Target's Stores Are Getting Smaller, And Its Revenue Is Getting Bigger 1
By: Jeff Dervech - September 19, 2019 Target’s Stores Are Getting Smaller, And Its Revenue Is Getting Bigger

Target is one of the darlings of retail brands in today’s day in age. In 2017, Target initiated a $7B reinvestment program to renovate existing stores and to open smaller format stores. The company has opened its 100th small-format store and has remodeled its 500th existing store unit since 2017. The goal is for Target to update approx. 1,000 of 1,800 existing store base by the end of 2020. Target’s strategy is paying off well...

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Walgreens Closing 200 Stores 2
By: Jeff Dervech - September 4, 2019 Walgreens Closing 200 Stores

Walgreens announced that they will close approx. 200 stores within the drugstore chain. This is a minimal amount, approx. 2%, given that this retailer has over 9,500 US locations. The move comes as expected when they cautioned in June that they would be looking to close unprofitable stores as they evaluate the approx. 500 leases that come due each year. Drugstore real estate is typically really good dirt, traditionally located at highly trafficked signalized intersections...

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universal
By: Jeff Dervech - August 8, 2019 Orlando – Retailers look beyond Tourism find a Soaring Population and Job Growth

Orlando is not only an interesting city but also a very strong market for retail. This region is one of the top markets in the country for both population and job growth. With Downtown Orlando emerging as an 18-hour city, more and more retailers are being drawn to the urban core. The residential population of Orlando is approx. 18,000 with approx. 80,000 daytime workers. This growth in residential population has postured downtown to be a...

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washington mall
By: Jeff Dervech - August 6, 2019 Updates from Washington D.C.

U.S. Department of Justice (DOJ) announced, this week that it would review and expand government scrutiny of certain dominant tech companies. By this review, opens a broad antitrust investigation into whether market-leading online platforms have engaged in behavior that has reduced competition, stifled innovation or otherwise harmed consumers. Amazon.com Inc., Facebook Inc., Apple Inc., and Google are reportedly the targets of this latest review. The main initiative by the DOJ and FTC (Federal Trade Commission)...

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ups delivery
By: Jeff Dervech - August 1, 2019 Retailers adding UPS pickup spots to thousands of Stores

UPS, the American multinational package delivery and supply chain management company, aims to provide services within 5 miles of roughly 90% of its US consumer base. To work in accomplishing this goal, UPS will add thousands of package pickup and drop off facilities to CVS and Michaels stores across the US. The collaboration with CVS alone will add more than 6,000 UPS access point locations. The goal of this move by UPS is to make...

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gamers
By: Jeff Dervech - July 29, 2019 Simon to open mall-based e-sports venues

Mall landlord Simon has entered an agreement to team up with Allied Esports, an e-sports operator, to open venues in shopping centers around the country. Allied Esports is a sister company of the World Poker Tour. This move will allow connecting video-game players, streamers and fans through integrated arenas and mobile e-sports trucks worldwide. As part of this move, Simon and Allied Esports will create dedicated e-sports venues and experience sites at select domestic Simon...

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Dollar General shifts Strategy to draw Wealthier Customers 3
By: Jeff Dervech - July 24, 2019 Dollar General shifts Strategy to draw Wealthier Customers

Dollar General is a retailer that continues to grow! This year D.G. is planned to open nearly 1,000 stores, remodel approx. 1,000 mature stores and relocate approx. 100 existing units. Dollar General has over 750+ stores within the State of Florida. They recently announced that they will expand offerings to include home furnishing, kitchenware, and party supplies to attract wealthier customers. Also, they will look to open produce sections with healthier snacks and private label...

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bar
By: Jeff Dervech - July 22, 2019 Goldman bullish on Big-Box Retailers, citing Deft Management

“New is the new, new”, as commonly quoted by Spencer Levy. Retail is very much alive and is here to stay. Retailers continue to make investments into their operations and strategize for the future in this ever-changing landscape. The main component in all these retailers’ growth plans is finding ways to adapt and evolve their omnichannel presence. Strong market leaders in the retail space, which have done just that, have been Target, Costco, The Home...

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runner
By: Jeff Dervech - July 19, 2019 You Can Now Sweat in Lululemon’s Gear Before Buying It

Lululemon, the athletic apparel retailer, is now offering its consumers the option of trying on clothing and borrowing items to work out in before purchasing. Talk about experimental retail! Lulu has opened a new store in Chicago that includes a traditional retail unit coupled with fitness component of which includes 2 exercise rooms, a meditation area and a café serving smoothies, salads, kombucha, and beer. Lulu is one of many retailers of which are offering...

