Commercial Property Herald

Industrial Property Improvement Portend Better Times for #CRE?

For over 4 years, I have been looking for a sign of better economic times.  I have seen little blips and blurps at times but nothing really solid leading me to believe that there was light at the end of the tunnel,..........until now.

I don't want to get too carried away with this and truthfully, I have been seeing improvements and solidification in the industrial an warehousing market but the emprovement in 2011 is significant.  

The LA Times reports that Industrial property leases jumped nationally in 2011. I think a good part of the improvement is in the pricing.  But in this case, I believe that it truly is a philosophy of "lease it and they will come."  I suspect that this trend portends more employment.  Mind you that I do not see a sky rocket of good times but I do see signs of some improvement here.

Are Pop Up Stores a new Trend Outside the United States?

In a recent discussion in the International Council of Shopping Centers group in LinkedIn, Rose Nuqui commented that:

Pop up spaces is a trend that isn't really new. Most malls in the Philippines now include them as early as the planning stage. Certain areas in the mall are earmarked for Pop up stores to create revenue streams. Though the tenants are temporary ones (tenancy may be from 3 to 6 months to a year), these spaces become incubation for small entrepreneurs who wanted to get their feet wet by trying out a small space that do not require big investments. On the part of the mall, these areas are a source of creative offerings to its customers, specially on retail occasions like Valentines, Easter, Mothers Day, Halloween, Christmas. And a potential source for new ideas. 

There are also certain areas which are created as a space for temporary retail, until a more permanent retailer/store comes in. In the mall that i work for , we created a chunk of space for small furniture retailers. And an area which was supposed to be just a filler became a permanent space for a collective group of Pearl and Precious Stones and Fashion Accessories. Both spaces became a destination for bargain hunters of furniture and the pearl village has become a great attraction for locals and tourists as well.

I think that Rose is correct.  It seems that Pop Up Stores are a much more "mature" concept in countries other than the United States.  London has embraced the concept and is expanding the definition.  But than again so is New York.

Seasonal pop ups have been around as long as beach goers went to the beach during the summer and stayed away in the winter.  Think about how well you could sell ice cream in Atlantic City in the 1920's in the winter.  She's right, these are not really original concepts, but maybe what we are seeing now is a more creative way of thinking about these temporary stores in a more permanent fashion.

Shipping Container Stores in Vacant Lots as Pop Up Stores

Earlier this week, we aired a show on CRE Radio on the topic of Pop Up Stores with Myriam Beaugé of Tactics Magazine & Shopping Center Weekly, Christina Norsig from Popupinsider.com and Harold Tolchinsky a partner with the law firm of Cole Shotz. The topic of show was the growing trend of Pop Up stores and malls.  As part of the conversation, there was mention of a BoxPark, a new "Pop Up Mall" in the East London that is built with shipping containers.  

It was a very dynamic and interesting show with articulate and knowledgeable guests.  If you want to hear the podcast in its entirety, click here to listen or download the MP3 or iTunes version.

This was the first time that I heard of the use of shipping containers for pop ups.  Upon further thought though, it does make sense.  If you can overcome code and safety issues, it might be a particularly good and inexpensive and "green" construction method.  For certain Pop Up and temporary retail this might also be a good method of controlling costs.

No sooner do I complete the show, than I read an article in the Inman News, by Susan Gallymore, describing how Starbucks has now opened a, now-one-of-a-kind drive-thru/walk-up Starbucks coffee outlet off Interstate 5 in Tukwila, Washington, constructed out of shipping containers.  While not touted as a Pop Up Store, per se, it clearly falls within my definition, of a Pop Up Store.

As quoted by Susan, "We can put a store like this on a lot that will be developed someday but is free for two or three years, and then we can move it." Sounds very pop up to me.

It should be noted that this cargo or shipping container consturction concept dovetails very well with Starbucks core mission of reducing its carbon footprint by recycling these metal containers that usually are scrapped after a 20 year useful life.

Finally and you must forgive me for this following comment, but I noticed a reference in the Inman News about conversion of missile silos for retail.  Now that is the ultimate in pop up retail, no?

For further discussions on Pop Up Stores, go to Tactics Magazine for my upcomming series of columns on the topic.

Why Women Tend to do Property Management Rather than Brokerage. Part III or From a Business Perspective, are Women Different from Men?

A little over a week ago, I wrote a blog article in inquiring, "From a Business Perspective, are Women Different from Men?", which I later followed with comments in Part II regarding personality differences inherint in each of the sexes.

