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The
Dealmakers Issue Number 24 for the week of July 14, 1995 My Way
by Ted Kraus Where
have all the retailers gone... too far away! In the
beginning there were vendors at local bazaars, then ma & pa shops, then department
stores, then downtown stores, then strip centers, then malls, then super regional malls
and along with that came the "malling of America," then outlet centers being
developed in former factories, then power centers, then outlet centers being developed
from the ground up, then super regional "Value Centers," then the de-malling of
malls and now the latest trend is beginning to occur but no one has named it yet and I'm
not smart enough to coin one and the "elimination of small space and non-mega
retailing" just doesn't sound right, but is a subject worth discussing since in the
past, the smaller retailer played a key role in shaping the retail real estate landscape. Not only did the specialty store play a key role,
but has been the major contributor to the developer's profit and ccenter's make up and
personality. When
shopping centers first started (our definition of a shopping center is two or more shops
sharing the same parking lot; very broad I admit but you have to start somewhere), it was
done to make more efficient use of land and to develop cross shopping between retailers
(and make the developer a long term project). As
the concept of shopping centers caught on, developers began to realize they could make
mega bucks off small shop leasing if they had enough "anchors" to bring in
traffic and therefore make their location desirable.
This philosophy continued during the '70's and '80's and it was this concept that a
fortune could be made by leasing to small shops that caused many a center to overbuild and
later "fail" (fail means go back to the bank) during the late '80's and early
90's. The small shops that were overbuilt to
justify a ridiculous pro-forma couldn't be leased. When
the "Great Recession" of the '80's hit, the main problem was not leasing big box
space but filling the specialty stores. While
the recession affected everyone, the big box users continued to expand but the specialty
merchant disappeared, therefore power centers (the first power centers were not that
successful, as developers learned the hard way, to minimize specialty stores and maximize
"big box" users) made sense if they catered to the anchors. Oh, side bar comment, the big box users are now
paying almost as much or sometimes more per sq.ft. as the small shop were/are, which has
helped make up for the lost income from the specialty stores (who says developers aren't
smart). Mini
malls, which should'nt have been built to begin with, are being "de-malled"
thereby eliminating common area and the charges it incurs and by eliminating the common
area, the developer adds to trhe amount of leaseable space available. This newly found space becomes a rental income
source instead of a "mark up" on CAM source.
The de-malling concept makes sense but not all malls and mini malls lend to
de-malling because of their layout. Going on
with this narrative, the improved economy in the early/mid '90s brought specialty stores
back to the market but still not enough to fill all the available vacancies or justify a
substantial amount of small shop development. Many
conventional malls, losing market share and tenants to the newer regional mall or power
center built a mile away have attempted to overcome some of their problems by combining
six small shops into a Service Merchandise, TJ Maxx or whatever big box user they could
find and thereby keeping thre center leased (of course, these mini-acnhors refuse to pay
their pro-rata share of interior CAM, thereby causing a loss to the owner or raising the
costs of CAM for the specialty stores, but that's another story). To some extent, this approach has worked and
worked well, but there are still more "problem" centers than there are big box
retailers willing to fill'em. I've
done my share of this type of re-leasing, combing four stores into a Discovery Zone, three
into a Hancock Fabric, eight for a Waccamma Pottery, five into a Gold's Gym, etc. and it
turns a center around and definitely increases the real cash flow (lets forget about
proformas). The problem is this trend is
still continuing but we're having a slow down of big box users, not only because of our
current mini-recession, (you can say you heard the "R" word here first,
irresponsible journalism at it's best) but because most of these "big box users"
are incompetent or, being kinder, haven't figured out how to make their concept work. Price/Costco combined so as to stay alive, if
Sam's wasn't part of Wal*Mart, it would be in deep something, Bradlee's is talking
bankruptcy, Kmart is trying to figure out who or what they are and the list goes on and
on. In the
next 18 months, I predict we'll see more big box users closing even more stores than they
have in the past 18, more big box stores will either go 11 or be in death's bed and that's
where the problem lies. We are eliminating
small shops by combining 'em into mini big boxes but the big and mini-big box users have
major problems and therefore will be bringing to market "big space" that will
have to be "cut" into small stores so it's re-leasable. We have large space being "cut up" and
small spaces being combined, but enough retailers to fill either. While I personally lack any confidence in our
government (except for being incompetent and taking bribes, oh sorry I meant special
interest funding) I do believe in the "greatness" of the American entrepreneur,
therefore in the next two years, we'll see dozens of new concepts coming in to retailing
and the conversion of many centers in to an alternative use. An interesting dilemma and no one knows the
answer. On a
different note, some developers talk through three sides of their month and while this
fact is not relevant to anything else, I need an avenue to vent my anger, so here's my
latest bitch. There's a developer that owes
me a decent amount of money which was due 70 days ago. On the date it was due we faxed an
invoice for the amount due and a copy of the executed commission agreement showing how we
came to the commission. I waited a week and
then followed up with a friendly "How we doing in paying me" call, and was told
he needed a few more weeks, so I said fine. Two weeks later I followed up and was told the
same. Again, I said fine and then followed up two weeks later, again being told to keep
the faith. Being the good guy I am, I said OK and then called two weeks later. This time I
was told he needed a month, which I agreed to. Thirty days later I called and this time it
took eight or nine attempts to get through (Finally, I called early in the morning when
his staff wouldn't be in but he would be) and he was "upset" that I was hounding
him when it was only 70 days late. I asked that if one of his tenants were 70 days late in
paying rent, but he knew that they were still making money, would he be that
understanding? He tried to explain that this
was different and he "needed" the money, but I was a different story. Yeah, I'm just a dumb broker. New
England Sites Sought Dairy
Mart operates 900 locations in OH, PA and MI. The
convenience stores, which also sell gasoline, occupy spaces of 2,744 sq.ft in freestanding
facilities on one to one and one-half acres of land situated at corners of major
intersections. Plans call for 25 openings in
the coming 18 months. Expansion will take
place in MA, CT, RI, NY, PA, OH, KY and MI. For more information, contact Jack Thompson, Dairy
Mart, 210 Broadway E., Cuyahoga Falls, OH 44222; 216-922-7283, Fax 922-7110. Adap,
Inc. trades as Auto Palace at 98 locations in MA, NH, CT, RI, ME and NY. The automotive stores occupy spaces of 8,000
sq.ft. to 10,000 sq.ft. in freestanding facilities, power and strip centers. Plans call for 15 openings in the coming 18
months. Expansion will take place in the
existing markets. Preferred demographics
include a population of 50,000 within three miles earning $40,000 as the average income. For more information, contact Mike Rodelle, Adap,
Inc., 625 Bodwell Street, Avon, MA 02322; 508-587-8400, Fax 580-3202. V.I.P.,
Inc. trades as VIP Discount Auto Centers at 32 locations in ME and NH. The automotive parts stores occupy spaces of
10,500 sq.ft. to 21,600 sq.ft. in freestanding facilities.
