Archives for April 2014

As the saying goes, if you can’t beat ’em—mimic ’em?
As far as convenience goes, it’s hard for physical retailers to compete with their online foes, where consumers can search for the latest products without even pausing to get dressed.
But bricks-and-mortar stores aren’t giving up. In order to better compete with their Web-only counterparts, physical stores and the malls that house them are aiming to bring the ease of online shopping to the real world, utilizing a new genre of tenants and technologies.
“What we are doing as a landlord is facilitating the bricks-and-mortar retailer to compete with an online retailer as it relates to convenience, which is, ‘Give me what I want when I want it,'” said General Growth Properties CEO Sandeep Mathrani.
The new look of today’s shopping malls
As shopping mall traffic steadily declines and major retailers such as Sears and J.C. Penney shutter stores across the U.S., mall tenants have dramatically changed over the past few years, said Jesse Tron, a spokesperson for the International Council of Shopping Centers.
In place of these customary lessees, new types of tenants—grocery stores, fitness centers and even post offices—have become mainstays at many malls across America.
But these nontraditional tenants have not only helped occupancy rates at shopping centers rebound from their post-recession lows. They also help consumers combine trips to one destination, therefore encouraging cross-shopping among the mall’s other tenants.
“If you had told a developer or landlord 15 years ago that they would be putting grocery stores or fitness centers in shopping malls, they might have looked at you sideways,” Tron said. “Not only are they doing it now, but [they] are finding success in its application.”
Rick Caruso, CEO of Caruso Affiliated, one of the country’s largest privately held real estate companies, has been including grocery stores on his properties for 20 years, he said. The Promenade at Westlake, in California, boasts upscale grocery store Bristol Farms, while The Commons at Calabasas houses a Ralphs grocery store.
A proponent of altering malls’ traditional footprints, Caruso said that anchor tenants come in all shapes and sizes—including grocery stores. He said centers need to focus on giving consumers a convenient way to shop, but also on delivering a memorable experience. One example of this is the incorporation of jazz music at Michael Mina’s Bourbon Steak restaurant at The Americana at Brand, he said.
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“The place is just packed,” he said. “It just adds another dimension to the experience on the property.”
Although Caruso remains on the sidelines about fitness centers, whose visits shoppers typically don’t combine with shopping trips the way they do with other tenants, General Growth Properties’ Mathrani said their importance lies in giving visibility to his malls.
For instance, if a consumer is used to visiting a particular shopping center for their groceries or workouts, it becomes second nature to head there when they’re looking to buy a tuxedo.
“They don’t even think about going anywhere else,” Mathrani said.
Bringing high-tech to in-store
Despite a slew of new-age tenants, convenience at retail comes down to more than just storefronts. Caruso Affiliated offers free Wi-Fi at its dozen retail properties, while General Growth Properties, which owns more than 100 shopping malls, will add this service at all its locations in May. This technology allows shoppers to easily conduct product reviews and price comparisons while in-store.
Read More10 online retailers going from clicks to bricks
Retail apps, such as Tanger Outlets’, offer shoppers location-based offers as they browse for bargains. Macy’s Herald Square store as well as the shopping malls at Las Vegas’ Bellagio and Venetian resorts, have teamed up with Aruba Networks’ Meridian software company to offer in-store GPS to shoppers looking for a particular department or store.
But perhaps the most important development is making it simple to shop across both the Web and the physical store. According to a recent report by the Accenture consulting firm, a growing number of U.S. shoppers plan to make purchases at bricks-and-mortar stores, but they want the experience to be more convenient.
As such, 19 percent of consumers surveyed said they are reserving items in-store or buying them online for in-store pickup, while 14 percent are buying at the store and having the item shipped to them.
Coming to a mall near you? Retail’s next big idea
Because of these blurred lines, Gap last week said it will expand its online and offline synergies, including the ability to reserve items in-store at all domestic Gap stores. American Eagle will also debut the ability to buy online and ship from the store, while Kohl’s will grow its ability to ship Web orders from 200 to 500 stores. Wal-Mart is also testing delivery and pickup of its online grocery orders through Walmart To Go.
But these innovations are not restricted to individual retailers—developers are also getting a piece of the action. Caruso Affiliated’s The Grove property offers a free concierge service, where shoppers can call up, request an item, and have it packaged and sent to their home, free of charge.
Four major mall operators, including General Growth Properties and Simon Property Group, are incorporating—and investing—in same-day delivery service Deliv. Through the program, shopping malls fund and supply runners, who collect packages from their tenants and deliver them to shoppers for $5. Customers are able to define a delivery time window that’s most convenient for them.
The system gives bricks-and-mortar stores a “huge” advantage over Amazon, Deliv CEO Daphne Carmeli said. It positions the retailers’ physical footprints to serve thousands of distribution centers, which allows for faster and more convenient delivery options. By comparison, Amazon only has distribution centers in 14 states.
“You can see how the scale has suddenly shifted,” Carmeli said.
What’s more, Mathrani said the use of bricks-and-mortar stores more as distribution centers could have deeper implications for retailers’ profitability, as it will likely lead to better inventory management, fewer markdowns and higher margins.
“If they can actually get their online inventory and the store inventory to be transparent on a real-time basis then imagine what can happen,” he said. “We’re just on the one yard line with 99 yards to go.”
By: Krystina Gustafson (CNBC)
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The Education Trust: Achievement and Opportunity in America PowerPoint Presentation by Kati Haycock, leading child advocate in the education field, from the NAIOP-NM April luncheon.
By: Kati Haycock (NAIOP-NM 4.21.14 Luncheon)
Click here to view source presentation.