At the time that I wrote the these earlier blogs, it was my perception that there was a disproportionately small amount of women involved in commercial real estate, particularly in executive or leadership positions.  However, I did not consider property management, which is clearly within my definition of commercial real property. As a matter of fact, my anecdotal experience tells me that there is no shortage of women involved in property management, including the upper echelons of property management.  Now, I don't know how well my anecdotal experience translates into the broader realm of our industry, but if my sense of things is any where near accurate, I wonder if there is any reason why there might be more women in property management rather than in other areas of commercial real property.

This sounds like a question for IREM to answer.

How Should Video be Used by Commercial Real Estate Professionals?

I know it sounds like I am gushing and I suppose that I am a bit, but Duke Long as come a long, long way in a short time with his video series, "The Real State of Real Estate."

His newer videos evidence a focus on using the visual medium of video to enhance his message. Furthermore, he seems to have thought out what he wants to accomplish and what message he intends to convey through each of his videos.

For example, The key message that I got from Duke's, "Bricks & Slaughter" video was that shopping center owners better start consider the growing effect of online sales as part of their overall strategy for their centers.  While verbally expressing himself on the video, the visual presentation of the empty parking lot and the locked and apparantly abandoned store fronts, said as much, if not more than his verbal comments.  Not only that, the video had significant emotional impact, maintaining the audiences attention.

Duke's, "Wabash Landing" is another example of a thoughtfull mix of the conjunction of visual messaging and audio content. The message that is conveyed to me in this video is that if you are an owner of a shopping center, it might be worth your time to give Duke a call to get some help.  This video enhances Duke's personal brand.  More videos like this one may serve to increase business for his day job, which is being a broker.

My third example of a Duke Long video is his, "Super Bowl Central. Georgia Street". Duke isn't even in this video which is fortunatly, hosted on screen by Leslie Bonacker of Cresa Partners. The clear reason for this video was to promote a.k.a. market the "newly redeveloped Georgia Street".  It seems to me that its purpose is to get people to lease space on Georgia street. To be frank, I am not as enamored with this video as I am with the prior two.  The audio script wouldn't motivate me to lease space nor is the visual component of the video, showing an empty lobby and two people walking down the street compelling.  While I have no problem with Leslie giving some background and describing what is going to be happening on the street during the Super Bowl festivities, it seems that the purpose of the video would have been better served by adding some drawings or video of what one would expect to see during the Super Bowl.  My gosh, its the Super Bowl.  The street should be mobbed and the visual element should  convey that message. Now if I were a retailer, I would want to lease space as fast as I could if I believed that street would be as crowded as I expected.  In this case, I believe the video detracted from the message rather than enhance it.

From a Business Perspective, are Women Different from Men - Part II?

As expected, I've received a couple of comments my blog post "From a Business Perspective, are Women Different from Men?", that I posted on January 1, 2012.

A.L. (Ann Lisa) Braun writes about a story she heard  on the radio about a recent UK study confirming what Ann Lisa believes most most people already knew--men and women are very different.   According to Ann Lisa and the report, "The researchers concluded that there were ‘extremely large’ personality differences between the sexes which could have implications in the workplace."

From my perspective, I wouldn't be at all surprised that there are "typically" some personality differences between men and women although I am not sure that those personality differences are as a result of hormonal or other physiological differences or expirational differences typical of men or women or perhaps a combination or both. I am also not sure that this means that an employer should treat women, as a class, differently than men.

As Ann Lisa comments that "what we should do with this information is definitely fodder for debate." However, she is confident that there generally ARE differences, and she recommends being flexible with your style in order to best work with different personalities (and the same goes with different personalities within the same gender.)

Here's a link to an article about the study.

Now I have read the study and frankly, I don't need a study to tell me that there are differences between men and women including general phycological differences.  It may seem like a joke that men seem to control the TV remote or tend to flip through the channels like a race horse, but my anecdotal experience tells me that some of these habits are very typical of the sexes, to a very considerable extent.  But the question I ask again is, do these differences generally mean that it would be advantageous or dissadvantageous for a company to work with men or women?  I think not and any distinction to be made should be done on an individual basis.  I still think that more women should get involved in commercial real estate which as a profession is grossly under represented by women.

Thanks Lisa.

Kinect for Windows - Can We Use This Gesture Interpreting Technology for Commercial Real Estate?

As reported by ZD Net, Steve Ballmer of Microsoft announced at CES 2012, that The Kinect for Windows sensor and software development kit will be out in early 2012 is, indeed, on its way.

I think that the Kinect has industry and life altering potential, akin to the Mac or iPhone.  Imagine sitting in front of your computer and having the computer recognize your gestures without touching the screen.  Potentially, no more need for a mouse.  The potential is limitless.

