Although this is 1 year old, it is still an interesting listen into the wonderful world of retail and politics.
Although this is 1 year old, it is still an interesting listen into the wonderful world of retail and politics.
You’ve created your merchandising plan with the perfect tenant mix. You’ve honed your development pro forma to pencil. Your team is out on the street chasing down the deals that you need to meet or exceed your vision and financial goals. We’re done – right?
Retail development is a fine balance of art and science. The next step is to have a clear process that allows your team to deliver the many, many promises that you have or will be making to your retail tenants. The 5 Phases of Retail Tenant Delivery below provide the battle tested framework for successful and happy merchants at your shopping center.
Phase 01 – Leasing Support
We all know that time kills deals, so having the support needed to answer Tenant inquiries quickly and accurately is invaluable. The retail delivery manager (aka Tenant Manager, Tenant Coordinator) acts as concierge and liaison (that’s a lot of French) by setting up the Design Criteria, tracking and reporting systems, and answering questions regarding the premises to facilitate design and construction. Knowing the proper amount of electrical capacity required by a Tenant and not delivering more than is needed can frequently save $20,000+.
Phase 02 – Design & Plan Review
The devil is in the details and it is imperative to double check on paper that which is being planned. With great team work and collaboration, both the Tenant and Landlord can meet and exceed the design standards set in the Design Criteria Manual. Great design maximizes quality and constructability while minimizing cost. It is SOOOO much easier to move a wall on paper versus one that has already been installed. This is the time to measure twice because you can only cut once.
Phase 03 – Landlord Construction
There are 24 traditional Landlord work items that can be required for Tenant delivery. The construction lease exhibit (Exhibit B or C) defines which of those are required to be delivered by the Landlord for each Tenant. Tracking, designing, coordinating, bidding, contracting, installing and then delivering these items are critical for Tenant premises acceptance and space turn-over.
Phase 04 – Tenant Improvement
Landlord turn-over and Tenant premises acceptance is one of the most important milestones in the process. However, this is where the fun really starts. Tenant contractor check-in, daily coordination, material delivery and staging, scheduling municipal inspections, merchandising and all other tenant fit-out activities are all critical tasks required to get the Tenant open and ready for business. This is as much art as it is a science and great communication, coordination and negotiation skills can make the difference whether a store opens its doors and rings its registers.
Phase 05 – Close-out
This often overlooked phase is critical because it verifies and validates that all parties have lived up to their construction obligations. While creating the punchlist is the obvious activity, Tenants should provide to the Landlord all required documentation including the certificate of occupancy, final lien waivers, as-built drawings, schedule of construction values, and all other documentation required to satisfy the release of Tenant contractor security deposits and Tenant Allowances. This final administration phase makes the commencement of lease administration possible and marks a successful fit-out.
Follow this time and battle tested sequence for retail tenant delivery and you will be insured that you deliver all of your promises while getting more of your Tenants open on time.
Ok, ok, we know the internet is here already. What we are not paying enough attention to is how it has/will 1) eaten our lunch and 2) create opportunity for traditional bricks and mortar retailers. If you accept premise number one, then you will be free to explore, leverage and capitalize on concept number two. Below are five opportunities worth exploring for centers to be a force to be reckoned with in the future.
1. Have your Center be the Center
IM, chat, hangouts are cool, but they just don’t compare to being together. Actually, together. Owner’s, operators and managers of shopping centers have the opportunity to roll back the clock a little and get retro-cool by being the CENTER (think Rouse’s original vision for Columbia, MD). Municipalities, schools and churches have forfeited this responsibility (right, wrong or otherwise) and there is a huge opportunity for the center, the heart of the community, to be, once again, the shopping center. The internet has a long way to go to crack this code; no one else seems to have the resources or desire. Retail can easily grab the wheel and steer the ship. Create the backdrop for the experiences worth sharing on Snapchat, Instagram and Vine.
