Posts By : CREC

The shoppers are coming

The shoppers are coming

Brokers say the shifting demographics of a growing population help make the case for prospective retail tenants to sign on the dotted line



By The Real Deal

In pitching new retailers on why they need to open a location at Downtown Dadeland, Continental Real Estate Companies’ (CREC) Vice President Rafael Romero presents a flyer featuring photos of the well-known local chefs behind four restaurants that have opened in the past 18 months at the retail and residential development in Kendall.

Romero tells prospective tenants about how restaurants like Barley, an American Brasserie; Harry’s Pizzeria; Pubbelly Sushi; and Ghee Indian Kitchen are reshaping the 7.5-acre Downtown Dadeland into a destination that will draw in affluent consumers from throughout South Florida as well as those living in the immediate area, where the estimated median household income is $137,237.

“Those establishments are part of a concentrated effort to create a restaurant row that has completely revitalized Downtown Dadeland,” Romero said. “To get them, we went to every chef event we could find in South Florida. If there was a croquet contest and they were there, we were there, too.” 

At a time when many brick-and-mortar brands continue downsizing or disappearing altogether from the American retail landscape, South Florida commercial brokers are courting tenants with sales pitches that focus on the region’s growing population and changing demographics.

The tri-county region added about 482,000 residents between 2010 and 2016, according to a March 2017 report by Florida International University analyzing recent U.S. Census figures. That growth has largely been fueled by immigrants —  the university’s report found that net international migration to the region increased 397 percent in that period. It remains to be seen how President Trump’s immigration policies could affect this trend.

To land some tenants, the brokers are working with landlords to revamp existing properties and configure new developments into experiential destinations. They’re also giving start-up businesses and established brands short-term leases to test out empty storefronts. And some good old-fashioned networking helps to land deals, too.

“Cold-calling and being a voice on the phone is not enough,” Romero said. “You need to get in front of them, show them pictures and explain the vision to get them to buy in. It is more than just promoting a building. You have to create a scene for them.”

To be sure, retail real estate is performing better in South Florid than in other parts of the country. Colliers International’s second-quarter retail report showed Miami-Dade’s vacancy rate was just 3.8 percent, Broward’s was 3.7 percent, and Palm Beach’s was 4.5 percent.  In comparison, the national retail vacancy rate rose to 10 percent in the same period, according to real estate research firm Reis Inc. And a recent report from online real estate marketplace Ten-X placed Miami and Fort Lauderdale in the first two slots of its top “Buy” markets for retail investors, forecasting  that the metropolitan areas will experience a combined 14 percent growth in net operating income by year’s end.

However, local asking rents are growing at a slower pace than the 3 percent national rate, per JLL’s 2017 spring retail report for South Florida. In the second quarter of 2017, asking rents only ticked up 1 percent in Miami-Dade, 2 percent in Broward and 2.7 percent in Palm Beach. The brokerage also placed Miami, Fort Lauderdale and Palm Beach among 15 cities that have reached the peak of the market cycle.

A more anecdotal sign that South Florida is not immune to the shrinking base of department, apparel and accessory stores is the fact that brokers are concentrating more on fitness tenants like indoor cycling studios and fighting gyms as well as entertainment providers such as bowling alleys and luxury movie theaters .

“There is not much deal flow for traditional apparel and trinket sellers,” Romero said. “These other categories have stepped in and given rise to the lifestyle center.”

Robert Granda, commercial brokerage Franklin Street’s South Florida retail director, said he is advising landlords he works with to target start-up business owners doing old school concepts like luxury barbershops and cigar bars.

“It could be a barber from Los Angeles or New York who is looking to open his first location,” Granda said. “Typically, landlords would like to see a track record. I will tell them men’s grooming and barbershops are hot tenants because they provide services that are driven by the experience of being there.”

To attract a retailer, some landlords are willing to offer short-term leases for pop-up stores, says Rod Castan, president of leasing and management for Courtelis Company. The property owner gets to temporarily fill an empty space while the tenant gets to test out a storefront, he explained.

“You will see landlords willing to take chances on incubating a retail concept,” Castan said. “That is a method we have used in Florida’s softer markets.”