Now for those in the real estate industry, if only we can imagine how to apply this technology to our business.

How Will Brick & Mortar Retail Survive Online Sales - Part One

This is the first in a series of posts about “online” vs. “brick & mortar” retail sales and what I consider the factors affecting both.  It is my intention by this series of articles to facilitate thought, discussion and analysis in the hope of proposing helpful strategies to allow a healthy co-existence between the two methods of retail sales.  As General Martin Dempsey said today on Face The Nation, brick & mortar is at a “strategic deflection point,” in which it needs to learn and adapt. The bottom line is that I do not see online sales going away anytime soon and if you deal in the brick & mortar, you better think out your strategy.

During the last week of December, I read an article declaring that 13% of all online sales on Christmas day was for the purchase of an iPhone, iPad or iPod.  Steve Jobs is likely smiling away in his grave. A few days later I read another article about how much online holiday sales have increased, (I don’t recall the number but it was in the billions).  These two facts have been festering in my mind for the last two weeks. What is the current economic realities of brick & mortar retail and how will brick & mortar survive the internet.

Not to overstate the obvious, there is a strong trend towards online purchasing and away from brick & mortar. I don’t think anyone sees this trend abating anytime soon. I’ve noticed this trend in my own buying habits and the buying habits of those around me.  This year I have made online purchases of clothing; the type of purchases I would have never done, previously. 

For example, this year I stocked up on two new business suits, a few casual slacks and shirts and a few new pair of shoes, all of which were purchased online.  To be fair, I didn’t even consider the suits until after I had seen them in a brick & mortar store and I first saw the shoes in a print catalogue. I’ll let you in on a well known secret; I have a thing for men’s saddle and spectator shoes.  A style not widely popular and a style that has been pretty difficult to get unless you wanted to play golf in them and were willing to walk around your home and office with spikes on. So I was pretty interested in getting a few new pair.

Sometime in September, I received a print catalogue, showing saddle shoes, manufactured by Cole Hahn, in larger sizes.  While I liked what I saw, I was reluctant to purchase shoes online, sight unseen. Later, in October, my wife and I stopped by a Cole Hahn, brick & mortar, store in a mall in Phoenix.  To the delight of my wife, there on display were the saddle shoes. At the urging of my wife, I tried several pair on. Although I would have liked to wear the shoes out of the store, the store did not have my size in stock and I had to order them, to b delivered to my home.  The shoes arrived a week or so later. At the time that I ordered the shoes in the store, they seemed a bit narrow. However, since Cole Hahn made it brain dead easy to return, I felt comfortable ordering them.

After the shoes arrived, it was very clear that they were too narrow so I returned them and received a full credit. Although disappointed, I remembered that the same shoes were being offered by a major big man, brick & mortar retailer with a large, (no pun intended) online marketing presence. There, on their website, were the same shoes but in wider sizes. Not only that, some of the shoes were being heavily discounted. Without further ado, sitting at my desk, I ordered a few pair.  Within a week, I had shoes that fit and it cost me less money. I saved money by having the shoes shipped to their local store. 

Offering free shipping to their brick & mortar store was a brilliant piece of marketing on their part.  The store wasn’t that far away so it was easy for me to pick up my shoes and when I was in the store, I bought three shirts, two pair of slacks and tried on two, three piece suits.

A few weeks later, I received an email newsletter indicating that the suits were being offered at a 30% discount, if purchased online by the end of November. Since I liked the suits and knew what size to order, I purchased them online, saved 30% and had them shipped to the store again, saving the shipping charge.  You know where I am going with this. When I went to the store to pick up my suits, I also bought two more dress shirts and two ties, spending more money.  What a surprise.  Brilliant, sheer brilliance.  There is no doubt in my mind that somebody with brains really thought through their strategy, coordinating their online and brick & mortar marketing. I love it when people use their head.

So what is the point of my “shoe & suit” story?

Trust.  I am gaining a greater trust of online purchasing; and

Thoughtful marketing and the effective coordination of online stores with their corresponding brick & mortar stores.  How to have both work in tandem and help each other out rather than cannibalizing the sales of the other.

More on these topics and the effect of online taxation on brick & mortar sales in later posts.  You can leave comments in to this post on Commercial Property Herald below or comment on twitter @creradio.

 

From a Business Perspective, are Women Different from Men?

In early October, I was fortunate enough to be invited to attend The Final Frontier, A Seminar On Women As Entrepreneurs In Commercial Real Estate, held in San Francisco, the second of an annual seminar on the topic. Well, to be more accurate, I asked Leslie Lundin to invite me, which she kindly did.

I was fascinated by the general subject matter and I walked away from the seminar with one overwhelming question in my mind:

From a business perspective, are women different from men?