2. Turn your Center into a Playground
The buzz for the last years has been about creating entertainment centers to stay relevant and ahead of the curve. Simply put, if I can get it at home tomorrow, you need to give me a compelling reason to get it somewhere else today. This is why experience is so important. Frankly it is vital for survival. Shopping is fun, other things can be more fun. For some dancing is the answer (me included – TMI). Crossing the street (or more accurately waiting) has never been as much fun.
This idea gets you on so many levels. Keep people safe. Keep them entertained. Slow them down. Allow people to contribute. Make everyone involved feel like a star! Whether it is a billboard, a fountain, a play area, a performance or a show – keep people longer. Let them linger.
Like it or hate it Vegas has this down like no other. The Bellagio’s dancing fountains. The Freemont Experience light show and canopy. The Mirage’s pirate thing – whatever that is. The street performers at the corner of Flamingo Road and Las Vegas Blvd. near Bally’s. All get people not only to slow down, but to queue up and wait.
Play videos on LCD screens on green walls. Have local performers showcase their skills. Create a playground, for both kids AND adults.
3. Amusement, Elite Status and Membership Clubs
While recently traveling with my family to Orlando, we had the privilege to experience the Wizarding World of Harry Potter at Universal Orlando. All pun intended, it was truly … well .. magical. As Ron Weasley would have said, the “brilliant” thing about this all was that not only did I shell out more than $300/day simply to enter the premises, but dropped just about as much in the retail stores on wands and maps and 9 pound chocolate frogs. Furthermore, there aren’t even that many rides (6 to be exact including the train and Diagon Alley). I essentially paid Universal (and J.K. Rowling) for the privilege to SHOP. The dirty little secret is that I did so willingly! It was amazing. If I could afford it I would go back in a second.
We can learn a lot from the theme parks at Disney, Universal, and others. Amusement can be worth the price of admission. Let’s make our centers worth visiting even if you NEVER step foot in a “shop”. The Landlord’s job is to get shoppers on the premises. This is one amazing opportunity for study.
Realizing that every center can’t (and probably shouldn’t) be an amusement park, make sure that yours is the most envied of its class. If you are a pure convenience center, make sure that the parking is easiest, that the building is clean, that trash is properly put away. Look for opportunities to make it even MORE convenient; add an ATM, have a pick-up and drop-off zone, offer wi-fi in the parking lot or anything else that may make running an errand easier and more enjoyable.
EVERYONE loves to be at the front of the line, on the right side of the velvet rope or receiving perks. Additionally, if their is a strong sense of perceived value for the services, people will even pay for the privilege.
One idea is to follow the highly enviable Costco model – charge a membership subscription. According to the Wall Street Journal, in one quarter of 2014, Costco made $784 million dollars from membership revenue. While this only represents about 5% of their total sales – this is nearly pure profit. Why not create a zone in the center that is for members only and that allows customers to get other perks such as priority and/or free parking, baby sitting, express check-out or other low-cost benefits. In a podcast for NPR’s PlanetMoney program, Gary W. Loveman, chairman, president and CEO of Caesars Entertainment Corp., stated that one of the keys to their Total Rewards program was to deliver perks with high perceived value, but with little or no cost. He stated that he loved velvet ropes, because it is nearly free to create VIP areas and then access.
Try developing a simple loyalty plan for your center (or better yet entire brand) similar to the one developed by the company Belly. You get points for merely showing up! Maybe more points buy doing things (scavenger hunts, participating in events, tweeting about the center). Even more when they buy stuff. By embracing with both hands the mobile and beacon technologies available today, you can easily reward your loyal customers by being the place to be.
4. The Internet of Things
Wearable technologies are big buzz for 2015. The Apple Watch (no longer iWatch by the way) is set to release on April 24th and will be leading the charge for not only all things wearable, but all things internet. Be prepared for the Jetson’s house to become a near reality and soon. According to Cisco’s Internet Business Solutions Group (IBSG), they predict some 25 billion devices will be connected by 2015, and 50 billion by 2020. This will change everything that we do, the way that we do it and will present unimaginable opportunities to change the ways that we will want to see it, experience it and buy it.
