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Issue Number 41
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The Dealmakers Issue Number 41 for the week of November 13, 1998. My Way by Ted Kraus I just got back from the National Retail Tenants Conference in Orlando (the organization is not part of the ICSC, for membership information contact David Prior of CVS at 401-765-1500) where nearly 400 retailers from Lowes Home Centers, The Limited, Barnes & Noble and CVS to MusicLand, Kohl’s Department Stores and Little Caesar’s were in attendance. Sounds like a brokers’ or developers’ dream, right? The answer is "no." I felt like a fish out of water during the entire event. When we first heard about this show, four to six months ago, I immediately signed up to attend and exhibit. With 400 retailers in attendance, it’s the equivalent of an ICSC show of 4000 (usually 10% of those attending an ICSC event are retailers). As time grew closer for the event and we learned more, we found it was geared towards the retailer’s property managers, legal assistants, tax assistants and such which brought out reservations on my behalf on whether or not we should attend; since my primary purpose for going was to meet retailers and make deals and this was sounding like a non-deal making event. Long story short, I decided to go, based on the premise of "nothing ventured, nothing gained." While from a "dealmaking aspect," the show was a waste, I’m glad I went. The people attending were the workers of their respective companies, not the rainmakers who strike a fast deal and than leave it to these people to clean up afterwards. They were the people who negotiate the "boiler plate" issues after the "business aspects" are agreed to, fight with the landlord on overbilling of CAM charges, or determine if the property taxes are correct. It can be boring and extremely detail oriented, but it is necessary work. Their opinion of their company’s real estate reps quite often left a lot to be desired. Many felt the "rainmakers" were really the "clouds" in their company, causing more harm than good. (What was "interesting" was they had no opinion, good or bad, of the role of brokers in our industry, it was one of the few times I was at a show and didn’t feel the need to justify my existence.) They knew most of the strengths and weaknesses of their real estate reps and in most cases were more than willing to go into details on their weaknesses (they love to gossip). It was a young group, primarily female (if I was single, this could have been a great show). The primary purpose for the event was as a "university," similar to the classes I used to attend which were presented by the ICSC in New Orleans 20 years ago, with the big difference being the classes are: "How to know when the developer is screwing you" instead of "Here’s how to beat the retailer." The people and event reminded me of where the ICSC was 25 years ago: young, passionate and wanting to learn, the only difference their visions of getting rich are based on stock options, not becoming a developer. Also, their pay is a lot less than their leasing equivalents. Another interesting tidbit I picked up in the vast majority of conversations, the developers these people hated to deal with the most were Rouse and Simon. (Some thought they were just short of being thieves.) The developer they enjoyed dealing with the most was Weingarten Realty of Texas. At least 12 people commented that Weingarten seems to really, really care about the tenant and their relationship. While there were other publications exhibiting (Shopping Center Digest and Shopping Center Business), there was only one other brokerage company besides us. Excess Space Disposition was both promoting surplus property and their services. The vast majority of exhibitors were either software oriented or consulting firms that do audits of developer’s CAM charges. I was talking to the property manager of a large, big box retailer that’s been in business over 20 years. He was telling me how, up to two years ago there was only one computer in the company and they never audited. Since implementing their audit programs, they have saved MILLION$ over the term of the leases, so his department has paid for itself many times over. While this isn’t a show I’d recommend for "dealmakers," if you’re a retailer, I highly suggest your property management division becomes a member. On a different but similar note, Ann attended the Chicago ICSC dealmaking show (next week I go to Atlanta; I feel we spend half our business life at these events). While the "review" of the show is second hand, I find her to be a reliable source. She said the show was active with excellent attendance, but short on retailers compared to the majority of shows we’ve been attending lately. There also appeared to be more older space available than at most events with few new developments being announced. What I found interesting is she also reported "lots" of companies were present offering financing, and yet in conversations with friends; financing, while in no manner is disappearing, is becoming much more difficult and expensive to obtain in just the last month alone, even with interest rate drops. Not only are developers finding it more difficult and expensive to get funding, but several retailers I know have had their credit line lowered. So there can be big trouble borrowing on the horizon. While the economy still appears to be in great shape, the last few weeks I’ve heard of lower sales or comp sales, more difficult financing and more struggles to lease than I’ve heard in the last two years. I don’t think a recession is eminent, but I’d highly recommend lowering costs, increasing cash and putting some restraint in all aspects of dealmaking; from retailers, developers and brokers. Within the year, I’m willing to bet on a substantial increase in retail bankruptcies (happy Moe), cutbacks in development and substantial difficulties for some of the recent acquisitions/mergers of brokerage/management companies. On a different note: for the "Clients Are Stupid" Hall of Fame, I nominate one of ours who purchased land earlier this year with the intention of building a center. Before any real leasing was done, a "big box" retailer came to the table wanting to ground lease/purchase most of the acreage. The client asked what they were willing pay, to which the retailer replied: "It’s your land, what do you want?" After much discussion and refusal on the client’s part to name a price, the retailer made an offer; admittedly on the low side. He now refuses to talk to them because their offer was insulting. Retailers Expanding in The South Central Region Fiesta Mart operates 40 locations in TX. The supermarkets occupy
spaces of 25,000 sq.ft. to 48,000 sq.ft. in freestanding facilities and strip centers.
