34 – Disruptive Retail: Commodity Vs Specialty and How to Benefit From Modern Trends

Hello, and welcome to Episode 034 of the Corporate Real Estate Podcast, brought to you by LeaseSmart.com. Your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances.

Today Craig welcomes special guest Nick Egelanian with SiteWorks Retail. He is a Strategic Real Estate Consultant with offices in Annapolis, Maryland and London. This is a fascinating interview covering the history and future department stores. He looks at the big picture of what’s going on in the world today.

There is a new model of outlet center leading us away from typical malls. It has been successful in Boston and other locations and it is due to this Post Department Store Era we find ourselves in. Why is this happening? Well, if we look back to the 50s and 60s, the Department Store Era was born out of people needing to buy things daily at the general store. It affected our culture so much that even the roads were laid out for such purposes and that all worked very well. Building the foundation for malls and big box stores where low prices are king.

Fast forward to 2016 and today the department store industry does 72 billion in sales.
Target alone is a 75 billion dollar company. And, Walmart is 500 billion dollar company. The Retail delivery portion of Amazon is 85 billion. Each of these companies is exceeding the total volume done by all department stores. Nordstrom has not been adding net stores for 5 years now. In the last 2 years Nordstrom has closed 2 stores including in San Diego and Orlando. In the Wall Street Journal on July 11th, there was an article about this very mall.

Do department stores have any hope to evolve and survive? Nick Egelanian believes their future is dependent on them repurposing. He predicts that we’ll go from 3000 to only about 200 malls left in the end. Department stores will have little to do with malls’ sticking around. In the 90s, a mall’s ability to get a Nordstrom was the key factor to their success, but not any more. What matters now is experience. People want the experience of eating good food, buying clothes and finding entertainment. Malls are going to have to refocus around “Experience Stores.” Thanks for tuning in!

Links:
For more information, be sure to visit LeaseSmart.com

Nick Egelanian may be reached at:
(301) 922-4466
siteworksretail (DOT) com

33 – Leasing Retail? The Unique Elements You Need to Know

Welcome to Episode 33 of the Corporate Real Estate Podcast, brought to you by LeaseSmart.com. Your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances.

Today we’re talking about Retail Leases, which can be very special. There are some terms that are used in Retail what go above and beyond the terms used in Commercial Leases or Office Leases.

One thing that you need to be aware of is that you might be charged for something called “percentage of sales.” So, if your % isn’t high you might get kicked out ultimately.

Also, it is pretty typical for a shopping center type of retail lease to use a base rent and then a pro-rata share of building expenses. So, who is responsible for the expenses of the property. Will the landlord be charging you your share of the CAM charges?

Let’s be sure to inquire as to whether construction is in the horizon. What do the traffic patterns tend to be like at all times of day? Sure, your customers can get in your retail center, but if they can’t get out and turn the way they need to go at certain times of day then the typical customer will go somewhere else. Look at curb cuts, median cuts “no u-turn” signs and traffic lights.

If you are trying to decide between renting retail space in a small strip mall or a larger shopping center remember that visibility might be more important than community. If you can’t be seen in the larger community it might not be worth the higher premium, whereas being prominently located in the smaller pond is a bonus.

Pull reports of drive times and radius levels. Ask yourself, “Will there be enough parking?” Thank you Craig for giving us so much good information to consider!

Links:
For more information, be sure to visit LeaseSmart.com

If you would like any free Space Worksheets, Letters of Intent or Proposals then Craig Melby is more than happy to share the documents that he uses. Just e-mail him at info@leasesmart.com.

32 – Leasing Office? The Unique Elements You Need to Know

Welcome to Episode 32 of the Corporate Real Estate Podcast, brought to you by LeaseSmart.com. Your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances.

Today we’re talking about leasing office space. If you are considering leasing in a high rise you’ll probably be dealing with a full service lease, where all of your services are included: your janitorial, your electric, etc. And, in terms of the size of the space that your renting, the portion that is actual walkable space is much smaller than what you’re paying for. That’s called a “loss factor.” The loss factor is your share of the elevators, the hallways and the lobby, etc. It could be 20% of the space you think you’re renting. Though, not all high rise situations will charge you the loss factor, so be sure to ask!

When you are picking an office space, high on your consideration list should be the amenities that will help you retain your employees. Acquiring and training good employees is one of your biggest investments, so keeping them is very important financially and integrally. If you can find a space that they are excited or that fits their lifestyle, they’ll be more likely to stay. For example, if childcare is offered in your building and your employees use it, they will think twice about leaving working with you.

Links:
For more information, be sure to visit LeaseSmart.com

If you would like any free Space Worksheets, Letters of Intent or Proposals then Craig Melby is more than happy to share the documents that he uses. Just e-mail him at info@leasesmart.com.

31 – How to Negotiate a Lease A-Z

Welcome to Episode 031 of the Corporate Real Estate Podcast, brought to you by LeaseSmart.com. Your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances.

If you would like any free Space Worksheets, letters of intent or proposals then Craig Melby is more than happy to share the documents that he uses. Just e-mail him at info@leasesmart.com.

Perhaps one of the first steps in negotiating a commercial lease is that you need to know what kind of space you need. Once you have that figured out then the second step is to keep in mind that there is a difference between the asking price and the renting rate. When you are talking to the landlord be sure to ask what the last few renting rates were and follow up with questions about the TIA: the Tenant Improvement Allowance, because the kind of TIA that they offer will factor in heavily as you consider the renting rate.

Be mindful of the conflict of interest. The broker of the seller is there to lease that space, so they might not be able to tell you about another space that they know of that would be a better fit for you. If you have a leasing agent of your own, they will be able to look out for your interests and your interests alone.

OK, so let’s say it’s time to make an offer. Craig Melby likes to make it verbally first so he can read their body language before he sends it over in writing. He typically says something like, “Your property would be our 1st choice if…” That is the truest way to communicate your intentions while still maintaining some ground.

If he is worried about offending the seller with a low offer he says, “Look, I don’t know what it’s worth, but this is what I can pay. Let me know.”

The time of the written offer is when you nail down a few main lease concerns like exclusivity, non-competes, the anchor tenant in the building and rent commencement. These things should be out on the table and not kept quiet until the signing.

As you get your attorney involved you need to manage the process. Don’t give up your power. Use a Real Estate Attorney specifically and don’t let the attorney hold up or ruin the deal.

Links:
For more information, be sure to visit LeaseSmart.com

30 – Retirement On The Horizon? You NEED These Three Key Lease Terms

Hello, and welcome to Episode 030 of the Corporate Real Estate Podcast, brought to you by LeaseSmart.com. Your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances.

The Corporate Real Estate Podcast strives to make businesses more profitable through wise site selection and lease negotiations. Joining in Episode 030 is co-host Natalie Pyles and today Craig talks about planning for retirement far in advance. First, he advices you to get a liberal assignment clause so that you can sell your business to the person you see most fit. Second, don’t be on a personal guarantee if you are approaching retirement. Make sure it expires before the reassignment takes place so you aren’t still on the hook. And third, secure good terms for your future owner/buyer so that the sale of your company has added value. Thanks for listening! Continue reading “30 – Retirement On The Horizon? You NEED These Three Key Lease Terms”