Posts By : CREC

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

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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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