Plans call for six openings in the coming 18 months. Expansion will take place in the
existing market. Leases running 15 years are typical. Lot$Off Corp. trades as Lot$Off at 44 locations in LA, NM,
OK, TN and TX. The discount stores occupy spaces of 15,000 sq.ft. to 18,000 sq.ft. in
regional malls and strip centers. Plans call for as many as ten openings in the coming 18
months. Expansion will take place in TX. Leases running five years are typical. Horkey Oil Co., Inc. does business as Friend’s C-Stores
at 47 locations in TX. The convenience stores occupy spaces of 2,000 sq.ft. to 3,000
sq.ft. in freestanding facilities. Plans call for the opening of four units in the coming
18 months. Expansion will take place in the existing market. Preferred demographics
include a population of 2,000 within one mile earning $16,000 as the average income.
Leases running 20 years are typical and the company cites 7-11 and Town &
Country as competition. Sunbelt Nursery Group trades as Sunbelt Nursery at 90
locations in AZ, CA, OK and TX. The home improvement stores, selling garden items, occupy
spaces of 40,000 sq.ft. to 60,000 sq.ft. in freestanding facilities and strip centers.
Growth opportunities are sought in the existing market. Jerel, Inc. does business as Inlook Outlet Store at three
locations in TX. The stores, selling women’s ready-to-wear at discount price-points,
occupy spaces of 1,400 sq.ft. to 2,000 sq.ft. in freestanding facilities and strip
centers. Plans call for at least one opening in the coming 18 months. Expansion will take
place in the existing market. New Construction R.K. Associates recently broke ground on R.K. Newport Towne
Center in Newport, RI. The project involves the "de-malling" of an enclosed
mall, formerly known as Newport Mall, into an "open air" shopping center
containing 280,000 sq.ft. of GLA. The project will be anchored by a 63,437 sq.ft. Super
Stop and Shop, a 32,000 sq.ft. T.J. Maxx store, Jo Ann Fabrics, Blockbuster
Video, Foot Locker, Waldenbooks and West Marine. General Growth Properties, Inc. recently broke ground on Stonebriar
Mall at the Bridges in Frisco, TX. The 1.2 million sq.ft., two-level project will be
anchored by J.C. Penney, Macy’s, Nordstrom and Sears. Space for an
additional department store, a 24-screen movie theater and 80,000 sq.ft. of big box space
and sit down restaurant space will also be developed. Approximately 300,000 sq.ft. of
specialty shop space will also be constructed. The 130-acre site on which the mall is
being built upon is located on the north side of SH121, between Preston Road and Dallas
North Tollway. Projected 1999 trade area demographics include a population of 313,200
earning $92,100 as the average household income. A Fall 2000 opening is planned. Glimcher Realty Trust recently announced plans to develop a
super-regional mall on a 203-acre parcel of land located at the intersection of I-355
Tollway and Boughton Road, about 30 miles southwest of Chicago in Bolingbrook, IL. The
plans call for an initial one million sq.ft. of GLA with full build-out potential of 1.3
million sq.ft. With a complete complement of tenants including a multiplex cinema and an
atrium food court, the mall is expected occupy about 90 acres of the site. A 2001 opening
is currently planned. In other news, Glimcher recently announced that it has signed 16
tenants for its proposed Jersey Garden Value MegaMall in Elizabeth, NJ. The 1.3
million sq.ft. project, which is expected to open during Fall 1999, will be anchored by Bed
Bath & Beyond, Mikasa, Group USA, Saks Fifth Avenue Off 5th Outlet, Foot Locker,
Marshalls and a Loews Cinema. Overall, the project is 60% leased. Lincoln Property Company is developing Trinity Commons in
Fort Worth, TX. The 225,000 sq.ft. project will be anchored by a Tom Thumb "New
Generation" Market, Blockbuster, Hallmark, Marble Slab Creamery, Pappagallo, Sprint
and Starbucks. Four freestanding pad sites will also be developed. The company is
also developing LincolnPark in Dallas, TX. The mixed-use project will encompass an
upscale shopping area, office towers, assisted living facilities and a three-story,
traditional style townhome community. The retail component of the project, 150,000 sq.ft.