For instance, House 2 Home Goods — a tenant at the Shops of Surfside in Cape Coral — opened under a three-month lease in February but in May converted to a longer term agreement, Castan said. In Miami, French macaron maker Ladurée opened a permanent spot in the Design District in June 2016 after testing out a two-month pop-up inside the Chrome Hearts boutique at 4025 Northeast Second Avenue during 2015’s Art Basel.

In other instances, the national retail slowdown means Castan’s team has to make more cold calls and do more face-to-face meetings with potential tenants. “We are rolling up our sleeves and doing old-school leasing … Our agents are on the road almost every day visiting other shopping center and trade areas looking for potential tenants.”

The promise of a development that has a social center is what gets many retailers to sign on the dotted line.

In Pembroke Pines, Courtelis has been successful in preleasing 75 percent of the 300,000-square-foot retail, entertainment and restaurant space at Pines City Center. Developed by Terra Group, the 47-acre mixed-use development is being built in two phases, with the first scheduled for completion by 2018. Major tenant signings include Publix, Carl’s Patio, Cooper’s Hawk, BurgerFi and Outback Steakhouse.

“These types of projects tend to have more attractive common areas and are better gathering places from a development standpoint compared to traditional shopping centers,” Castan said. “Bringing in ethnic, fast casual and healthy dining concepts is another way to make the projects more successful.”

Castan said he and his team show potential tenants renderings of Pines City Center to point out the features that will draw people in. “The center has transitional plazas between buildings and attractive rotundas, and the parking areas are planned to be more pedestrian-friendly,” he says. “These areas create gathering spaces where we can have pop-ups, art exhibits, music and other features that will make the shopping center more interesting to visit.”

Another large-scale mixed-use development that is following a similar retail recruitment strategy is Metropica, which has leased about half of its 485,000 square feet of retail. In all, the 4 million-square-foot development in Sunrise will have more than 2,200 residential units in addition to retail, dining and entertainment space, a wellness and fitness facility, a park and other recreational amenities.

“In the past, landlords would need a department store or a big box retailer as an anchor tenant,” says Sandie Witmer, in-house director of retail leasing for Metropica. “Today, the environment you create is the anchor.”

Witmer’s leasing team has been working on a curated restaurant collection as one of Metropica’s “environment anchor” concepts. “Retailers now look at the restaurant mix to see if it attracts different types of clientele,” Witmer says. “If they think someone eating there could be a customer, they want to be there, too.”

Using this strategy, the $1.5 billion megadevelopment has signed popular eateries like Harry’s Pizzeria, Bulla Gastrobar, Shake Shack and Fogo de Chao to go alongside entertainment tenants iPic Theaters and Kings Bowl and retailers such as Anthropologie and Kendra Scott Jewelry.

So far, retail leasing in South Florida remains strong enough and vacancy rates are low enough that brokers and landlords don’t need to offer “crazy concessions,” said CREC’s Romero.

“We’ve been in the single digits for a very long time,” he said. “Retail is very much alive.” 

Three Ways To Overcome Self-Imposed Career Limitations
Don’t let the naysayers stop you from achieving your dream, says Carol Greenberg Brooks.

Carol Greenberg Brooks, co-founder and president of CREC, a commercial real estate firm in Florida, started the company nearly 30 years ago with her best friend, Warren Weiser. “I knew less than zero about real estate,” she says. Brooks had just graduated from the University of Miami and was deciding what to do next when Weiser asked her to help lease two large commercial properties, Continental Plaza and Grand Bay Plaza. “I fell in love with transactions, negotiating and selling a dream to people,” she says.

Brooks helped start a company in the very male-dominated real estate industry and has never looked back. “It never occurred to me that being in a man’s world would be a difficult thing to do,” she says, in part because her father introduced her to accomplished and successful women when she was growing and in part because she has a third-degree black belt in karate.

We all have fictional notions of who we are that limit what we can achieve, Brooks says. “ Recognize that you can’t be whoever you want to be but you can be yourself ,” she says. For instance, Brooks admits she will never be a linebacker or a rock star but she was able to obtain a third-degree black belt. Whatever path you choose, there will be obstacles along the way, she says, but if you’re doing something that really matters to you, then those obstacles won’t have the power to limit you.

Here Brooks offers three ways to overcome self-imposed limitations.

Find your authentic self

Think back to any point in your life when you felt the most peaceful, the happiest and most inspired and you will see a pattern. One way to figure out what is limiting you, Brooks says, is to spend some time in quiet reflection. “When you’re having a million thoughts at once and are stressed, that’s never the time to say to yourself, ‘That’s a brilliant idea,’ ” Brooks says. Our best ideas tend to happen in a place that is still and quiet.

