, experience spending will account for 40% or $611, out of the total $1,536 expected holiday shopper budget. 57% of total holiday spending is expected to be online this year. 66% of shoppers plan to research online and purchase in-store with 45% buying on-line and picking up in store. Omnichannel will be in full force this...

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Late-Cycle Real Estate Investing Has Done a 180 25
By: Jeff Dervech - October 26, 2018 Tractor Supply Store adding stores and reaping profits

Tractor Supply is continuing its plan of growth with an announcement to add 500 more stores to its existing footprint of 1,900 units. This retailer has been around for over 80 years and caters to a very niche customer. The average store generates approx. $257 per square foot when compared to Macy’s at $195 per square foot. No doubt this is a strong company with profits growing by approx. 9% per year on average since...

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Late-Cycle Real Estate Investing Has Done a 180 26
By: Jeff Dervech - October 24, 2018 Five Landlords that Replaced Sears with More Profitable Tenants

Retail landlords continue to take advantage of the store closures within their property portfolio. They are eager for a new beginning and are re-tenanting their spaces with new concepts that pay more rent and add to the retail synergy at their properties. Concepts such as cinemas, trampoline parks, fitness facilities, dining halls, sporting goods retailers and discount home furnishing stores among many other options are what these landlords are pursuing to replace this recaptured retail...

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Late-Cycle Real Estate Investing Has Done a 180 27
By: Jeff Dervech - October 3, 2018 Gyms Are Expanding and Many are Eyeing Mall Vacancies

Did you know that Planet Fitness was the #1 ranked tenant by total new square footage leased since the start of 2017 across all “mall” tenants? Fitness is an expanding sector and one of which is near internet resistant. With more than 36,000 clubs across the US with 60M+ members, consumers are more health conscious as ever in today’s day in age. Many shopping center landlords are seeking fitness uses as ideally anchor tenants to...

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Late-Cycle Real Estate Investing Has Done a 180 28
By: Jeff Dervech - October 1, 2018 US Consumer Confidence at 18 Year High

US consumer confidence is at an 18 year high with an index of 138.4 in September up from 134.7 in August. The all-time high is 144.7 which was reach in 2000. This bodes well for the economy as consumer spending fuels most developed service-based economies, including the US representing approx. 70% of GDP. Coupled by a strong economy and robust job growth, a high consumer confidence level of 138.4 in September proves a healthy economy...

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Late-Cycle Real Estate Investing Has Done a 180 29
By: Jeff Dervech - September 19, 2018 The future of University Mall in Tampa is that it won’t be a mall anymore

Do you know what the future of malls looks like? This is an ever-changing and evolving question but one that is posed quite regularly. As traditionally formatted malls are re-purposed or re-positioned, developers are having a fun time creating a new picture with a blank canvas. “New is the new, new”! This was a phase quoted by Spencer Levy, America’s head of research for CBRE. University Mall in Tampa near the University of South Florida...

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Late-Cycle Real Estate Investing Has Done a 180 30
By: Jeff Dervech - September 17, 2018 Fast Food’s Got a Netflix Problem as Americans Prefer to Dine In

More and more of Americans are continuing to eat at home, making the “dine-out” dollar more competitive amongst restaurants brand. 82% of Americans meals are prepared at home. Traffic for the industry was down 1.1% in July, the 29th straight month of declines, according to MillerPulse data. Restaurant Operators continue to report rising sales, however this increase has been caused by price hikes and not necessarily more customers. Pre-made meals, online grocery delivery, crushing student...

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Late-Cycle Real Estate Investing Has Done a 180 31
By: Jeff Dervech - September 14, 2018 Economists React to August 2018 Jobs Report on Twitter

Interesting Opinions via Twitter from different economist pertaining to the August jobs report. Overall, it is a very healthy report marking the 95th straight month of employment gains with an unemployment rate at 3.9%. Jobs create discretionary income which in turns fuels retail sales keeping the shopping center industry in a healthy state. [Source]

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Late-Cycle Real Estate Investing Has Done a 180 32
By: Jeff Dervech - September 12, 2018 These retailers getting “most bang for the buck”

In the off-price and specialty retail space, TJX and Ross lead the pack with the highest return on their investment compared to how much they pay in rent. This report analyzed companies return on investment as it relates to what they earn in sales per square foot, compared to what they pay in rent per square foot. TJX and Ross both bring in more than 20x greater then what they pay in rent. This is...

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Late-Cycle Real Estate Investing Has Done a 180 33
By: Jeff Dervech - September 10, 2018 Clicks-And-Bricks Comes of Age, Physical Stores Gain Ground

Retail Sales spiked over the summer primarily due to a strong economy with GDP at 4.1% annualized growth in Q2 and successful retailers are effectively implementing Omni-Channel retail into their arsenal. This is required for the future success for any retail brand and the strongest retailers are spanning across physical, mobile and social platforms to implement this strategy. This is what customers want and desire and allows retail brands the opportunity to parlay their physical...

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Late-Cycle Real Estate Investing Has Done a 180 34
By: Jeff Dervech - September 5, 2018 Planet Fitness Sees Opportunity in Retail Vacancies

Planet Fitness is anticipating future growth and looks to Sears and Kmart vacancies as ideal opportunities. The retailer plans to backfill a lot of these recent retail vacancies and looks to landlords as a use that can drive traffic and that “can’t be Amazoned”. Planet Fitness continues to grow its membership base now at 12.1 million, up from 10.4 million a year ago with a total of 1,608 stores mostly in North America. Between 2013...

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Late-Cycle Real Estate Investing Has Done a 180 35
By: Jeff Dervech - August 22, 2018 Flood of Toys ‘R’ Us Space Comes on the Market

Toys ‘R’ Us is beginning the process of selling off its real estate, most of which are freestanding stores or located in open air shopping centers averaging approx., 40,000 sf. According to bankruptcy filings players in the mix include Big Lots, Hobby Lobby, Ashley Furniture, Burlington Stores, TJMaxx, Aldi, Marshalls, HomeGoods, PGA Superstore, Target and more. This auction process requires bidders to close very quickly with no financing/lender contingences which leads to only players that...

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Late-Cycle Real Estate Investing Has Done a 180 36
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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