in total, will be anchored by Simon-David’s, The Container Store, Barnes &
Noble and The Cheesecake Factory. The site is located across from NorthPark
Mall, the second highest performing mall in TX, which is anchored by Neiman Marcus,
Dillard’s, Lord & Taylor and JC Penney. JDN Realty Corporation plans to develop a 229,200 sq.ft. shopping
center in Athens, GA. The project, which will be jointly developed with Wal*Mart
Stores, Inc., will be anchored by a 204,000 sq.ft. Wal*Mart Supercenter. The
remaining 25,200 sq.ft. will be occupied by national, regional and local tenants. A third
quarter 1999 opening is planned. Sources of Financing Holliday Fenoglio Fowler (212-245-2425) recently secured $38 million in financing for the acquisition of Rye Ridge Shopping Center on behalf of Win Properties, Inc. Holliday Fenoglio Fowler arranged the transaction through American General Investment Corp. with the lender providing a low interest financing package that included a 7.14% fixed-rate loan for 15 years with a refinancing option after five years. Finova Realty Capital (877-825-4810) recently arranged a $7.45 million permanent loan for the owners of Bay Plaza Shopping Center in National City, CA. The 73% loan-to-value will be used to refinance the 77,252 sq.ft. neighborhood shopping center. The fixed-rate financing features a 10-year term amortized over 30 years. The company arranged $5.4 million in permanent financing for El Paseo Collection in Palm Desert, CA. The owners of the 27,877 sq.ft. project received a fixed-rate loan with a seven-year term and is amortized over 30 years. The company arranged a $5.15 million loan for Montclair Village Plaza in Montclair, CA. The 80% loan-to-value has a five year term and is amortized over 25 years. The loan will be used to pay off existing debt. Finova recently participated in the $34 million financing for the expansion and renovation of Garden Promenade in Garden Grove, CA. The financing, which was structured to include a three-year bridge loan as well as a construction loan, was secured for the owners of the 380,000 sq.ft. project. The loan is being used to refinance the existing first mortgage and provide additional capital for renovation and expansion of the project, which will include a new 16-screen Regal Cinema. Finova funded 50% of the financing through a participation in the construction loan with an arrangement to provide permanent financing upon the property’s stabilization. The company also arranged $18.5 million in acquisition financing for the buyer of Granite State Marketplace in Hookset, NH. The 250,000 sq.ft. project is anchored by Wal*Mart and Shaw’s Supermarket. The 10-year financing with a 30-year amortization was underwritten at 90% loan-to-acquisition cost. Cooper-Horowitz, Inc. (212-986-8400) recently placed the following loans with life insurance companies on behalf of Walgreen Drug Stores: $2.3 million for a store in San Antonio, TX; $2.2 million for a unit in Dallas, TX; $2.172 million and $1.9 million for stores in Lubbock, TX; $2.69 million for a unit in Dayton, OH; $2.975 million for a unit in Miamisburg, OH; $2.35 million for two stores in Pembroke Pines and Miami Beach, FL; $2.475 million for a store in Lawton, OK; $3 million for a store in Alton, IL; $1.845 million for a store in St. Louis, MO and $2.1 million for a unit in Wentzville, MO. The stores range in size from 13,500 sq.ft. to 15,180 sq.ft. Lease Signings KLNB, Inc. (410-321-0100) leased 12,000 sq.ft. to Dollar Express at a former Woolworth space at Reisterstown Shopping Center in Reisterstown, MD. Sigma National, Inc. (804-320-6100) leased 2,755 sq.ft. to The Russian Ballet Academy at Midlothian Market Shopping Center in Richmond, VA; 2,000 sq.ft. to GNC at Willow Oaks Village Square in Hampton, VA; 1,064 sq.ft. to GNC at Village Courts in Lynchburg, VA; 1,500 sq.ft. to GNC at River Bend in Covington, VA and 1,600 sq.ft. to GNC at Parkway Market Place in Virginia Beach, VA. Westcor Shopping Centers (602-953-6200) leased 4,026 sq.ft. to SportCage at Metrocenter in Phoenix, AZ. Uniwest Realty, Inc. (703-671-2880) leased 13,000 sq.ft. to Old Navy at Central Park Shopping Center in Fredericksburg, VA; three spaces to Ruby Tuesday in Frederick, MD; Greenbelt, MD and Fredericksburg, VA and a total of 96,216 sq.ft. to Martins Supermarket, CVS, Fashion Bug, Sherwin Williams Paints, Long & Foster Real Estate, Video Warehouse, Star Rentals, The Hair Cuttery, Charles Town Cleaners, Charles Town Laundromat, Karate Studio, Great Wall Chinese Restaurant, Taco Bell, AutoZone, Payless Shoes, My Dollar Store and GNC in phase I of Jefferson Crossing Shopping Center in Charles Town, WV. Cavanaughs Hospitality Corporation (800-325-4000) leased 8,600 sq.ft. to Red Robin Restaurants and 1,300 sq.ft. to Starbucks in downtown Spokane, WA and 3,000 sq.ft. to The Buckle at