Preferred sites should be located near McDonald's, Burger King, Kmart and shopping
centers. Plans call for up to 15 openings in
the coming 18 months. Expansion will take
place in MA. Preferred demographics include a
population of 60,000 within seven miles earning $30,000 as the average income. Leases running 13 years with six five-year options
are typical. For more information, contact Robert Spencer,
V.I.P., Inc., 12 Lexington Street, Lewiston, ME 04240; 207-784-5423, Fax 784-9178. WSR
Corporation trades as Strauss Discount Auto at 120 locations in CT, MA, NY, NJ, PA and DE. The automotive stores occupy spaces of 8,500
sq.ft. to 12,500 sq.ft. in freestanding facilities. Preferred
anchors include Kmart, T.J. Maxx and supermarkets. Plans
call for 25 openings in the coming 18 months. Expansion
will take place in the existing markets. Preferred
demographics include a population of 100,000 within three miles earning $30,000 as the
average income. Leases running 10 years are
typical. For more information, contact Bob Bottelli, WSR
Corporation, 9-A Brick Plant Road, South River, NJ 08882; 908-390-9000, Fax 390-9079. Fay's,
Inc. trades as Wheel's Discount Auto Supply Stores at 75 locations in NY and PA. The automotive parts and accessories stores occupy
spaces of 8,000 sq.ft. in freestanding facilities and strip centers. Preferred anchors include home improvement
tenants. Plans call for up to 20 openings in
the coming 18 months. Expansion will take
place in VT, Western MA, Western NH, NY and PA. Preferred
demographics include a population of 35,000 within three to five miles earning $30,000 as
the average income. Leases running 10 years
are typical. For more information, contact Randy S., Wilcox,
Director of Real Estate, Fay's, Inc., 4577 Buckley Road, Liverpool, NY 13088-2594;
315-652-7000, Ext. 3757, Fax 652-3315. Elizabeth
Grady Face First operates 23 locations in New England.
The stores, selling cosmetics and skin care products, occupy spaces of 1,000 sq.ft.
to 1,500 sq.ft. in strip centers. Preferred
anchors include Lord & Taylor and T.J. Maxx. Plans
call for 10 openings in the coming 18 months. Expansion
will take place in New England and FL. Leases
running five years are typical. The company
is franchising. For more information, contact John Walsh,
Elizabeth Grady Face First, 200 Boston Avenue, Medford, MA 02155; 800-322-4257, Fax
617-391-4772. Mack
Enterprises trades as Ninety Nine Restaurants at 35 locations in MA and NH. The restaurants occupy spaces of 6,000 sq.ft. in
freestanding facilities and power centers. Preferred
anchors include Wal*Mart. Plans call for
eight openings in the coming 18 months. Expansion
will take place in CT and RI. Preferred
demographics include a population of 60,000 within three miles earning $60,000 as the
average income. For more information, contact Dana Doe, Mack
Enterprises, 160 Olympia Avenue, Woburn, MA 01801; 617-933-8999, Fax 933-0821. T.J.
Cinnamon's, Inc. operates 65 locations throughout North America. The stores, selling gourmet cinnamon rolls and
related baked goods, occupy spaces of 900 sq.ft. to 1,200 sq.ft. in downtown store fronts
and regional malls. Preferred anchors include
Lord & Taylor. Plans call for 20
openings in the coming 18 months. Expansion
will take place in the Northeast region. Leases
running seven years are typical. The company
is franchising. For more information, contact the Franchise Sales
Dept., T.J. Cinnamon's, Inc., 135 Seaview Drive, Secaucus, NJ 07094; 201-422-0910, Fax
422-0858. Mr.
Subb, Inc. operates 25 locations in NY. The
restaurants, selling sandwiches, soups and salads, occupy spaces of 1,100 sq.ft. to 1,500
sq.ft. in freestanding facilities and strip centers.
Preferred anchors include Wal*Mart and Blockbuster Video. Plans call for 20 openings in the coming 18
months. Expansion will take place in CT, MA,
VT, NY, NJ, CA and FL. Preferred demographics
include a population between 5,000 to 50,000 within three miles earning $15,000 as the
average income. Leases running five years
with a five-year option are typical. The
company is franchising. For more information, contact Gary Sheehan, Mr.
Subb, Inc., 621 Columbia Street, Cohoes, NY 12047; 518-783-0276, Fax 783-0294. Pizzeria
Management Systems, Inc. trades as Ronzio Pizza at 17 locations in RI. The restaurants, offering pizza, wings and
sandwiches, occupy spaces of 1,000 sq.ft. in strip centers.
Plans call for six openings in the coming 18 months.