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Talk Of Interest Rate Cuts Boosts The Stock Market, But Don't Expect A Similar CRE Windfall 4
By: Jeff Dervech - July 17, 2019 Talk Of Interest Rate Cuts Boosts The Stock Market, But Don’t Expect A Similar CRE Windfall

Last week, Jerome Powell, indicated the potential for a future cut to interest rates. If this were to happen, this would be the first time in over 10 years that interest rates were reduced. Many economists believe that a move such as this by the Federal Reserve would have no significant impact on the commercial real estate industry’s growth trajectory. The United States continues to remain in a strong position but does have some concerns,...

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Technology to Count Cars in Retail Parking Lots from Space 5
By: Jeff Dervech - July 12, 2019 Technology to Count Cars in Retail Parking Lots from Space

Technology continues to increase efficiencies and create competitive advantages for investors in the retail industry. Sophisticated investors are using satellites to count cars in parking lots to gain a real-time understanding of traffic attributed to same-store sales growth, an important metric for physical retailers. This technology provides investors with data support of store foot traffic before retailers disclose their quarterly financial results. It can be a basis of indication coupled with other metrics indicating if...

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Renovation Financing for Grocery Anchored, Strip Centers Plentiful 6
By: Jeff Dervech - July 10, 2019 Renovation Financing for Grocery Anchored, Strip Centers Plentiful

Private owners and shopping center investment groups who continue to seek out value are adding retail opportunities, whether that be a grocery-anchored center that needs cosmetic upgrades in order to boost rents and to re-tenant the small shop space or unanchored strip centers with a vacancy that needs to be completely repositioned. Opportunities such as the examples outlined above are being highly sought out after and there is no shortage of banks willing to funds...

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Investors Work to Revive Storied Retail Brands 7
By: Jeff Dervech - July 2, 2019 Investors Work to Revive Storied Retail Brands

Retail brands such as Circuit City, Toy R Us, Bon Ton, and Wet Seal are a few retailers that have gone through the bankruptcy process and are now re-emerging in an effort to find themselves and their new identity. Many of these concepts will look to online platforms to re-engage with customers, but in the world of brick and mortar, they must create some sort of a physical strategy for an experience that cannot be...

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Half of Americans Use Click and Collect 8
By: Jeff Dervech - June 28, 2019 Half of Americans Use Click and Collect

Click and collect is an investment in both physical and digital, with retailers implementing this technology and consumers increasingly using it. According to a recent ICSC survey, 50% of adults use click and collect with as many as 61% using it as frequently as once per month. The retailers that offer this option are seeing an increase in sales and overall happier customers. Technology that makes retail purchasing frictionless is now mandatory as consumers expect...

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Do Mall Owners Anticipate More Consolidation? 9
By: Jeff Dervech - June 25, 2019 Do Mall Owners Anticipate More Consolidation?

The mall landscape has undergone two significant transactions, which finalized in 2018. Brookfield Properties acquired GGP for $15 billion, and Unibail-Rodamco purchased Westfield for $22 billion.The 80% of U.S. malls that are owned by publicly traded REITs with the top 4 malls owners in the US, measured by the total value of their owned or controlled portfolios, are Simon (110 malls, $49 billion), Brookfield (152 malls, $42 billion), Macerich (46 malls, $15.7 billion) and URW...

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Retailers Step Up as More Shoppers Opt to Rent Rather Than Buy 10
By: Jeff Dervech - June 19, 2019 Retailers Step Up as More Shoppers Opt to Rent Rather Than Buy

Renting rather than buying is the last trend in the world of retail, and I do not see this changing. The customer in today’s world is interested in having access to the newest selections, and retailers are stepping up to provide customers with this emerging demand. For instance, Rent the Runway is a women’s online apparel service that provides customers with an option to pay for a monthly subscription to rent, use, and return apparel...

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Smaller Stores Work Better, Abercrombie & Fitch Says 11
By: Jeff Dervech - June 17, 2019 Smaller Stores Work Better, Abercrombie & Fitch Says

Abercrombie and Fitch, a long-standing brand very familiar with millennials mainly through their middle school and high school days, is undergoing change with efforts to evolve to the standards of retail today. How many of you remember going to an A&F store with dark lighting in a large store footprint? The brand has announced plans to open more stores, shutter the non-performing locations, and correctly size their store footprint to maximize efficiency and sales per...

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shopping cart
By: Jeff Dervech - June 12, 2019 WSJ Editor Challenges ‘Retail Apocalypse’ Notion

Brick and Mortar is strong, and retail has transformed and will continue to transform for the foreseeable future. The retailers that incorporate omnichannel into their business model will survive, and the ones that don’t will become extinct. 90% of total retail sales are still completed in stores. Over the last 10 years, overall online retail sales have grown gradually from about 3% in 2007 to about 10% in 2018. People still prefer to buy online,...