This question was not a direct topic of presentation or conversation at the seminar. I believe the main focus of the seminar was to encourage women to be entrepreneurs in businesses related to commercial real estate and identify the entrepreneurial opportunities that are available.

Many of the speakers included accomplished women in commercial real estate and many of those who have looked to break the mold and venture out on their own. There was lots of discussion by those of experience with the many obstacles and difficulties faced by women entrepreneurs and start-up executives. There was much encouragement and many warnings.

Presentations and numbers were provided evidencing the distinct shortage of women entrepreneurs and women in the top echelons of the commercial real estate executive suites and the fact that the pipeline of women heading to the top is considerably disproportionately low in comparison to the general population. I don’t recall the exact numbers but I recall hearing percentages in the teens for the pipeline of women in executive positions that are likely to move to the upper echelons of commercial real estate, whether in a corporate environment or on their own.

While the topics varied and while I can’t say that the speakers intended for me or anyone else to walk away with this understanding, there seemed to be two distinct, differing and underlying perspectives expressed by the speakers:

• Women are no different from men and should not be treated differently; and

• Women are different from men and bring a different perspective than their male counter-parts. Therefore, commercial real estate companies would greatly benefit from having more women in the upper echelons of their business.

There I was, one of about three men, sitting in a conference room filled with about 200 women and there didn’t seem to be a clear consensus among the women whether they should be treated the same or differently than men. It was an epiphany for me and confusing, to say the least. You have to understand that I was brought up in a family with a strong dominating mother who had a 189 I.Q. and who insisted that she didn’t want to lower her standards by being an equal to men. In reality, few people were her equal, at least from an intelligence perspective, but I don’t think the fact that she was a woman had anything to do with it. She simply was the type of person who could accomplish whatever she wanted and neither man nor woman would be wise to get in her way. As far as my mother and I were concerned, from a business perspective, there was nothing significantly different between men and women, at least nothing that should promote or prohibit their success in life or business other than the quality of their character and their individual intelligence, skills and abilities.

So what am I supposed to do now, hire women because they have a different perspective that is derived from the mere fact that they are women? I am having as difficult a time rationalizing this concept as I would if I were to insist on hiring a man because he might have a slightly different perspective on business, merely because he was a man.

I think that women are doing a disservice to themselves by arguing or promoting the concept that they should be hired or promoted based upon the fact that they bring a decidedly female perspective to business or that women as a class have an advantage because of that perspective. While women may have a decidedly female perspective on things, which may at times prove to be beneficial to business, men and women tend to earn my respect based upon their character, intelligence, ability to communicate well, experience, trustworthiness and good humor. None of these traits seem to be exclusive or predominate in either sex, as far as I am concerned.

I will be having a special radio show on this topic, hopefully sometime in February or March 2012 and hope to have Faith Hope Consolo, Chairman, Retail Leasing and Sales Division Prudential Douglas Elliman Real Estate, Leslie Lundin, Managing Partner, LBG Realty Advisors, LLC, and two other special guests whose names I prefer not to announce until after I have confirmed their appearance and the date of the show.

Commercial Real Estate War Story Ideas & Kindle Fire Giveaway to the Most Interesting Story

On January 11, 2012, CRE Radio will host our annual "Best Of Commercial Real Estate War Stories, 2011",  at 12 noon Pacific Standard Time.  This is going to be a special show in which listeners get to re-live some of their most interesting commercial real estate stories. 

The stories can be about "interesting" "funny" or "stupid" deals.  Terrible or great buyers, sellers or landlords. Miracles or so they seemed, like Tim Tebow.  Great accomplishments.  Something that you are proud or ashamed of.  Any anecdotal story that you think would be of significant interest to our commercial real estate listeners.  We are not interested though, in hurtful or cruel stories.

To top off the show, we are going to give away a brand, spanking new Kindle Fire, a combination of color e-reader and Android tablet to the person who provides the best story.

Since the radio show will be no longer than 1 1/2 hours, we have limited time to air stories so we request that you send to me a brief written synopsis of your story along with your contact information and we will choose the top 10 stories to be included on the show.  If your story is chosen, we will either have you tell the story, live on the radio or pre-record it for airing during the show.  Only listeners registered at our website, www.creradio.com will be eligible to receive the Kindle Fire.

So have I told you the story about the time, 36 years ago when I took a retainer check from a client who had been arrested for writing bad checks?  Do I need to say more.

Send your story to me by leaving a comment on this blog or by writing to me at:

Twitter:  @creradio

LinkedIn: http://www.linkedin.com/in/howardkline

email: howard@creradio.com