Expansion will take place in CT, MA and RI. Preferred
demographics include a population of 10,000 within two miles. Leases running five years with a five-year option
are typical. The company is franchising. For more information, contact Julian Angelone,
Pizzeria Management Systems, Inc., 194 Waterman Street, Providence, RI 02906;
401-751-4470, Fax 331-5212. Filene's
Basement, Inc. operates 52 locations in MA, NH, RI, ME, CT, NY, NJ, PA, IL and Washington,
D.C. The apparel stores, selling family
ready-to-wear at off-prices, occupy spaces of 30,000 sq.ft. in downtown store fronts,
regional malls, power and strip centers. Plans
call for up to six openings in 1996. Expansion
will take place in the existing markets. Leases
running 10 years are typical. For more information, contact Donna Capichano,
Filene's Basement, Inc., 40 Walnut Street, Wellesley, MA 02181; 617-348-7156, Fax
348-7128. Eblens,
Inc. operates 12 locations in CT, MA and RI. The
apparel and footwear stores occupy spaces of 8,000 sq.ft. to 15,000 sq.ft. in freestanding
facilities and strip centers. Preferred
anchors include supermarkets. Plans call for
four openings in the coming 18 months. Expansion
will take place in CT, MA, NH, RI, VT or NY. Preferred
demographics include a population of 100,000 within five miles earning $40,000 as the
average income. Leases running five years are
typical. For more information, contact Matt Halprin,
Eblens, Inc., c/o New England Retail Leasing Co., 1160 Silas Dean Highway, Weathersfield,
CT 06109; 203-529-9000, Fax 563-9667. Record
Giant operates 11 locations in MA, NH and NY. The
stores, selling records, tapes and compact discs, occupy spaces of 1,600 sq.ft. in strip
centers. Preferred anchors include Kmart and
Wal*Mart. Plans call for one opening in the
coming 18 months. Expansion will take place
in the existing markets or VT. Preferred
demographics include a population of 30,000 within three miles earning $20,000 as the
average income. For more information, contact Bruce Hyman, Record
Giant, 1 Homestead Place, Amsterdam, NY 12010; 518-843-3801, Fax 843-5918. Ram
Entertainment does business as Video Choice at eight locations in NH and FL. The video stores occupy spaces of 3,500 sq.ft. in
freestanding facilities and strip centers. Preferred
anchors include pizza shops and supermarkets. Plans
call for two openings in the coming 18 months. Expansion
will take place in Central NH. Preferred
demographics include a population of 16,000 within four miles earning $20,000 as the
average income. Leases running three years
are typical. For more information, contact Rock Moon, Ram
Entertainment, Box 1717 Route 3, Tilton, NH 03235; 603-524-5684, Fax 527-0620. DiGeronimo
Brothers Victory Markets trades as Victory Supermarkets at 14 locations in MA. The stores occupy spaces of 45,000 sq.ft. to
60,000 sq.ft. in freestanding facilities, power and strip centers. Plans call for three openings in the coming 18
months. Expansion will take place in the
existing market. Leases running 15 to 20
years are typical. For more information, contact Everett B. Lonzo,
Jr., DiGeronimo Brothers Victory Markets, PO Box 992, Fitchburg, MA 01420-0992;
508-345-4545, Fax 342-4790. CWT
Specialty Store, Inc. trades as Cherry & Webb at 54 locations in CT, MA, NH, RI and
VT. The stores, selling intimate apparel,
sleepwear, fragrances, cosmetics, jewelry and shoes, occupy spaces of 12,000 sq.ft. in
community malls, strip and specialty centers. Plans
call for two openings within the coming 18 months. Expansion
will take place in NH and VT. Leases running
10 years are typical. For more information, contact Walter Branson, CWT
Specialty Store, Inc., 505 Collins Street, South Attleboro, MA 02803; 508-399-6000, Fax
761-7167. Iiri
International, Inc. does business as Spectrum-India at two locations in RI. The women's apparel stores occupy spaces of 600
sq.ft. to 1,000 sq.ft. in downtown store fronts and strip centers. Preferred anchors include Ann Taylor and Lord
& Taylor. Growth opportunities are sought
in CT, MA and RI. Preferred demographics
include a population of 200,000 within five miles earning $35,000 as the average income. Leases running one to two years with options are
typical. For more information, contact Jagdish Sachdev,
Iiri International, Inc., 725 Branch Avenue, Providence, RI 02904; 401-272-8600, Fax
273-5482. Weathervane
Retail Corp., trades as The Weathervane at 100 locations in CT, MA, RI, NH, ME, VT, NY,
NJ, PA, NC and GA. The women's apparel stores
occupy spaces of 4,500 sq.ft. in regional malls. Growth
opportunities are sought in the existing markets and the Midwest region. Leases running five to 10 years are typical. For more information, contact Thomas Davidson,
Sr., Weathervane Retail Corp., 300 John Downey Drive, New Britain, CT 06051; 203-224-6029,
Fax 224-8515. Next
PLC trades as Next USA, Inc. at four locations in MA and VA. The apparel stores, selling clothing for men,
women and children with a European flare, occupy spaces of 5,500 sq.ft. in downtown store
fronts and regional malls. Growth
opportunities are sought in the existing markets. For more information, contact Wasseem Kabbara,
Next PLC, 208 Newbury Street, Boston, MA 02116; 617-247-1600, Fax 351-2484. Hoyts
Cinema Corp. trades as Hoyts Cinema at 80 locations in CT, MA, ME, NH, RI, VT, NY, MD and
OH. The movie theaters occupy spaces of
30,000 sq.ft. to 50,000 sq.ft. in freestanding facilities, regional malls, power and strip
centers. Plans call for 12 openings in the
coming 18 months. Expansion will take place
in the existing markets. Leases running 15
years are typical. For more information, contact Harold Blank, Hoyts
Cinema Corp., 1 Exeter Plaza, Boston, MA 02116; 617-267-2700, Fax 267-2143. Milford
Automotive Warehouse operates 23 locations in MA and RI.