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Health & Wellness at RECon: Clinics, Shopping Centers Make for Healthful Relationships 12
By: Jeff Dervech - June 10, 2019 Health & Wellness at RECon: Clinics, Shopping Centers Make for Healthful Relationships

Shopping centers and health care users are a natural fit; both the health care and shopping center industries continues to evolve, and common ground is being found between the two industries more than ever before. Past obstacles such as parking concerns and exclusivity agreements for health care tenants are being approached by landlords with a different mindset than in the past. Landlords value health care tenants for several reasons, including the diversity they can bring...

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Spas Go Mainstream at Retail Centers 13
By: Jeff Dervech - June 4, 2019 Spas Go Mainstream at Retail Centers

With spas continuing to grow at a roaring pace, consumers value health and wellness now more than ever before. This growth has been mainly fueled by a strong economy with individuals having more disposable income. In addition, consumers are placing more value on health and wellness and taking more responsibility for their body and mind. As many would say, people want to live their best life, looking for longevity, striving to be as active as...

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Traditional Retailers See Progress in E-Commerce Adaptation Strategies 14
By: Jeff Dervech - May 30, 2019 Traditional Retailers See Progress in E-Commerce Adaptation Strategies

Retail is constantly evolving and changing. In order to compete in today’s environment, retailers must be incorporating omnichannel into their strategy. The dinosaurs that are reluctant to invest the time and resources to morph their retail practice into the standards of today for future growth and sustainability will be left in the dust. Many retailers such as Kroger and Macy’s are aggressively adopting omnichannel platforms in order to meet today’s consumer expectations. At the ICSC...

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Big Gains for Small Shops 15
By: Jeff Dervech - May 27, 2019 Big Gains for Small Shops

Tenants defined as “small shop” tenants are performing well, and landlords are participating in their success. Small shop tenants are defined as retail tenants leasing less than 10,000 square feet. The growth of small shop tenants has universally increased across the portfolio of many of the major shopping center owners. Vestar, a Phoenix-based owner with over 70 properties, acknowledges that most of the deals that they are doing have been with small format retailers and...

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Investment Demand for Triple-Net Leases Remains High 16
By: Jeff Dervech - May 23, 2019 Investment Demand for Triple-Net Leases Remains High

The demand for triple net lease retail investments remains high throughout the country. This investment product is in most demand for tenants that are restaurant-based uses. An investors preference is to acquire assets which include restaurant based, service styled uses because they have less to worry about given the Amazon effect. Assets encompassed by restaurants are a larger driver of traffic and tend to create a synergy that bodes well for surrounding retail. This is...

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Restaurants and Grocery Stores Re-Evaluate Space Needs Based on Rising Demand for Deliveries 17
By: Jeff Dervech - May 20, 2019 Restaurants and Grocery Stores Re-Evaluate Space Needs Based on Rising Demand for Deliveries

Restaurants are continuing to right-fit their footprint to accommodate new consumer demands. To meet consumer demands for delivery, restaurants are experimenting with testing kitchens only or shared kitchen outlets with no dine-in options. This comes at a time where delivery costs are high and restaurants are solving this problem by reducing square footage and paying less in effective rent. There are companies setting up 3rd party kitchen sites, like a food court, where you might...

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“Keep on Keepin’ On”: Economists React to April Jobs Report on Twitter 18
By: Jeff Dervech - May 16, 2019 “Keep on Keepin’ On”: Economists React to April Jobs Report on Twitter

The economy in the United States has delivered its 103rd straight month of employment gains by adding approx. 263,000 jobs in April. This marks yet again another strong and record-breaking metric that proves the current strength and growth of the US economy. Unemployment dropped to 3.6% and is at its lowest level since December 1969. This economic momentum continues to remain evident and a strong economy will continue to lead to consumer confidence and spending...

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Kohl’s to accept Amazon returns at all stores 19
By: Jeff Dervech - May 13, 2019 Kohl’s to accept Amazon returns at all stores

Kohl’s is a retailer getting creative and thinking outside of the box! Kohl’s has announced a partnership with Amazon to accept Amazon product returns at their brick and mortar locations. With Kohl’s extensive brick and mortar presence, approx. 1,100 stores across 49 states, this move will allow both companies to provide excellent customer service, convenience for their customers and allow for a strong omnichannel approach providing a seamless shopping experience. Right fitting their stores to...