Kalispell Center Mall in Kalispell, MT. Aries Deitch & Endelson, Inc. (914-949-2800) leased 3,450 sq.ft. to Golf USA in Scarsdale, NY. Metro Commercial Real Estate, Inc. (609-866-1900) leased 23,000 sq.ft. to Barnes & Noble at Montgomery Square in Montgomeryville, PA. Capital Realty Advisors, Inc. (561-624-5888) leased 18,750 sq.ft. to Buy For Less at Plaza III Warehouse in Oklahoma City, OK. Lead Sheet Designs Apparel The 104-unit chain operates locations East of the Mississippi River. The apparel stores occupy spaces of 10,000 sq.ft. in outlet centers. Preferred co-tenants include Gap, Polo and Tommy. Plans call for 10 openings in the coming 18 months. Expansion will take place along the East Coast. Preferred demographics include a population of 250,000 within five miles earning $75,000 as the average income. Leases running 10 years are typical. Ellen Tracey Apparel The 12-unit chain operates locations in AL, CA, FL, IN, NJ, NY, SC, TN and VT. The women’s apparel stores occupy spaces of 3,000 sq.ft. to 4,500 sq.ft. in outlet centers and regional malls. Preferred co-tenants include Ralph Lauren, Saks Off Fifth and Barneys. Plans call for as many as six openings in the coming 18 months. Expansion will take place in CA, CT, MA, MI and WI. Leases running seven years are typical. Mystere, Inc. Apparel The five-unit chain operates locations in CA. The stores, selling high fashion European apparel, private label clothing, shoes and related accessories for women, occupy spaces of 1,800 sq.ft. to 2,200 sq.ft. in freestanding facilities and regional malls. Preferred anchors include Bloomingdales, Macy’s and Nordstrom. Plans call for as many as two openings in the coming 18 months. Expansion will take place in CA and NV. Leases running five to ten years are typical. Pearl Artists & Craft Arts/Crafts/Fabrics The 21-unit chain operates locations in CA, FL, GA, MD, MA, NJ, NY, TX and VA. The stores, selling arts and crafts supplies, occupy spaces of 20,000 sq.ft. in freestanding facilities and strip centers. Plans call for 20 openings in the coming 18 months. Expansion will take place in AL, northern CA, FL, GA, NC, SC and VA. Leases running five years, with options, are typical. Crown Industries, Inc. Automotive The 11-unit chain operates locations in DE, NJ, NY and PA. The automotive parts stores occupy spaces of 6,000 sq.ft. in freestanding facilities and strip centers. Plans call for the opening of four units in the coming 18 months. Expansion will take place in DE, NJ and PA. Leases running five years are typical. Speedy Lube Automotive The nine-unit chain operates locations in IL, IN and WI. The automotive service centers, offering 10-minute oil changes, occupy spaces of 1,200 sq.ft. in freestanding facilities on pad sites of strip centers. Growth opportunities are sought in the existing markets. Evenson’s Hallmark Cards Cards & Gifts The 2,000-unit chain operates locations in CT, DE, FL, GA, ME, MA, NY, NC, PA, SC, TN, VA, VT and Washington, D.C. The stores, selling Hallmark cards and gifts, occupy spaces of 3,500 sq.ft. to 5,500 sq.ft. in downtown store fronts, regional malls, power and strip centers. Preferred anchors include T.J. Maxx, Wal*Mart and supermarkets. Plans call for 150 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. Leases running five years, with a five-year option, are typical and the company prefers a vanilla shell. The Kroger Co. Convenience Store The 170-unit chain operates locations in IA, KS and NE. The convenience stores occupy spaces of 3,500 sq.ft. in freestanding facilities. Plans call for as many as eight openings in the coming 18 months. Expansion will take place in the existing markets. Leases running 15 to 20 years are typical. Marathon Ashland Petroleum LLC Convenience Store The 2,300-unit chain operates locations in AL, FL, GA, IL, IN, KY, LA, MI, MN, MS, NC, OH, SC, TN, WV and WI. The convenience stores occupy freestanding facilities on land areas running at least one acre. Plans call for as many as 20 openings in the coming 18 months. Expansion will take place in IL, OH, Minneapolis, MN and the Southeastern region. The company prefers to purchase its locations. Fred’s, Inc. Discount The 306-unit chain operates locations in AL, AR, GA, LA, MS, MO, NC and TN. The dollar stores occupy spaces of 12,000 sq.ft. to 16,000 sq.ft. in strip centers. Preferred anchors include supermarkets. Growth opportunities are sought in the existing markets. General Mobile Electronics Electronics The 39-unit chain operates locations in CA. The stores, selling car stereos, car alarms, pagers, wireless communication systems and navigation systems, occupy spaces of 2,000 sq.ft. to 3,500 sq.ft. in downtown store fronts, freestanding facilities, power and strip centers. Plans call for six openings in the coming 18 months. Expansion will take place in AZ, CA and NV. Leases