The stores occupy spaces of 5,000 sq.ft. in freestanding facilities. Plans call for one opening in the coming 18
months. Expansion will take place in RI. Leases running five years with two five-year
options are typical. For more information, contact Richard Mann,
Milford Automotive Warehouse, PO Box 679, Bellingham, MA 02019-0679; 508-966-1332, Fax
966-1400. South
Pointe Enterprises, Inc. trades as Airborne For Men at four locations in MA and RI. The men's apparel stores, which also sell
accessories and adult-themed entertainment, occupy spaces of 3,200 sq.ft. to 3,600 sq.ft.
in downtown store fronts, freestanding facilities and strip centers. Plans call for up to 15 openings in the coming 18
months. Expansion will take place in the
Northeast region and FL. Preferred
demographics include a population of 75,000 within five miles earning $30,000 as the
average income. Leases running 10 years are
typical. The company is franchising. For more information, contact Mr. Bruno, South
Pointe Enterprises, Inc., 1060 Park Avenue, Cranston, RI 02910; 401-942-7876, Fax
943-6363. New
Almacs, Inc. trades as Almacs at 27 locations in MA and RI.
The supermarkets occupy spaces of 35,000 sq.ft. in freestanding facilities, power,
strip and specialty centers. Plans call for
one opening in 1996. Expansion will take
place in RI. For more information, contact Steven Jenkins, New
Almacs, Inc., 640 South Street, Utica, NY 13501; 315-734-4241, Fax 734-4381. The
Big Party operates seven locations in MA. The
party supply stores occupy spaces of 10,000 sq.ft. to 12,000 sq.ft. in freestanding
facilities and strip centers. Plans call for
nine openings in the coming 18 months. Expansion
will take place in CT and Western MA. Leases
running 10 years are typical. For more information, contact Matt Halprin, The
Big Party, c/o New England Retail Leasing Co., 1160 Silas Dean Highway, Weathersfield, CT
06109; 203-529-9000, Fax 563-9667. Honey
Farms, Inc. trades as Honey Farms Mini-Mart at 45 locations in MA. The convenience stores occupy spaces of 3,000
sq.ft. to 4,000 sq.ft. in freestanding facilities located at intersections. Plans call for six openings within the coming 18
months. Expansion will take place in the
existing market. Preferred demographics
include a population of 4,000 within one mile earning $30,000 as the average income. Leases running five years with three five-year
options are typical. For more information, contact Wilfred Iandali,
Honey Farms, Inc., 505 Pleasant Street, Worcester, MA 01609; 508-753-7678, Fax 753-5388. Who's
Opening and Where... Gart
Sports (303-861-1122) plans to open a 45,000 sq.ft. store in Boise, ID during September. Discovery
Zone (310-216-2654) recently opened a store at Century Center in West Springfield, MA. Grand
Union Co. (201-890-6000) plans to build a store in Tannersville, NY. Over the next two
years the company plans to open six new stores and 11 replacement stores. The company also plans to enlarge six stores and
renovate 12 others. Target
(612-370-6163) plans to open stores in Akron, Medina, Stow, Strongsville and Bedford, OH
this month. An additional six to 10 stores
are planned to be opened in OH within the next three years. CKE
Restaurants, Inc. (714-774-5796) recently entered into a joint venture agreement with MBF
Holdings Berhad to develop Carl's Jr. restaurants in 16 Asian countries over the next five
years. Pancho's
Mexican Buffet, Inc. (817-831-0081) recently opened a restaurant in Baytown, TX. The company currently operates 73 restaurants
offering all-you-can-eat Mexican food in a buffet-style format in TX, AZ, LA, NM and OK. Summit
Family Restaurants, Inc. (801-974-4300) recently opened a HomeTown Buffet restaurant in
Chandler, AZ. Another HomeTown Buffet
restaurant is currently under construction in Yuma, AZ. Nautica
(212-541-5757) recently opened a Nautica Factory Store at Horizon Outlet Center-Edinburgh,
in Edinburgh, IN. Staples
(508-370-8727) is planning to open two stores in Columbia, SC. One store is expected to open next month, and the
second store is expected to open during September. Crate
& Barrel (708-272-2888) recently opened a store in Manhattan, NY. B.
Dalton Booksellers (212-633-3300) recently opened an 8,000 sq.ft. store at Valley Plaza
Shopping Center in Bakersfield, CA. Sun
Television and Appliances, Inc. (614-492-5608) plans to open Sun Super Savings Center
stores in Cincinnati, Springfield, St. Clairsville, Lancaster and Beavercreek, OH as well
as Beckley, WV. Developing
Concepts, Inc. (216-888-9514) plans to open Imagimaze Family Fun Centers in Baltimore, MD
and Hickory, NC. H-E-B
(210-246-8000) plans to build two supermarkets in Monterrey, Mexico. The company currently operates 227 stores in TX. Burlington
Coat Factory (609-387-7800) plans to open a Totally 4 Kids store in Milpitas, CA. Hills
Department Store (412-378-0511) plans to open a store in Wilmington, NC. Tandy
Corp. (817-390-3011) plans to open an Incredible Universe store in Elizabeth, NJ. Home
Express (510-732-9600) plans to open a 43,000 sq.ft. store in Colorado Springs, CO during
September. Meijer
(616-453-6711) plans to open a 230,000 sq.ft. store in Michigan City, IN next year. Ukrops
Super Markets (804-794-2401) plans to open a store in Williamsburg, VA by 1997. Borders,
Inc. (313-995-9702) plans to open book stores in Ft. Lauderdale, FL and Bloomington, MI
during the Fall. Musicland
Stores Corp. (612-932-7700) recently opened a Media Play store in Indianapolis, IN. Financial
News... Circuit
City Stores, Inc. (804-527-4000) reported that first quarter sales increased 33% to $1.39
billion, up from $1.05 billion last year. Comparable
store sales increased 10% during the first quarter. Comparable
stores sales increased 10% over last year's results.