If we change our perspective just a little bit, we can 1) overcome our fear of show rooming and 2) break down the barriers of the traditional retail threshold. The common area can be leveraged as a mutual platform for intentional display and product performance. The shopping center has so many advantages over every other class of real estate and should be the very first space to completely embrace the internet of things. Interactive media boards to check your Facebook and check in on your foursquare accounts. Parking retrieval apps. Interactive vending machines/kiosks that create custom items. The more that we accept that
5. Smaller, shorter, partnered, omni-everything
The shopping center by creation was the second great evolution of the omni-channel experience (department stores laying claim to the first place spot). It was the one place where you could get and do a lot of different stuff with a single trip. Facts are facts and most retailers are shrinking their footprints. They are evolving to meet their customers’ needs, but the centers are reacting to these needs rather than looking for new opportunities. Fundamentally this means that centers need to find additional retailers to fill what will be a gap.
A creative new method for investment and financing will be required to take advantage of these opportunities. If not, the cool new restaurants and retailers will choose some other location than your center. We’ll be stuck with test-tube corporate concepts. Shorter term leases coupled with an online presence can be one way to capture new concepts. With a more collaborative and less “collect the rent” mentality, centers can actually expand their traditional store selections by incubating new online only concepts. This seems like sacrilege, but it if we keep relying on others to take all the risk, we will be left with no reward.
Take a look at two of the most talked about brands that have come from clicks to bricks: Warby Parker and Bonobos. Both of the men’s focused retailers proved their concept “on the line” and have become upscale darlings. Bonobos operates out of 900 sf+/- and creates an experience for having custom wearables chosen and measured in store. Your final garment is then delivered to your house in a couple of days. Warby Parker has changed the way we purchase eyeglasses. They have hip traditional frames which are fun and affordable sent to your house to try on for free. Just choose the one you like and tell them your prescription – glasses arrive in a couple of days. The key here is that they tried their new business out WITHOUT paying the 8 – 12% occupancy cost typical of having a location in the mall. When they were ready, they chose to pay for the advantages of a physical locale.
Using this as an example then expand even more deeply with intentional pop-up/short term tenants. Put together a small area of new concepts only (good place for velvet rope access). Call it designer market. Pick out the freshest styles and make everyone else envious. This becomes YOUR minor league farm team for the seasons to come. Get something for the space while you are raising your crop. Not all will work, but the more that Owners and Tenants collaborate, on nearly everything moving forward, the better it will be for everyone.
Retail is changing, just like it always has. Is your center going to be the one that gets outpaced? Be bold and take advantage of the opportunities that all centers have at their disposal to steer your center for lasting success.
Tenant Allowance should be inversely proportional to Landlord Work. Specifically if the LL provides more work, Tenant Allowance should be lowered. Below please find a graphic which illustrates the range of values based upon real industry averages.
We are looking for the ultimate second in command to join our young and expanding real estate technology and consultancy firm.
If you are the type of person that wants to:
1) learn the retail real estate industry from the ground up;
2) leverage your creativity and design skills to solve common industry challenges;
3) organize and take projects from concept to implementation (or abandonment if appropriate);
4) take initiative and have a voice;
5) help a small firm grow and become an influential company;
then this is the position custom made for you and we need to talk.
Responsibilities would include, but certainly not be limited to:
A) Project management for the production and deployment of our custom digital tools
B) Acting as primary client contact for those who have purchased our services
C) Creating and meeting deadlines for the production of tools
D) Training customers on how to use our tools
E) Supporting principal to produce client deliverables including reports, exhibits, lease abstracts, lease plans, and digital tracking systems
F) Providing design input and review for retail Tenant store facade, signage and interior design
G) Reviewing base building and retail tenant drawings for conformance with Landlord design criteria
H) Assisting with corporate administration including tracking systems for employee related production, contact management, digital marketing, presentation support for CEO, and anything else that we create.
We make tools and provide services to help others become better artists at their craft.
Our clients choose us because we are innovative, responsive, personal and accessible. We make their jobs and lives easier by solving common problems that currently bog them down and detract from their core value at their organization. We make their jobs and lives easier and more fun.