running 10 years are typical. Pretzels Plus, Inc. Food The 25-unit chain operates locations in KY, MD, NC, PA, SC, TN and VA. The stores, selling fresh handmade pretzels, occupy spaces of 600 sq.ft. to 1,000 sq.ft. in downtown store fronts, outlet centers and regional malls. Preferred anchors include Belk, J.C. Penney, Leggetts, Nordstrom and Sears. Plans call for six openings in the coming 18 months. Expansion will take place in CA and the Northeastern region. Preferred demographics include a population of 100,000 within 10 miles earning $40,000 as the average income. Leases running five years are typical and the company, which is franchising, cites Auntie Anne’s and Pretzel Time as competition. Ruby Tuesday, Inc. 4721 Morrison Drive Food The 400-unit chain operates locations nationwide. The casual restaurants occupy spaces of 4,400 sq.ft. to 5,200 sq.ft. in freestanding facilities and regional malls. Plans call for 75 openings in the coming 18 months. Expansion will take place nationwide. Leases running 20 years, with options, are typical and the company cites Applebee’s, Chili’s and TGIF as competition. Goodwill Industries of Greater NJ & NY General Merchandise The 41-unit chain operates locations in NJ and NY. The general merchandise stores occupy spaces of 6,500 sq.ft. to 15,000 sq.ft. in downtown store fronts, freestanding facilities and strip centers. Preferred anchors include T.J. Maxx and supermarkets. Plans call for nine openings in the coming 18 months. Expansion will take place in the existing markets. Leases running 10 years are typical. Theisen Supply Co. General Merchandise The 11-unit chain operates locations in IA. The general merchandise stores occupy spaces of 25,000 sq.ft. in freestanding facilities. Preferred co-tenants include Kmart, Wal*Mart and supermarkets. Plans call for one opening in the coming 18 months. Expansion will take place in the existing market. Leases running five to ten years are typical. Hair Cuttery Hair Salon The 750-unit chain operates locations in DE, FL, GA, IL, IN, MD, NJ, NC, PA, SC, VA, WV, WI and Washington, D.C. The hair salons occupy spaces of 1,200 sq.ft. in strip centers. Preferred anchors include supermarkets. Plans call for 100 openings in the coming 18 months. Expansion will take place in the existing markets. Leases running five years, with a five-year option, are typical. Shimoni Sterling Silver Jewelry The eight-unit chain (two stores, six pushcarts) operates locations in CA. The stores, selling sterling silver jewelry, occupy spaces of 600 sq.ft. in regional malls and entertainment centers. Plans call for two openings in the coming 18 months. Expansion will take place in CA and Las Vegas, NV. Leases running three to five years are typical. Pet Supermarket Pet Supplies The 70-unit chain operates locations in CA, FL, NV and NC. The pet supply stores occupy spaces of 4,500 sq.ft. to 12,000 sq.ft. in freestanding facilities, power and strip centers. Plans call for 20 openings in the coming 18 months. Expansion will take place in AL, northern CA, FL, GA, NC, SC and VA. Leases running five years, with options, are typical. Mail Boxes Etc. USA, Inc. Service The 3,300-unit chain operates locations nationwide. The stores, offering business services, occupy spaces of 1,200 sq.ft. to 1,800 sq.ft. in downtown store fronts and strip centers. Preferred anchors include drug stores and supermarkets. Plans call for at least 300 openings in the coming 18 months. Expansion will take place nationwide. Preferred demographics include a population of 20,000 within three miles earning $40,000 as the average income. Leases running five years are typical and the company is franchising. Travel Network Ltd. Specialty The 425-unit chain operates locations nationwide. The travel agencies occupy spaces of 400 sq.ft. to 1,000 sq.ft. in regional malls and strip centers. Preferred anchors include Wal*Mart, department stores and supermarkets. Plans call for as many as 75 openings in the coming 18 months. Expansion will take place nationwide. The company is franchising. Sedano’s Supermarkets, Inc. Supermarket The 34-unit chain operates locations in FL. The supermarkets occupy spaces of 20,000 sq.ft. to 40,000 sq.ft. in freestanding facilities and strip centers. Plans call for as many as six openings in the coming 18 months. Expansion will take place in Southern FL. The company cites Publix and Winn-Dixie as competition. Town & Country Super Markets, Inc. Supermarket The 47-unit chain operates locations in AR, KY, MO and TN. The supermarkets occupy spaces of 15,000 sq.ft. to 25,000 sq.ft. in freestanding facilities and strip centers. Growth opportunities are sought in the existing markets. Winn-Dixie Stores, Inc. Supermarket The 1,200-unit chain operates locations in the Sun Belt region. The supermarkets occupy spaces of 45,000 sq.ft. to 60,000 sq.ft. in