The company currently operates 320 superstores, five consumer electronics stores
and 32 mall-based Circuit City Express Stores nationwide. Genovese
Drug Stores, Inc. (516-420-1900) reported that sales for the first quarter increased 12.2%
to $178.983 million, but that net income dropped 9.1% to $1.543 million compared to the
same period last year. Net income for the
quarter includes the proceeds from the company's sale of its nursing home division. When that figure is subtracted, the net income for
the quarter shows a decrease of 51.2% from last year's figures. Comparable store sales for the quarter increased
7.8%. The company currently operates 114 drug
stores in NY, NJ and CT. Brendle's,
Inc. (910-526-5600) reported that its first quarter revenues decreased seven percent to
$24.153 million, down from $25.977 million last year.
For the quarter, the company incurred a net loss of $3.845 million compared to a
net income of $24.833 million last year. Ernst
Home Center, Inc. (206-621-6700) reported that its second quarter sales increased 3.2% to
$126.5 million compared to $122.6 million last year.
However, the company reported a net loss of $2.235 million for quarter compared to
a net income of $1.184 million last year. Comparable
store sales for the second were also down 6.6% over last year's results. During the second quarter, the company opened
eight superstores bringing the total for the first half of the year to 12. For the remainder of the fiscal year the company
expects open 15 more superstores and close seven of its base stores. The company operates its home improvement stores
in WA, OR, CA, ID, MT, UT, NV, CO and WY. Fred
Meyer (503-232-8844) reported that its first quarter profit was $3.1 million compared to
$16 million last year. Net sales for the
quarter only increased 0.5%, but comparable store sales fell 4.9% for the quarter. During the quarter, the company opened one store
in Monroe, WA and is planning to open two stores in Seattle, WA, two stores in Salt Lake
City, UT and one store in Kennewick, WA later this year.
The company currently operates 133 stores in OR, WA, UT, AK, ID, CA and MT. Stop
& Shop Companies, Inc. (617-770-8000) reported that its first quarter sales increased
4.7% to $1.192 billion, up from $1.139 billion last year.
Earnings increased 12% to $26 million, up from $23.2 million last year and
comparable store sales increased 0.3% over last year.
During the quarter, the company entered into a definitive agreement to purchase
Purity Supreme, Inc. for approximately $255 million.
The deal is expected to close during the summer.
Purity operates 55 supermarkets in CT, MA and NH and 66 Li'l Peach convenience
stores in MA. During the quarter, Stop &
Shop opened six superstores and is planning to open up six more before the end of its
fiscal year. The company currently operates
130 supermarkets in CT, MA, NY and RI. Correction In the
May 26 issue of The Dealmakers the phone number for Fila Footwear was incorrectly
reported. The correct phone number is
1-800-787-3452. The address is Fila USA,
11350 McCormick Road. Executive Plaza 3/ Suite 1200, Hunt Valley, MD 21031. In the
June 2 issue of The Dealmakers the contact person and expansion areas for Busy Body, Inc.
were incorrectly reported. The correct
contact person is Michelle Nordmeyer and the company is not sure where it plans to expand
its business. Need
To Rent Space Quickly? Try A Blitz Leasing
Campaign While
cleaning out the filing cabinet, we came across the following article on Blitz Leasing
which was submitted by Bruce Patterson years ago. We
had Chris Gesualdi, our editor, update and re-edit it and we hope you find it useful. Blitz
Leasing Blitz
Leasing is a marketing tool involving the mobilization of all of your company's available
"people" resources, including both leasing and non-leasing personnel, for the
purpose of achieving a "lease up" position for a particular shopping center in a
relatively short period of time. To put it
simply, "blitzing" helps you lease vacancies fast. Defining
The Leasing Problem The
word blitz, as defined by "The American Heritage Dictionary," means "a
swift concerted effort," so prior to
implementing a Blitz Leasing program it is important that the center to be
"blitzed" is carefully analyzed to determine the extent of the leasing problem
and its underlying cause. Such a
review and analysis involves the scheduling of a meeting of all personnel associated with
leasing the project, including leasing agents, management, accounting and legal department
personnel. There
are five reasons why everyone should be involved: 1) For
the exchange of information, comments and opinions relevant to the problem (have the
leasing agent(s) of the center and the accounting person most involved in the center
provide a brief history of the leasing activity, problems, etc.), 2) To
create a general awareness of the project, its history and performance, 3) To
clearly identify the center's problem(s), 4) To
explore all possible solutions to the problem. 5) To
establish a set of "leasing goals." Embarking
on a Blitz Leasing program without being fully informed is like going fishing without a
fishing pole. Awareness of the problem is the
first step towards finding a solution. Be as
candid as possible with all personnel involved on the center's past and present problems. Selecting
The Project Blitzing
is best suited for centers having a readily defined trading market. The reason being that all competing centers and
all the prospective retailers can be blitzed quickly and effectively, the blitzing doesn't
linger on and die a slow death A scatter-gun
approach does not work and the best "blitz" is when the blitzing starts from the
outside perimeter of the defined area, working/canvassing inward. In
order to justify the cost and effort that a blitz requires, the project should be seen as
a problem property where conventional leasing techniques have already been attempted with
little or no results. Careful attention
should be given in defining the trade area targeted for blitzing. It should, at the very least, encompass the
defined trade areas of the shopping center and, depending on the number and size of the
Blitzing Teams, it should also incorporate trading areas located outside the primary
trading area. Organizing
Your Team The
most successful Blitz Leasing teams are generally those that are able to effectively
harness a broad cross-section of talent and expertise from within the company. A team's size, to a large extent, depends on the
size of the trade area to be blitzed and the number of people available. The resource group should be divided into teams
comprising at least four people with a leader responsible for each team. Where possible and when available, the team leader
should be a qualified leasing person and, ideally, the teams should have diverse
personalities, functions and backgrounds. Methodology
and Roles Much
of the success of a Blitz Leasing effort can be attributed directly to the importance and
commitment given to it by senior management and the competitive environment that is
created. It is truly a team effort in every
sense of the meaning. To be successful,
everybody associated with the activity must have both a strong commitment and be totally
motivated. Such leadership can only come from
the top of the organization down to each team member. The
senior person in charge of orchestrating the leasing blitz should be responsible for
subdividing the target area amongst the various teams.
