June 7, 2017
Our brokerage platform continues to expand, and last month industry veterans Donna Kolius, Pierce Owens and Kaylie Walker joined JLL in Houston. The team focuses on multi-market dispositions, national portfolio strategies, and sale leasebacks for corporations, private equity firms, real estate investment trusts, investors and retailers.
They recently returned from ICSC RECon. Here’s what they had to say about some key takeaways from the shopping center industry’s largest convention.
Malls are getting a lot of attention.
Mall owners now recognize the need to create new methods of increasing mall traffic. (Amenities such as food courts, theaters or skating rinks help keep shoppers at the mall once they arrive, but do not create new mall traffic.) The recent closure of department stores has motivated mall owners to change their perception of attractive mall anchors. Many mall operating agreements restrict uses to retail only. But department store closures have created an opportunity to fill the space with entertainment or restaurant concepts. The buzzword for this phenomenon is “retail-tainment” and includes anchors such as Crayola, Kidzania, Dave and Busters, Main Event and/or restaurants. We even know of one Texas mall that has created the concept of “date night,” which encourages couples to dine at a different restaurant at the nearby mall every Saturday night. In fact, anchors like Kidzania and Crayola promote children drop-off while the parents shop. These entertainment-based anchors create new mall traffic and are re-energizing the role of the mall in American retail shopping.
Donna Kolius, EVP – Experience: 33 years – Aggregate value of real estate portfolios sold: $4.2 billion
This was the catch phrase among REITs and institutional net lease investors when discussing their real estate portfolios. Tenants with service related uses that cannot be replicated by e-commerce or the internet are highly desirable. For example, oil change tenants and car washes are physical activities that cannot be replaced in cyberspace. Once considered mundane, these types of tenants are becoming more desirable to investors. Wall Street will favor property portfolios that demonstrate internet resistance.
Pierce Owens, SVP – Experience: 14 years – Aggregate value of real estate portfolios sold: $2 billion
Quick serve restaurants adopt fast causal qualities
Quick serve restaurants (QSRs) are beginning to imitate the wildly popular fast casual concept by adopting an increased customer focus into their own prototypes. Traditionally QSRs are thought of as a product of efficiency, synchronization and cost reduction. Lately, we’re seeing more and more quick service concepts make the investment into a more customer-centric experience. QSRs are buying into the idea of providing perks such as expanded menu options, alcohol sales, catering/delivery and technology integration. It really is a win-win as these areas of exploration provide QSRs the opportunity to accommodate changing customer tastes, all while promoting larger profit potential through extended business lines and cost mitigating measures.
Kaylie Walker, Associate – Experience: 2 years – Aggregate value of real estate portfolios sold: $32 million
Want to learn more? Get to know our National Disposition Services team.