There’s no substitute for hard work

“Whatever you decide you want to be, you have to practice, practice, practice,” Brooks says. When Brooks decided she wanted to become a black belt, she practiced six days a week for more than 15 years. “It was hard and scary but I never saw that as a limitation,” she says. “If it hadn’t been authentic as to who I am, I would never had endured the training. I would have seen a million limitation.”

Listen to your own voice

Once you know what you’re meant to do, drown out the naysayers with your own voice. “If your vision is authentic, you won’t be deterred by what people say,” she says. “If I had listened to all the reasons I couldn’t have a real estate company or be a black belt, I wouldn’t have endured.”

Get ready. Amazon-Whole Foods deal will change how you buy food forever

Get ready. Amazon-Whole Foods deal will change how you buy food forever

, USA TODAY Published 12:05 a.m. ET June 18, 2017 | Updated 6:25 a.m. ET June 19, 2017

The Amazon-Whole Foods deal is expected to lead to lower prices and other changes across the industry. (Photo: Eric Gay, AP)

 

For anyone in the business of selling, supplying or hauling groceries: Things just got real.

Amazon.com’s $13.7 billion purchase of Whole Foods instantly makes it a major player in the U.S. grocery industry and that leaves a lot for shoppers, retailers and other companies involved in the industry to chew on.

The online seller is bringing its firepower to a grocery industry plagued by razor-thin profit margins. The move could slice into profits for food manufacturers, other supermarket chains such as the nation’s largest by market share, Kroger, and behemoths like Walmart, which is currently the biggest seller of groceries in the U.S. with more than one-quarter of the market, according to Euromonitor. It also potentially creates a challenge for companies that deliver groceries such as Fresh Direct and Peapod, and ready-to-cook ingredients and recipes to customers’ doors, like Blue Apron and Sun Basket.

“Once Amazon is a player in the industry, anything can go,” said Joe Agnese, senior food retailing analyst at CFRA. “The big threat is what else they can do. Now that they have a retail presence with (more than) 400 stores, long-term they can expand on that threat. They can (bring) pricing pressure. They could bring down prices and everyone would have to match them or lose share.”

The broader retail industry’s tailspin has only deepened with Amazon taking a big share of the blame. Once stalwarts of the industry, Sears, J.C. Penney and Macy’s are closing hundreds of stores. Mall favorites like The Limited and Gymboree have filed for bankruptcy protection. Now, traditional grocers could face a similar fate.

►A wave of merger and acquisition activity may on the way as companies seek scale. Amazon may, itself, be the acquirer. “I don’t think that this will be the last of Amazon’s purchases,” said Rafael Romero, vice president of Florida-based real estate firm CREC’s retail division.  “They fully recognize that brick and mortar and online retailing is all retailing and you need both.”

Other companies could look to buy expertise in crunching customer data — an area at which Amazon excels — and one that more shoppers, especially the Millennial generation, embraces. r

“I think it’s a great idea,” Trish Wichmann of New York said about Amazon’s reputation for speedy service while out shopping on Friday. “(Consumers are) used to texting. We’re used to instant gratification. That’s what we want. I think industries are trying to do that.”

Big food stores that haven’t been getting information on customers and crunching it are immediately behind. One of Amazon’s strengths is the way it captures purchase history and makes suggestions for new ones.

“Amazon is smart about mining data. They own data like Saudi Arabia has crude oil. Data is going to become only more (important) for those in grocery store business,” said Mark Hamrick, senior economic analyst at Bankrate.com.

►The challenges will extend beyond grocery aisles. Food manufacturers and producers need to gear up for two key possibilities: Amazon nudging itself into shoppers’ carts with food of its own making. It already has its own brand of many items such as batteries and pet food and Whole Foods sells its 365 Everyday Value brand.

The other major threat: Amazon engaging in margin-busting negotiations.

“If Amazon is able to gain the kind of scale they want in this space, they’ll be very tough in commanding a price,” Hamrick said.

Mass retailers now selling groceries, like Walmart and Target, and traditional supermarkets will need to be more competitive to retain customers, especially if Amazon cuts Whole Foods’ high prices.