The responsibility for allocating specific areas within each team's territory
should be left up to the Team Leader. Team
Leaders should also be briefed in advance as to what their function is. In order to encourage a competitive environment
each team should have its own identity and set its own objectives. The
team members' function is to simply generate leads by contacting as many prospective
prospects as possible. Once interest is
identified, the team member should turn the prospect over to the Team Leader. During the blitzing period, the entire focus and
attention of the team members must be on achieving the team's objectives. Daily briefing meetings should take place,
preferably at the beginning of each day. Team
Preparation Quite
apart from your team members being motivated and fully committed to the cause, they must
also be properly informed and equipped to perform the function of tenant prospecting/lead
generating. As stated earlier, the team
leader should be an experienced leasing agent fully capable of closing deals. His/her function in Blitz Leasing is to give
guidance and leadership to the members of the team and be ready and available to close on
leads generated by fellow team members. Each
team should be fully briefed on the project's trade area demographics, history, layout,
tenant mix and positive features in addition to costs of C.A.M., taxes, insurance and rent
ranges. All team members should be supplied
with information kits that can be left with prospective tenants and, of course, they
should be briefed on how to approach prospective tenants.
Also recommended is the use of a "ma/pa" lease over the standard lease. A "ma/pa" lease is no longer than 15
pages, written using large print and is simple to understand. Traditionally, "blitz" leasing generates
leads/deals with locals who are not very sophisticated and sign short term leases (two to
four years), therefore standard "landlord protection" is not needed. Timeframe Like
the word "blitz" suggests, the most effective leasing blitzes are those that
take place within an extremely short timeframe usually confined to no more than one week. The length of a blitz will depend, to some extent,
on the size of the area being "blitzed" and the number of people
"blitzing," but ideally, and in order to sustain interest and momentum, the
blitz should have a definite starting and ending time. "Doing
It" Blitzing
itself is identical to a good canvassing technique.
The team, after being briefed on all aspects of the center's strengths and
weaknesses, is given a specific area to canvass. This
canvassing includes all shopping centers, freestanding stores, downtowns and store fronts. No retail operation is left "unblitzed." The "blitzers" should all have leasing
plans, a one page fact sheet, business cards, a yellow pad and plenty of pens. Make sure all material has the center's name,
location and a phone number. The team should
not overdress, as in the majority of cases they will be dealing with entrepreneurs who
tend not to trust "suits." Every
store in the area should be visited (of course, illogical stores are excluded, i.e.: if
you have a pizza operation, don't canvass another). After
presenting themselves to the first store personnel they encounter, the blitzer should ask
for the owner and if he/she is not in, the store manager should be requested. The presentation of the center should be kept to
under three minutes and no "hard sale" should be tried. The mission of the blitzer is to generate leads
and not to attempt to close deals. Always
leave a brochure and business card and always, always get a business card or at worst, the
phone number of the owner, even if the site is rejected.
Once the blitzing is completed, a form letter and another brochure should be sent
to every retailer thanking them for their time. The
brochure left today quite often becomes the "deal" three to six months later. In addition, a database of all the retailers
contacted should be kept (preferably on a computerized database) for future mailings and
follow-ups. Follow-up
and Assessment A
debriefing session should be scheduled at the conclusion of the leasing blitz for the
purpose of reviewing not only performance versus objectives, but to assess the entire
process as a means of determining any improvements that could be made. In
addition to generating leads and hopefully executing some leases, substantial
"feedback" is generated on the center's perception to the community and
retailer. This information should be used to
implement improvements to the center as well as to improve its desirability to the
customer and retailer alike. Incentives
and Rewards Once
final results can be determined, a victory party should be held for all participants,
which also provides the opportunity of bestowing recognition and rewards on the winning
team, as well as the individual achievers. Incentives
and rewards play an important roles in ensuring the success of any leasing blitz. Each
team leader should be allocated a budget and related guidelines that will enable him/her
to initiate their own program of incentives within the framework of the team's objectives. Generally
speaking, rewards are more effective if they are in the form of prizes rather than money,
but they should be liberal enough to sustain interest and enthusiasm. In addition to team incentives, there should also
be a major reward for the team that turns in the best performance. Apart
from rewards of a material nature, individual, as well as team recognition, is by far the
most gratifying and effective reward one can receive, particularly when it is widely
publicized amongst his/her peers. Buyers
& Sellers of Commercial Properties Faber
Management Service is selling Chili-Paul Plaza in the Town of Chili, NY. The 20-acre site includes 128,000 sq.ft. of retail
space that is 90% leased. Tenants include Big
M Market, Radio Shack, Blockbuster Video, Gold's Gym, Monro Muffler, MotoPhoto, M&T
Bank and Marine Midland Bank. The site is
located across from the Town Hall and library. The
asking price is $5.5 million and $2.8 million of an assumable non-recourse loan is
available. An additional 3.26 acres of land
is also available for sale at an asking price of $600,000. For more information, contact Bernard J.