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Bank Branch Closures Are Increasing, But Alternative Tenants May Take Over Vacated Spaces 20
By: Jeff Dervech - May 6, 2019 Bank Branch Closures Are Increasing, But Alternative Tenants May Take Over Vacated Spaces

The banking industry continues to change, with the majority of financial institutions focusing resources on technology initiatives rather than aggressive brick and mortar growth strategies as in the past. Over the last 24 months, more than 5,700 bank branches closed throughout the country with a forecasted 1,700 units to close in 2019. Don’t take these stats the wrong way! Banks remain to be in a healthy position, this move is simply a result of a...

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The Food and Beverage Industry is Internet Proof: Report 21
By: Jeff Dervech - April 29, 2019 The Food and Beverage Industry is Internet Proof: Report

The food and restaurant industry is expected to grow by approx. 13% over the next five years. What does this mean? This means that this sector is very strong and will continue to be very competitive which will drive innovation. Majority of the food service spending, approx. 75%, results at dine-in restaurants but online ordering is on the rise globally. The traditional burger or sandwich is no longer acceptable. Consumers value experience much more in...

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Chipotle, Panera Turn to Drive- Thru’s as Fast Food Stigma Fades 23
By: Jeff Dervech - April 18, 2019 Chipotle, Panera Turn to Drive- Thru’s as Fast Food Stigma Fades

Chipotle adding Drive-Thrus! In an effort to compete for the stomach dollar of the consumer, Chipotle has announced plans to add “several dozen” drive up windows in 2019.Chipotle adding Drive-Thrus! In an effort to compete for the stomach dollar of the consumer, Chipotle has announced plans to add “several dozen” drive up windows in 2019. It is all about the convenience, and brands are looking to add this luxury of an amenity into their stores...

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Grocery Stores Head to the Mall 24
By: Jeff Dervech - April 16, 2019 Grocery Stores Head to the Mall

Grocery store chains are not only in expansion mode, many are entertaining or are in the works of adding mall units into their growth plans. As of recently, many grocery store chains, such as Whole Foods, Wegmans, Lidl, and The Fresh Market have taken space vacated by department stores in malls. This is advantageous to mall landlords as it adds a tenant that can typically pay more in rent than the previous department store anchors...

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Economists React to the March Jobs Report on Twitter: “Sigh of Relief” 25
By: Jeff Dervech - April 10, 2019 Economists React to the March Jobs Report on Twitter: “Sigh of Relief”

The economy continues to remain sturdy with another strong job report. In the month of March, non farm payroll employment increased by 196,000. This report marks the United States’ 102nd continuous straight month of employment gains. The unemployment rate remained at 3.8% nationally with the unemployment rate for the Tampa MSA at 3.4% preliminary (BLS). As the first quarter of 2019 came to an end, the economy proved to perform well with continued job growth...

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ICSC Holds EPA Region 9 Meeting 26
By: Jeff Dervech - April 8, 2019 ICSC Holds EPA Region 9 Meeting

ICSC meets with EPA officials to advocate for the expedited process of delisting sites from the National Priorities List (NPL) with a focus on risk-based clean ups and urged for the consideration of partial delisting as a best practice. This is important because this proactive initiative urges the EPA to focus on sites with the highest impact and best future public benefit to accelerate its decision-making process and contain costs. Shopping center developers use brownfield...

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Discount Grocers Compete for Value Shoppers 27
By: Jeff Dervech - April 4, 2019 Discount Grocers Compete for Value Shoppers

Did you know that over 400 grocery stores opened last year in 2018, bringing the total US store count to over 65,700 total grocery units? Grocery is the backbone to the retail world of the consumer and continues to have more and more players entering the space every year. This sector is ever changing and will continue to evolve entering a new era of platforms and offerings by the individual grocery brands. Given the so-called...

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In Their Own Words: What the Next Economic Downturn Will Mean for Commercial Real Estate 28
By: Jeff Dervech - March 26, 2019 In Their Own Words: What the Next Economic Downturn Will Mean for Commercial Real Estate

Commercial real estate continues to be on a tear, with many calling this ballgame extra innings. Most believe that the industry is healthy enough with strong core fundamentals to withstand a downturn. Diversification is key, with most c-level executives and market leaders advising to build a portfolio to span geographically with multiple property types and specialty sectors to insulate against headwinds. A focus on Class A product was a common theme, as many leaders believe...

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Spas Go Mainstream 29
By: Jeff Dervech - March 21, 2019 Spas Go Mainstream

Did you know that there are approx. 20,400 spas operating in the US with aggregate annual revenues of about $18.3 billion? With the economy in healthy shape, consumers are spending more of their disposable income on self-care. Consumers continue to invest more into their own health and wellness entering into a lifestyle choice that a majority of the population is embracing. Spa concepts such as Hand & Stone, Massage Envy and Elements Massage are some...

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