freestanding facilities. Plans call for 150 openings in the coming 18 months. Expansion will take place in the existing market. Preferred demographics include a population of 30,000 within two miles earning $30,000 as the average income. Leases running 20 years are typical. Who’s Opening & Where Wal*Mart (501-273-4000) recently opened a Supercenter in York, SC. The company also recently opened a 40,000 sq.ft. Wal*Mart Neighborhood Market in Bentonville, AR. The test store is a grocery/pharmacy unit being aimed at customers who live between Supercenters. Publix Super Market (941-688-1188) plans to open a 27,887 sq.ft. supermarket at Town Center at Saint Johns in St. Johns County, FL during 2000. Von Maur (319-388-2200) recently opened a 105,000 sq.ft. department store at Castleton Square Mall in Indianapolis, IN and a 125,000 sq.ft. store at Greenwood Park Mall in Greenwood, IN. The stores are both former Montgomery Ward spaces. The stores also mark the company’s initial entry into IN. Prior to the opening of these two stores, the company operated 12 stores in IL, IA and NE. Talbots (617-749-7600) plans to open a 4,300 sq.ft. store at Murraywood Centre in Irmo, SC during Spring 1999. Children’s Orchard (734-994-9199) recently opened franchised kids resale stores in Grosse Pointe, MI; Kansas City, KS; Virginia Beach, VA; Fort Wayne, IN; Raleigh, NC; Lindenhurst, NY and Albuquerque, NM. Additional stores are being planned for Monroe, LA; Jacksonville, FL; El Paso, TX; Olathe, KS; Charlotte, NC; Hartford, CT and Rochester, MI. The company, which operates 82 franchised stores in 24 states, expects to hit the 100 franchised-store mark during the first quarter of 1999. ShopKo Stores, Inc. (920-429-7234) plans to open a 105,000 sq.ft. store at Family Center at Meridian in Meridian, ID; an 81,000 sq.ft. store at Lantern Park Plaza in Coralville, IA and a 90,000 sq.ft. store at East Pointe Center in Rhinelander, WI during 1999. Foreman Mills (609-486-0903) plans to open a 50,000 sq.ft. family apparel store at Capitol Plaza in Ewing, NJ this month. It will be the chain’s 10th unit in the DE, NJ and PA markets. The Disney Store, Inc. (818-265-3320) plans to open a 7,000 sq.ft. store on North Michigan Avenue in downtown Chicago, IL during Fall 1999. Food Lion, Inc. (704-633-8250) plans to open 80 new supermarkets during the coming year. Seventy-three of the new stores will operate under the Food Lion name and seven will operate under the Kash ‘n Karry name in FL. Tandycrafts, Inc. (817-551-9600) recently launched a new concept store called Craft Your World at a renovated 3,000 sq.ft. former Tandy Leather Store at Medallion Shopping Center in Plano, TX. The company’s new retail concept is designed to provide consumers with a broader array of unique specialty crafts and gifts than is available in the company’s traditional stores. Customers can either buy a gift with handmade flavor, or buy the craft components to make the gift themselves. The company plans to evaluate the concept for several months before making a decision on further expansion. The company currently operates 122 company-owned stores in 41 states and another 100 authorized dealers worldwide. Walgreen Co. (847-940-2500) plans to open a 14,000 sq.ft. drug store in Rock Hill, SC during February 1999. The company is scouting the area for a second location. In addition, the company recently opened a drug store on the south side of Pueblo, CO and is planning to develop a unit on the north side of the city next year. The company also announced that it plans to re-enter the Atlanta, GA market with at least 15 stores, although possible sites have not been identified. The company left the Atlanta market in 1972 when it sold its stores to Eckerd Drug. Walgreens will face tough competition from CVS, which has more than 200 stores in the area and Eckerd, which has more than 150 stores in the area. Kinko’s (805-652-4000) plans to open a 6,700 sq.ft. store at Four Congress Park Centre in Sarasota Springs, NY during Winter. The store will be open 24 hours a day. Devold (612-509-0709), a manufacturer of authentic handcrafted Norwegian wool sweaters, recently opened its first U.S. located factory outlet store, a 2,160 sq.ft. unit, at Medford Outlet Center in Medford, MN. A&W Restaurants, Inc. (313-462-0029) and the Morongo Band of Mission Indians, plan to build a 2,000 sq.ft. restaurant on the Morongo Reservation near Palm Springs, CA. The unit, which will be open 24 hours a day, seven days a week, is expected to open this month. OfficeMax (216-921-6900) plans to open a 23,500 sq.ft. store in Orangeburg, SC during Spring 1999. MARS (954-938-0526) plans to open a music superstore in Springfield, VA during Fall. Morton’s Restaurant Group (516-627-1515) is rumored to be scouting downtown Indianapolis, IN for a site to locate a Morton’s of Chicago