Once you start counting things, it can be hard to stop. Commercial property in operation presents a huge number of things to count, and it’s only with modern technology tools that we can handle that data on an ongoing basis.

Every type of commercial property from industrial to retail to office offers a universe of data to be collected. In order to find hidden value, areas for improvement, or to create comparative statistics to increase efficiency in property operation, we can count a property’s various dollar flows, square feet, degrees fahrenheit, kilowatt hours, air pressure psi — the list goes on and on. Unlike decades past, thanks to the sharp rise in automated building operations systems, these variables are increasingly being sucked into computers, where all huge piles of data belong.
If you’re counting new terms coined by our technology-infused times, it’s time to add one more. The marriage of new commercial property development and data collections aimed at ongoing improvement of property and community operation has taken on the name quantified community. It’s a holistic way of capturing the vital signs of a commercial property plus the community it’s embedded in.

If that sounds vaguely medical, it’s because the concept is an extension of the quantified self movement, where technology-enabled people are collecting information about their own bodies and diets in order to tweak themselves to maximum health. The simple bathroom scale isn’t enough any more — and in real estate, neither is the simple electricity bill.  The new thinking says we need to know the reasons behind the numbers, and to know our properties as we know ourselves — as systems.

New Thinking, New Developments

New York City’s Hudson Yards project is flying the quantified community banner very conspicuously.  It’s an eye-popping 16-skyscraper, 12 million sq. ft development on Manhattan’s west side.  The details of the project are impressive and include a fully quantified data collections operation encompassing retail (750,000 sq. ft.) office, residential and public space.

The collaboration is being touted as producing the first “quantified community” in the U.S.—which has a rather creepy, 1950s social experiment ring to it, though Constantine Kontokosta, deputy director NYU’s Center for Urban Science and Progress, assured us that all participation will be opt-in. Mr. Kontokosta said that NYU had approached Related about participating in the collaboration, after surmising what a good data set the new development would provide.

“This is just an incredible research opportunity for us,” said Mr. Kontokosta. “We hope to make the data available to other researchers and programmers, to find ways to make it more sustainable, and to apply the findings across the city.”

Mr. Kontokosta added that this marks the center’s first collaboration with a real estate developer. Ideally, he hopes to convince the other Hudson Yards developers to participate as well.

Although what, precisely, the center will measure is still somewhat vague at the moment. Possibilities include pedestrian flows, air quality within buildings and across open space and the health, the activity of residents and workers using a custom-designed, opt-in mobile application as well as solid food and recyclable waste and energy usage.

Mr. Kontokosta said that he believes residents will be interested in participating, not only because the project will be “unprecedented in scale” but because there’s a lot of interest in the “quantified self” at the moment.The Center also hopes the collaboration will help advance its leadership in the emerging field of “Urban Informatics—the observation, analysis, and modeling of cities.”

“The ability to conceive of and develop an entirely new neighborhood creates tremendous opportunities,” Related Hudson Yards president Jay Cross wrote in a statement. “Through our partnership with CUSP we will harness big data to continually innovate, optimize and enhance the employee, resident and visitor experience.”

And presumably, assuming the data is public—which we would hope it will be (Mr. Kontokosta said that Center hopes to make things “as transparent as possible”)—it will also allow journalists like us to analyze how well the city’s investment in the new neighborhood has paid off in terms of creating a viable community. And how it should fund, aid and encourage future developments like Hudson Yards.

The Wisdom of Opt-Ins

The success of such a data collection project (and the property operations improvements that could follow) all hinge on collecting sufficient amounts of data.  Some of this collections capacity will be “baked in” to the development in the form of smart thermostats, water distribution and the like. But what’s most interesting, and potentially alarming, is the mobile application mentioned above.

Landlords or developers considering quantified community features should be wondering how to balance the successful collecting of data with the very real privacy concerns of American residents, customers, and public passers-by. It’s tempting to imagine that we have turned a corner technologically and that privacy is no longer a right. But that’s not only simplistic, it’s a great way to accentuate, not extinguish the “creepy” aspects of such applications.  It may be a short hop technologically from keeping tabs on lighting efficiency in a commercial property to compiling a database of comings and goings of tenants and visitors, but it’s a giant leap in terms of civil liberties, and one that should be heeded.

By: Wayne Grohl (The Source)

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