Iacovangelo at (716-423-0929), Fax (546-8567). Aaron
Asset Group has the listing to sell 10 Jack-in-The-Box restaurants, five Denny's
restaurants, three Arby's restaurants as well as some Burger King restaurants and other
regional restaurants nationwide. Most asking
prices are based on a 10% cap and financing is available on some properties. The company also has the listing to sell
Blockbuster Video, Hollywood Video and other video stores nationwide. Most are new construction. The asking prices are based on caps between 8.8%
and 10.4%. For more information, contact Michael Staver at
(817-481-8181), Fax (488-5841). PropertyLink
has the listing to sell 17,000 sq.ft. of land at a freeway exit in Modesto, CA. The asking price is $170,000. For more information, contact Don McCoon at
(209-667-1196), Fax (667-1197). Pacific
Union is selling a 10,000 sq.ft. two-story retail/office building in Hollister, CA. The asking price is $945,000. The property can also be NNN leased for $5,000 per
month. The company also is selling a
one-story retail/office building in Hayward, CA. Current
gross income is $42,000 per year and potential gross income is $48,000 per year fully
leased. The asking price is $357,000. For more information, contact June Nye-Nebel at
(800-743-2520, Ext. 366), Fax (510-743-9339). West
Side Mall Associates is selling West Side Mall in Wilkes-Barre, PA. The 363,000 sq.ft. project is anchored by Hills,
Burlington Coat Factory, Staples, Insalacos, Petrie, Walden Books and Deb Shops. The asking price is $12.6 million and $9 million
of financing is available at 9.25% interest for 30 years. For more information, contact Norman E. Weiss at
(717-287-2143), Fax (287-7217). Burnham
USA Equities, Inc. recently purchased a 150,000 sq.ft. shopping center in San Bernadino
county, CA from CrossLand Federal Savings Bank. The
project is anchored by Payless Drugs and Food For Less. For more information, contact Burnham USA
Equities, Inc. at (714-760-9150). Benjamin
E. Sherman & Sons is auctioning a 50,870 sq.ft. retail and office center in
Janesville, WI. The project is anchored by
Color Tile, Crafters Mall, First Financial Savings and Metropolitan Life. The project has an NOI of $316,000 and is 89%
occupied. The company has the listing to sell
a one-story, 31,357 sq.ft. retail center on W. Liberty Street in Wauconda, IL. The site is anchored by Ace Hardware and is 92%
leased. The asking price is $2.1 million. The company also has the listing to sell four
Children's World Day/Learning Centers in IL. The
first project is located in Arlington Heights on a 35,368 sq.ft. piece of land. The building is 6,175 sq.ft. and the asking price
is $1.045 million. The second project is
located in Roselle on a 53,905 sq.ft. piece of land.
The building measures 6,175 sq.ft. and the asking price is $1.035 million. The third project is located in Bloomingdale on a
35,673 sq.ft. piece of land. The building is
6,183 sq.ft. and the asking price is $1.195 million.
The fourth project is located in Hazel Crest on a 45,000 sq.ft. piece of land. The building measures 6,175 sq.ft. and the asking
price is $980,000. For more information, contact Susan B. Silver at
(312-220-9000), Fax 220-9114). Blume
Realty has the listing to sell South Sound Center in Olympia, WA. The project is located across from a regional
mall. The asking price is $450,000 and
financing is available. The company has the
listing to sell a 100 ft. by 416 ft. parcel of land zoned retail/commercial in Olympia,
WA. The site is located near I-5 exit 107 and
is suitable for a restaurant, bank or other freestanding tenant. The asking price is $550,000. The company has the listing to sell Makoviney
Motors in Olympia, WA. The site, zoned
retail/commercial, is located on the corner of a business corridor near a shopping center
and state offices. The asking price is
$795,000. The company also has the listing to
sell Olympia East Plaza In Olympia, WA. The
asking price is $3.849 million. For more information, contact Bob Terhune at
(360-491-4600 or 791-3368), Fax (459-8747). KG
Properties has the listing to sell Colonia Plaza in Sacramento, CA. The 57,000 sq.ft. project is mostly vacant. The asking price is $1.9 million with $1.1 million
of financing available. For more information, contact Chris Gianvlias at
(916-383-2511), Fax (383-9405). Mark
Realty Corp. represents an equity fund in the market to acquire anchored shopping centers
in the 40,000 sq.ft. to 150,000 sq.ft. size range. Properties
of interest are located in the eastern time zone, are second and third tier locations and
have cap rates of 10.5%. For more information, contact Todd C. Zapolski at
(919-688-8006), Fax (688-7055). Lease
Signings Ludwig
and Karas, Inc. (810-539-1700) leased 15,000 sq.ft. to MC Sports at Hoover-Eleven Center
in Warren, MI and leased 12,000 sq.ft. to Family Books at Fashion Square West in Saginaw,
MI. Divaris
Real Estate, Inc. (804-497-2113) leased 1,525 sq.ft. to Country Hand-Crafted Furniture at
Gallery Shoppes in Lightfoot, VA. ALBA
Consulting Corporation (813-443-0718) leased 1,000 sq.ft. to Amscot Holdings, Inc. and
1,000 sq.ft. to Fancy Nails at Winco Center in Clearwater, FL; 940 sq.ft. to Save-On Meats
at Columbia Plaza in Clearwater, FL and 800 sq.ft. to Volpicelli Spices and Antiques at
6050 Building in Pinellas Park, FL. Neal*Mannausa,
Inc. (813-365-1511) leased 11,352 sq.ft. to PatioAmerica, Inc. in Sarasota, FL. The
Sansone Group, Inc. (314-822-9009) leased 3,397 sq.ft. to Lutheran Medical Center at
Ronnie's Plaza in St. Louis, MO. Rappaport
Management Company (703-641-9103) leased 3,198 sq.ft. to Rosemary's Thyme Restaurant and
2,354 sq.ft. to Wallpaper Galleries at Colonnade at Union Mill in Clifton, VA; 1,164
sq.ft. to Hair and Nails 2000 at South Lakes Village Center in Reston, VA and 3,000 sq.ft.
to Shogun Japanese Steakhouse in Courthouse Plaza in Fairfax, VA. Koll
(714-833-3030) leased 21,824 sq.ft. to Sears Paint & Hardware at Iroquois Center in
Naperville, IL. Gold
& Company, Inc. (412-471-4455) leased 1,144 sq.ft. to Enterprise Rent-A-Car at
Loehmann's Plaza in Monroeville, PA; 7,400 sq.ft. to Matsushita Services Company in
Chartiers Valley Shopping Center in Bridgeville, PA and 16,200 sq.ft. to Nationwide
Warehouse & Storage for a furniture store in downtown Pittsburgh, PA. Exclusives:
Leasing & Management Assignments Hicks
& Rotner Associates, Inc. (301-656-3030) has been appointed the exclusive leasing
agent for four shopping centers, totally approximately 1.1 million sq.ft., in Northern VA
and MD. The shopping centers in VA include
the 327,000 sq.ft. Village Center at Dulles in Herndon, VA which is anchored by Shoppers
Food Warehouse, Staples, CVS and Frugal Fannies and the 112,251 sq.ft. Bailey's Crossroads
Shopping Center in Bailey's Crossroads, VA. A
40,000 sq.ft. anchor space is available. The
shopping centers in MD include the 526,731 sq.ft. Iverson Mall in Hillcrest Heights, MD
which is anchored by Woodward & Lothrop and Montgomery Ward and the 130,000 sq.ft.