Walmart had long been the biggest threat to the supermarket industry. In the 1990’s the chain began adding full-line grocery sections to its stores in a bid to increase sales and push foot traffic to the more profitable clothing and general merchandise it sells and Target followed with its own grocery sections. Today, new entrants such as Germany’s Lidl are coming into the market and chains like Aldi (also from Germany) are adding and revamping stores by adding more organic and specialty merchandise such as gluten-free foods, at low prices, to attract shoppers, creating an hyper-competitive environment.

►Mainstream grocers will need to take a hard look at themselves. Kroger’s stock dropped Thursday after the company lowered its outlook for annual profit and tanked again after the Amazon-Whole Foods deal was announced. Kroger’s shares lost 28% for the week. Stocks of other food sellers tanked, too.

“We’re going to see polarization here. Some players, like Wegmans and Publix, are strongly differentiated. I don’t think they’ll lose because of that. The ones that are not so strong and differentiated are more likely to fall victim to the price squeeze and you’ll see the shake-out. Other chains will look to buy these chains to consolidate,” said Neil Saunders, managing director of GlobalData Retail, pointing to Buy Low Market in California and Ingles in the South as chains that might struggle to survive.

In the near-term, at least, the big winner will probably be shoppers. Consumers can look forward to more than just extra cash in their wallets when they leave their local grocery stores. They might see completely overhauled stores — smaller footprints and larger assortments of exclusive brands, which is the successful German approach already invading the United States. Lidl opened its first U.S. stores on Thursday and Aldi is planning to add another 900 American stores and remodel the majority of its 1,300 existing ones. And Amazon’s tech heritage could completely refashion grocery stores from how they are laid out to what products are offered to how shoppers gather their purchases.

Longer-term it’s hard to say, but some people and consumer groups have already expressed concern about one company potentially having so much power.

“If you look at mergers in other industries, you already see what are the end results,” said Robert Ambrozy of New York.  “This will impact the end users and the price overall. They’re monopolizing the markets, so the rates will definitely go up.”

“Everyone’s game just needs to get tighter and that battle for the customer becomes all the more apparent,” said Jeff Roster, vice president of the research firm IHL.

“This is brand spanking new territory we’re smashing through here.”

CREC Tapped by Thor Equities to Reposition & Draw High-Street Retail to Prime Fort Lauderdale Beach Shopping Destination

CREC Tapped by Thor Equities to Reposition & Draw High-Street Retail
to Prime Fort Lauderdale Beach Shopping Destination

Florida’s leading commercial real estate firm to transform The Gallery at Beach Place
into a live-work-play lifestyle center following major renovations.

CREC – Florida’s leading, independent, full-service commercial real estate firm – announced today that it has been selected by Thor Equities as the exclusive leasing agent for The Gallery at Beach Place in Fort Lauderdale Beach, Florida. Bringing extensive expertise in high-street retail, CREC together with Thor Equities will reposition the property’s tenant mix, revitalizing this Fort Lauderdale Beach landmark.

A major $1.9 million renovation by Thor Equities, including a fresh façade and modernization of finishes throughout, is currently underway to appeal to shifting demographics and increased demand for tailored, experiential retail in the Fort Lauderdale market.

“We are excited to collaborate with Thor Equities to reposition this trophy asset and bring it to full occupancy,” said CREC Vice President Rafael Romero. “The 360-degree renovation of The Gallery at Beach Place encompasses not only the aesthetics of the property, but our team’s commitment to re-imagine this property as a 21st century lifestyle center anchored by an inspired collection of eateries, offices, health and fitness centers, and entertainment retailers.”

With this appointment, CREC continues its track record of reshaping the retail blueprint of lifestyle shopping destinations in Florida. Most recently, the firm created and executed a vision for a revitalized tenant mix at Downtown Dadeland. Prior to CREC’s involvement in 2014, Downtown Dadeland struggled to attract retail occupants that boosted foot traffic. CREC has since positioned Downtown Dadeland as Miami’s premier location for chef-driven restaurants, situated in a pedestrian-friendly, open-air environment. The restaurant lineup includes four James Beard Award winners and nominees including Pubbelly Sushi, Harry’s Pizzeria, The Brick and Zuuk.