steakhouse restaurant. Circuit City Stores (804-527-4000) recently opened a 40,000 sq.ft. store at the corner of 14th and Broadway in Manhattan, NY. It is the first of two planned units for Manhattan. Shells Seafood Restaurants, Inc. (813-961-0944) recently opened a restaurant in Bloomington, IL, its second Chicago-area unit. The company is planning to open restaurants in Carpentersville and Oakbrook Terrace, IL before the end of the year. Step2, Inc. (330-656-0440), manufacturer of toy and home products, recently opened its first retail store, a 5,200 sq.ft. unit, in Mayfield Heights, OH and is looking to open three additional stores in OH and PA during 1999. The company decided to open its own stores after experiencing frustration at bringing its products to market through traditional retailers such as Target, Wal*Mart and Sears. Exclusives Keen Realty Consultants, Inc. (516-482-2700) has been retained by Strauss Discount Auto to dispose of 17 former auto parts store leases in CT, MA, NJ and NY. The stores range in size from 7,500 sq.ft. to 19,600 sq.ft. Litvin/LaRue/Greenfield Commercial Real Estate (630-773-7500) has been selected by Dollar Junction as its exclusive representative in the Chicago, IL market. Dollar Junction plans to open as many as 30 stores in the market within the coming three years. Representing Dollar Junction, Litvin/LaRue/Greenfield has negotiated leases for a 16,500 sq.ft. store at Villa DuPage Shopping Center in Villa Park, IL and for a 17,525 sq.ft. store on North Central Avenue in Chicago, IL. GMH Realty, Inc. (610-337-3370) has been named the exclusive leasing agent for Plainsboro Plaza in Plainsboro, NJ. The 207,968 sq.ft. project is anchored by SuperFresh, Caldor and CVS. Spaces of 3,850 sq.ft. and 5,000 sq.ft. are available for lease. Buyers & Sellers Metro Commercial Real Estate, Inc. brokered the sale of 15 acres of
land located at the intersection of Baltimore Pike and Route 41 in Avondale, PA. The
buyers, a joint venture between J. Loew & Associates and a private investor, plan to
develop an 80,000 sq.ft. shopping center, an assisted living complex and an office-flex
building on the site. Rosen Associates Management Corp. is in the market to acquire
neighborhood and community shopping centers nationwide. The company’s interests range
from complete redevelopments to stabilized investments. Syndicated Equities announces seven transactions totaling $35.5
million. The following properties, all long-term, triple-net-leased to major national
tenants, were purchased primarily by investors seeking to complete 1031 Exchanges. In
Chicago Heights, IL, a $12.5 million sale was consummated for a 101,400 sq.ft. property on
which Dominick’s Finer Foods holds a long-term triple-net lease. The property was
purchased by a group of 14 investors. The transaction was based on obtaining continuing
revenue from a 22-year triple net lease by Dominick’s. In Albuquerque, NM, a $4.789
million sales was consummated for a 15,930 sq.ft. retail property on which Walgreens holds
a long-term triple-net lease. The property was purchased by a Chicago area investor for
the purpose of completing a 1031 Exchange arising from the sale of an apartment complex.
In Evanston, IL, a $4.426 million sale was consummated for a 12,000 sq.ft. retail property
on which Walgreens holds a long-term triple-net lease. The property was purchased by a
Chicago area investor. In Carson City, NV, a $4.2 million sale was consummated for a
13,905 sq.ft. retail property on which Walgreens holds a long-term triple-net lease. The
property was purchased by an AZ-based investor for the purpose of completing a 1031
Exchange arising from the sale of an industrial warehouse. In Lewiston, ME, a $3.075
million sale was consummated for an 11,180 sq.ft. retail property on which Rite-Aid holds
a long-term triple-net lease. The property was purchased by a suburban Chicago family
trust in a 1031 Exchange for the purpose of deferring the capital gains tax arising from
the sale of vacant land in Buffalo Grove, IL. In Atlanta, GA, a $2.883 million sale was
consummated for a 10,908 sq.ft. retail property on which an Eckerds store holds a
long-term triple-net lease. The property was purchased by a family partnership for the
purpose of completing a 1031 Exchange arising from the sale of a hotel in California. In
Ruidoso, NM, a $3.72 million sales was consummated for a 15,930 sq.ft. retail property on
which a Walgreens holds a long-term triple-net lease. The property was purchased by a
Kansas City area investor for the purpose of diversifying his holdings from apartments to
less risk and management investor holdings. N.E. Cohen & Associates has the listing to sell Pioneer Plaza
in Arlington, TX. The 105,094 sq.ft. project is anchored by Winn-Dixie, Video Update and