Georgetown Square in Bethesda, MD which is anchored by Giant Food and Hamburger Hamlet. An anchor space is available. CB
Commercial Real Estate (708-706-4928) has been appointed the exclusive leasing agent for
River Pointe of Algonquin, an 83,727 sq.ft. shopping center in Algonquin, IL. The project is anchored by Jewel and 100,000
sq.ft. of space is available in the phase II expansion.
The company was also appointed the exclusive leasing agent for Heritage Plaza, a
128,942 sq.ft. shopping center in Carol Stream, IL. The
project is also anchored by Jewel and an expansion of 90,000 sq.ft. is planned. Mid-America
Asset Management Co. (708-954-7300) has been named the exclusive management representative
for Village Square of Northbrook Phase I in Northbrook, IL.
The 93,000 sq.ft. project, part of a total planned GLA of 335,000 sq.ft., is 100%
pre-leased and is anchored by Linen 'N Things, Today's Man and Zany Brainy. Phase II, which is scheduled to open during Spring
1996, will be anchored by Nordstrom Rack, Fresh Fields, Marshall's, Super Crown Books,
Circuit City, The Container Store and The Sports Authority.
The company was also named the court-appointed receiver for Plaza Verde, a 110,000
sq.ft. shopping center in Buffalo Grove. Additionally,
the company has been named by Noodle Kidoodle as its exclusive Chicagoland representative
for shopping center site selection. Noodle
Kidoodle is a retail chain carrying merchandise designed to entertain, challenge and
educate children from infants through age 12. Four
sites, ranging in size from 10,000 sq.ft. to 13,000 sq.ft., have already been selected and
are expected to open during the summer and early fall.
Stores will open in downtown Chicago; at Rivertree Court Shopping Center in Vernon
Hills; at Edens Plaza Shopping Center in Wilmette and at Woodgrove Festival Shopping
Center in Darien. Negotiations are continuing
for stores in Arlington Heights and Wheaton. Levin
Management Corporation (908-226-5267) has been named the exclusive managing and leasing
agent for Plaza Square in Wayne, NJ by LaSalle Partners.
The 102,000 sq.ft. project is anchored by a 65,000 sq.ft. Shop-Rite supermarket. Space
Place California Calexico- El Paseo Power Center is anchored by Sam's Club,
Wal*Mart, Footlocker, Payless, Petrie, Clothestime, Dress Barn, GNC, Subway, Sizzler,
Kentucky Fried Chicken and Jack In The Box. The
project has spaces between 750 sq.ft. to 7,000 sq.ft. as well as freestanding
build-to-suit pads available for lease. Demographics
include a five-mile population of over one million. Other
retailers in the area include Kmart, MacFrugals, Toys 'R Us, Dennys and Carrows. For details, contact Rob Hardy of Pacific Ridge at
(602-230-8878, Fax (230-8882). Downey- A 4,032 sq.ft. former Fitting Image store is
available for lease at Stonewood Shopping Center. The
lease expires January 31, 2001. For details, contact Denni Strozewski of The
Fitting Image at (800-487-4882), Fax (617-422-6212). Mira
Mesa- Scripps/Marshalls Plaza is anchored by
Video Library and Chuck E. Cheese. The
project has a 22,300 sq.ft. former Marshalls store available for lease. The site fronts Mira Mesa Boulevard and I-15. For details, contact Amanda Andrade of Marshalls
at (508-474-7341). Colorado Grand
Junction- Rock Mountain Plaza is a 470,000
sq.ft. project to be constructed this Fall with an expected opening date of Summer 1996. The project has spaces from 20,000 sq.ft. to
100,000 sq.ft. available for lease. The site
fronts Highway 50, Highway 6 and Independent Avenue which generate a daily traffic count
of 25,000 cars. The project is located near
Mesa Mall and Sam's Club. Demographics
include a five-mile population of 63,605 earning $33,796 as the average income and a
10-mile population of 95,572 earning $33,724 as the average income. For details, contact Tyler S. Oliver of High
Plains Land Co. at (913-345-2354), Fax (345-2354). Florida Tampa- The 105,125 sq.ft. Grand Plaza Shopping Center has
an 8,100 sq.ft. space available for lease. The
site fronts Dale Mabry Highway which generates a daily traffic count of 63,000 cars. Demographics include a five-mile population of
175,389 earning $42,833 as the average household income. For details, contact Vicki Anthony of ABACO
Management, Inc. at (813-264-2440), Fax (969-2086). New
Jersey Toms
River- A 14 acre site on Hooper Avenue,
adjacent to the Ocean County Mall, will be developed into a 102,000 sq.ft. shopping center
with four pad sites. Spaces are available for
lease. Demographics include a five-mile
population of 160,000 earning $43,000 as the average income. For details, contact Mike Parkhill of K.
Hovnanian, Inc. at (908-922-6100), Fax (922-9544). North
Carolina Durham/Chapel
Hill- Falconbridge Center has a build-to-suit
space from 17,000 sq.ft. to 30,000 sq.ft. available for lease. The project fronts Highway 54 and I-40 which
generate a daily traffic count of 25,000 cars. Demographics
include a three-mile average household income of $54,000 with 67% of residents holding
bachelor's degrees and 33% holding post-graduate degrees. For more information, contact Joe L. Jernigan of
Real Estate Associates at (919-489-2000), Fax (493-8533). Joe L.
Jernigan of Real Estate Associates at (919-489-2000), Fax (493-8533). |