The Gallery at Beach Place is situated at 17 South Fort Lauderdale Boulevard, just steps from the sand, and directly on the main thoroughfare of Fort Lauderdale Beach’s State Road AIA. The property’s prime location affords breathtaking ocean views and heavy pedestrian and vehicle traffic from neighboring hotel brands, including Marriott, The Ritz-Carlton, W Hotels and Westin. Tourist attractions such as The Fort Lauderdale Air Show and Tortuga Music Festival add seasonal boosts of foot traffic. The area attracts over 13 million annual visitors, spending more than $10.6 billion each year.

Comprised of 95,769 square feet of mixed-use space amid three floors, The Gallery at Beach Place is currently 70 percent occupied, with 32,618 square feet of rentable space available. Thor Equities’ significant investment in infrastructure will transform the property to provide a platform for CREC to attract high-quality tenants to Fort Lauderdale Beach’s newest live-work-play lifestyle center.

CREC Vice President Rafael Romero and Senior Leasing Associate Ariel Bernstein will oversee leasing and marketing The Gallery at Beach Place. Current anchor tenants include CVS, Escapology, Hooters, Lulu’s Bait Shack, and Maui Nix.

 

Kopelowitz Ostrow Opens Gables Office

A Fort Lauderdale law firm has chosen Coral Gables for its first permanent Miami-Dade office.

Kopelowitz Ostrow Ferguson Weiselberg Gilbert signed a 5,000-square-foot lease at 2800 Ponce de Leon Blvd., a Class A office building anchored by Regions Bank. The firm will join others operating in the 28-story Regions Bank Tower, including Wicker Smith O’Hara McCoy & Ford and Breier Seif Silverman & Schermer.

The new location will be managed by veteran Miami lawyer Robert “Bobby” Gilbert, who became a name partner after joining the firm last fall. Gilbert left Grossman Roth to oversee and expand Kopelowitz Ostrow’s complex litigation and class action practice.

“By opening our office in Coral Gables, we’ll be able to continue building our team and providing the full range of services to our clients and co-counsel across South Florida,” he said in a statement.

The office will be home to eight of the firm’s 45 or so attorneys come August.

Carol Brooks, president of Coral Gables-based CREC, represented the firm in the lease transaction. No other details were released.

CREC VP Reveals Firm’s 2016 Strategy
jbusby

Joshua Busby, VP

ORLANDO— We’ve been talking with Josh Busby, a vice president at Continental Real Estate Companies, about commercial real estate trends. Over the past months, he’s told us what Central Florida retail markets are the hottest, described how big the retail void really is, and went beyond specialty retail grocers to discuss what else is hot in retail.

In this final installment, we asked Busby about his own form. What are some opportunities for growth and expansion over the next 12 to 24 months?

“With each new project we are appointed to lease, sell or manage at CREC, we are strengthening our existing relationships in the Central Florida market and building on those to create new business opportunities,” Busy tells GlobeSt.com. “The firm is positioned to finish this year strong with significant market share growth in the region and will enter 2016 with a great deal of momentum.”

Specifically, Busy expects investor and tenant interest will grow further in Central Florida’s key submarkets next year. He also predicts the market should capture additional national and international investor interest, particularly from South America.

“Orlando’s position as a top tourist destination, reaching record visitor numbers over the past year, and the establishment of a Major League Soccer team, Orlando City Soccer Club, are factors helping to draw more investor demand,” Busby says. “When a shopping center in the region hits the market for sale, offers come in from all over the country and around the world.”

And Busby sees another factor working in Orlando’s favor: The price wars for well-positioned assets that Miami is experiencing, which he says is driving more investors to turn north towards markets like Orlando in search of quality assets at more accessible prices.

“With all commercial real estate sectors, from retail to office and multifamily, experiencing strong performance in the region, Central Florida is poised for further growth and investment in the year ahead,” Busby says. “We are positioning CREC to continue to expand the firm’s real estate portfolio and benefit from the added market demand.”

Art Basel has been great for Miami, CEOs agree

Art Basel has played a key role in positioning Miami as a world-class city. It has captured the attention of art-lovers from every corner of the globe and brought them to South Florida, where they can sample our quality of life and multicultural atmosphere…

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CEOs suggest ways to ease traffic woes

As Miami continues to grow as a global city, new construction projects are significantly impacting traffic in and around the Brickell Financial District. To help our clients make sound office leasing decisions…

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Miami’s largest office lease deal of 2015

The Real Deal “Law firm inks downtown Miami’s largest office lease deal of 2015.

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