You will get to work on numerous commercial and mixed-use retail projects across North America based out of our Chicago locale. From small boutique single Tenant projects to the largest regional shopping center Owners, we assist our clients by providing technology tools and consultancy services that accelerate and support the development, leasing, design, tenant delivery and construction for retail projects.
Our corporate structure is simple and their are no corporate politics to navigate (regrettably there is also no softball league or fantasy football league either – yet). We expect our team to be able to work independently and remotely (home, road, airport, Starbuck’s) to start and complete tasks as required. We have, but often times do not use our Bucktown/Wicker Park office as clients and projects require travel to their sites or offices.
Growth potential is unlimited and we are looking for the right candidate to help us expand to not only meet but create our next opportunities.
Please place the following into the subject line of your response: “work.shop – I am the one” then your First & Last name.
Additionally, any graphics, portfolio, web/blog design or posts. Show us your skills!
Qualifications / Skills:
We value, celebrate and require the following personal attributes:
1) Initiative – we set the direction
2) Collaboration – we can’t do it alone
3) Integrity – we must never compromise quality
4) Honesty – we have no greater value
5) Responsibility – we lead by example
6) Accomplishment – we are expected to get it done
Without the natural talents above, success in this position will be impossible.
Candidates must have the following skills:
1) Fluency with MS Office (Word, Excel, Powerpoint)
2) Fluency with digital image manipulation (resizing, cutting, cropping)
3) Fluency with Adobe CS (Illustrator, InDesign, PhotoShop)
4) Proficiency with all web browsers (IE, Firefox, Safari, Chrome)
5) Proficiency with social media platforms (twitter, linkedin)
6) Familiarity with WordPress
7) Familiarity with Prezi
8) Familiarity with MailChimp
9) Familiarity with Google Hangouts / Skype / FaceTime
Ideal, but not essential:
4) Fluency in Spanish
Negotiable, but in all candor, what we cannot afford in financial compensation (today), we can more than make up for in opportunity, experience, flexibility and lifestyle. You will be part of that solution.
Please reach out directly to Michael via email at email@example.com with your qualifications and why you think that you are the one to help us get to the next level. Cheers!
Bucket list #12 – check. Work with street artists to create something inspiring.
I love street art. Murals, paste-ups, slap-ups, stickers, bombs – I love it all. This week we had a chance to use our skills as retail real estate pros to collaborate with two local artist, JC Rivera (@JcRivera) and Sentrock (@sentrock), and our client, Akara Partners, to give life to a dying wall. And through an amazing effort of teamwork, I am so fortunate to have realized one of my dreams. I’ll never forget this week and my coolest day.
While on my way home from an industry event, I drove past the project site located at 500 N Milwaukee Avenue. For years, this 6-corners urban location has been a magnet for high quality, clever and exceptionally creative street art. With demolition of the existing dilapidated grey buildings, as always, I felt a sense of excitement at what will be and mourning for that which was. Most particularly one of my favorite paste-up locales in the Chicago. However, this evening, as room was being made for Akara’s new mixed-use development, I was presented with a vision.
After the days work had been completed, an older, possibly even entombed, bubble letter red and white tag on the eastern side of one of the middle buildings was revealed. This relic called to me and I was struck with a grand and wildly implausible idea: we could create an artistic phoenix on the walls of the building before it was razed and turned to ash.
I drove home excitedly and couldn’t wait to send out an email to the Owner. After pitching the idea the Akara’s Senior Vice President – Acquisitions & Development, Stephen Bus, I was green-lighted to reach out to some of my favorite street artists in the city. While I could only offer access, permission and one heck of a canvass, two visionary artists quickly saw the potential and replied to my offer.
Sentrock (@sentrock), a prolific muralist whose symbolic works focus on human struggles, minimization of races, classes and individuals, and ultimately the empowerment and transcendence to rise above and overcome, was the first to respond looking for deets. Following shortly thereafter was JC Rivera (@JcRivera), a visual artist ubiquitously known for his popular The Bear Champ character. The project was growing legs. This thing was actually happening.
