JEFF-DERVECH

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...

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...

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...

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...

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...

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...

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...

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...

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...