Chuck E. Cheese. The asking price is $7.35 million, based on a 10% cap rate. Cohen and Company, Inc. Real Estate brokered the sale of Trolley
Station Shopping Center in Memphis, TN. The 167,000 sq.ft. project, which is located on a
16-acre outlot of the 1.1 million sq.ft. Mall of Memphis, is anchored by Toys ‘R Us,
Kids ‘R Us, OfficeMax and Just For Feet. The seller was Trolley Station, LLC and the
buyer was Price-Kimco REIT. Morton G. Thalhimer has the listing to sell Carytown Square in
Richmond, VA. The 29,232 sq.ft. mixed-use project is 99% leased. The asking price is $3.2
million and a $2.245 million loan is assumable. Sheldon-Gold Realty, Inc. is selling Krameria Plaza in Commerce
City, CO. The 93,959 sq.ft. project is anchored by EZ Pawn and Provenant Health. Expansion
of the project is possible. The asking price is $1.29 million. The company is also selling
Montclair Plaza in Denver, CO. The 28,500 sq.ft. project is anchored by Roses Cafe. Food Tenants Hungry for South Central Sites Luby’s Cafeterias, Inc. trades as Luby’s Cafeteria
at 229 locations in AR, AZ, FL, KS, LA, MO, MS, NM, OK, TN and TX. The cafeteria-style
restaurants occupy spaces of 8,200 sq.ft. to 8,500 sq.ft. in freestanding facilities and
power centers. Plans call for eight openings in the coming 18 months. Expansion will take
place in TX. Preferred demographics include a population of 50,000 within three miles
having a per capita income of $20,000. Leases running five years, with five options at
five years each, are typical. C.S.F. Franchising Group does business as Cafe Santa Fe
Southwest Restaurants at nine locations in AR and MO. The Southwestern/Mexican
restaurants occupy spaces of 3,500 sq.ft. to 5,500 sq.ft. in freestanding facilities,
outlet, power and strip centers. Preferred anchors include T.J. Maxx and Wal*Mart.
Plans call for as many as 15 openings in the coming 18 months. Expansion will take place
in AR, KS, MO and OK. Preferred demographics include a population of 25,000 within 15
miles earning $25,000 as the average income. Leases running 10 years are typical and the
company, which is franchising, cites On The Border, Don Pablo’s and El
Chico as competition. Kingfood Enterprises trades as El Chico at eight locations
in AR, LA, MO, OK and TX. The Mexican restaurants occupy spaces of 6,000 sq.ft. in
freestanding facilities and power centers. Preferred anchors include Wal*Mart.
Plans call for 10 openings in the coming 18 months. Expansion will take place in the
existing markets. Preferred demographics include a population of 20,000 within two miles
earning $20,000 as the average income. Leases running 25 years are typical and the company
cites Don Pablo’s as competition. Diedrich Coffee operates 36 locations in CA, CO and TX. The
restaurants occupy spaces of 1,500 sq.ft. to 2,000 sq.ft. in strip centers. Plans call for
as many as five openings in the coming 18 months. Expansion will take place in the
existing markets. Leases running five to ten years are typical and the company, which is
franchising, cites Starbucks and Caribou as competition. Bullets Corporation of America trades as Bullets Burgers and
Chicken & More at 30 locations in DE, GA, KY, MS, NV, NC and VA. The fast food
restaurants occupy spaces of 500 sq.ft. to 2,200 sq.ft. in freestanding facilities.
Preferred co-tenants include petroleum convenience stores. Plans call for 300 openings in
the coming 18 months. Expansion will take place in the Northwestern, Plain States,
Southeastern and Southwestern regions. Preferred demographics include a population of
10,000 within two miles earning $25,000 as the average income. Leases running 10 years are
typical and the company is franchising. Closings Boston Chicken, Inc.’s (303-384-5172) franchisee BC Northwest, L.P., recently closed 56 Boston Market restaurants in ID, OR and WA because of a lack of funds. In a statement, BC Northwest said, "With the announcement by Boston Chicken... that it was no longer able to provide financial assistance to BC Northwest under its convertible loan agreement, BC Northwest determined that the continued operation of these restaurants was impossible unless additional sources of financing were available. We earnestly sought this financing from other sources, but it is apparent that in this tight capital market, none is available. As a result, we unfortunately have to close the restaurants and lay off our employees." Inca Computer Co. (248-594-5252) recently closed six of its ten computer stores. Five of the closed stores are located in Southern CA and one near Chicago, IL. The company has also put on hold its plans to open stores in Detroit, Northville and Shelby Township, MI. The company cited a financial squeeze triggered by a slowing U.S. economy as the reason for the closures. Luby’s Cafeterias, Inc. (210-654-9000) recently closed its two restaurants in Wichita, KS. The company opened the units two years ago. |