Knowing that the two had collaborated previously, made this an opportunity of a lifetime and over the next week the Ownership team and artists stitched together the logistics and details required to take this great idea to reality. We cleared with Ownership. We informed the Alderman. We rented equipment. We delivered lifts. We opened gates. We coordinated with our marketing guru, Carmen Maugeri of Mauge, Inc. We showed up Saturday morning.
(thanks to wiredforlego)
Below you can see how the transformation came to be.
What was created … well, I believe that it clearly speaks for itself.
What makes this so bitter sweet is that it will end. Like most pieces of street art it will disintegrate. The wall will come down and we all hope to be there when it does. Old will make room for new. And it is my belief, that while difficult, we are and will continue to be better off for it.
On March 10, 2015, work.shop CEO, Michael Greeby, instructed Managing The Tenant Coordination Process class with Ben Wood, Vice President of The Greeby Companies, Inc., at the International Council of Shopping Center’s (ICSC) University of Shopping Centers at Penn’s Wharton School in Philadelphia. More than 20 industry professionals came from across the country to attend this special 3 hour course. Nine key topics were covered including, the basics of retail and development, the job and its requirements, the lease and its many important provisions and how to properly set up and use systems and tracking to accelerate the process.
Michael and Ben’s spirited and energized presentation style had them “passing the mic” back and forth while also incorporating real world exercises and hands-on learning by the attendees. “The retail delivery process has two main goals: to deliver promises and get tenants open” said Michael. “The course breaks down the complicated process and explains exactly how to accomplish these goals. I look forward to the opportunity to teach again.”
On what is becoming all too typical a cold winter night a couple of weeks ago in Chicago, work.shop CEO, Michael Greeby, attended BuiltWorlds Demo Night (@builtworlds #bwdemonight). This unique event allowed participants to touch, feel and try a number of cutting edge products in the fields of virtual reality, wearable technology, digital scanning, 3D printing, mobile applications, and Internet of Things (IoT).
The evening started out with a mixer and idea exchange where attendees could meet the sponsors and personally experience their technologies. Spirited discussions among the group centered on how technology is and will impact the built environment.
Kevin Carr of MasterGraphics (@mgitweets) and his team scanned the BuiltWorlds headquarters as well as showcased their 3D printing abilities by displaying gorgeous architectural models and live printing a modern styled vase.
Amr Thameen (@AmrThameen) of irisVR (@vrviz) let me try on their Occulus Rift VR glasses to walk through a SketchUp model which they converted with a drag and a drop into their software. Nothing cooler than a real me in a virtual model of the famous Eames House. Creating a new store prototype, shopping center or renovation will never be the same once this technology becomes widely adopted and it should be. Soon.
Josh Golden (@jgolden3), CEO of tableXI (@tablexi) spoke about applying software’s Agile Design Process to the design and construction industry. His hack everything philosophy is starting to gain tracking in the industry. I had presented similar concepts from +rehabstudios (@rehabstudios) at my 12 Ideas in 60 Minutes presentation at ICSC CenterBuild 2014. Coincidentally enough, industry leading retail MEP engineers, Larson Binkley, visited work.shop to show how they are deploying this philosophy to their design process.
Watch the video for those who missed the event.
Bonus: If you are the first post the correct number of work.shop sightings in the video – I’ll give you something cool.
In December, Michael Greeby and Dean Pritchard of WLS Lighting gave their 12 Ideas in 60 Minutes presentation at ICSC’s premier development, design and construction conference – CenterBuild 2014. In an earlier post, we shared the slideshow, but thanks to @ICSC, you can now watch the entire presentation (or just skip around to the things you like) with audio. We hope to keep the conversation going and look forward to your comments. Enjoy!
We wish you a Merry and Happy Christmas, Hanukkah, Kwanzaa, Pancha Ganapati, Newtonmas and/or Festivus. Thanks for sharing the year together. We look forward to sharing 2015 with our clients, advisors, friends, and colleagues.