LAS VEGAS—One of the foremost challenges for leasing professionals is to understand the long-term financial impact of their decisions. So said John Gerdes, EVP of asset management at L&B Realty Advisors LLP, based in Dallas.
Gerdes ran a class on Tuesday morning at ICSC's RECon 2017 event titled: “A Closer Look at Leasing Financials: The Numbers Behind the Deal.” He told the audience that we are living in a pretty crazy time right now and what is most important for the retail business is to “keep track of what is going on in the financial world.”
And it is more than looking at Amazon's numbers. “We continually hear that retail bankruptcies are at a record pace. I suspect we will be close to the 2008 number of bankruptcies.” But he says that while there are going to be some retailers that will go out of business, many of them come back and operate. “Did you know there are still some Blockbuster stores? Retailers are resilient and will find a way to make it work if it is possible.”
Sears rules America in 1989. We are seeing people now buying Sears boxes and turning them around and chopping them up and making added value to their shopping center. Maybe it isn't such a bad thing in some cases.
The internet isn't killing shopping malls, other malls are. Competition. We built too much.
What is going on with sales? You should be tracking your tenants to see how they are doing. Our tenants are partners and if they are doing well, we are doing well.
There are a lot of stores out there that are actually doing really well right now, he continued. “The Home Depot, and the Lowes of the world, are pretty good bets.”
Whether you are a leasing person or a manager, you need to know what your company's hold period is, he continued. “Ask, what is the goal? That affects how you lease and what you do with the financials.”
GlobeSt.com also recently chatted about retail leasing with Neil Johnson, managing director of SVN Landmark Commercial Real Estate LLC. “Retail leasing has always represented a shifting and dynamic business landscape,” he tells GlobeSt.com. “This has never been more true than today.”
A popular recent theme, he points to, is to identify online sales as the driving force for new store closings and various retail vacancies. “Depending on the source, estimated retail e-commerce sales are being reported in the range of 8 and 11%. While buying via internet is certainly a factor, the current changes are, in fact, much more complicated than that.”
And there are a variety of broad systemic challenges to traditional brick and mortar retail, he tells GlobeSt.com. “One big factor is the change in consumer priorities including a shift away from spending on 'things' like fashion items, furniture and electronics, and turning toward more experiential spending like travel, restaurants, personal services and the like.”
And like L&B Realty Advisors' Gerdes, he says that certain brands and products continue to grow, while others fall victim to competition, product trends and changes in consumer preferences. “Nevertheless, economists report a general level of consumer confidence with solid fundamentals across most segments of the economy.”
For other thoughts from experts who attended the ICSC RECon event here in Las Vegas and to learn more about panel coverage from the event, check out the articles below.
LAS VEGAS—One of the foremost challenges for leasing professionals is to understand the long-term financial impact of their decisions. So said John Gerdes, EVP of asset management at L&B Realty Advisors LLP, based in Dallas.
Gerdes ran a class on Tuesday morning at ICSC's RECon 2017 event titled: “A Closer Look at Leasing Financials: The Numbers Behind the Deal.” He told the audience that we are living in a pretty crazy time right now and what is most important for the retail business is to “keep track of what is going on in the financial world.”
And it is more than looking at Amazon's numbers. “We continually hear that retail bankruptcies are at a record pace. I suspect we will be close to the 2008 number of bankruptcies.” But he says that while there are going to be some retailers that will go out of business, many of them come back and operate. “Did you know there are still some Blockbuster stores? Retailers are resilient and will find a way to make it work if it is possible.”
Sears rules America in 1989. We are seeing people now buying Sears boxes and turning them around and chopping them up and making added value to their shopping center. Maybe it isn't such a bad thing in some cases.
The internet isn't killing shopping malls, other malls are. Competition. We built too much.
What is going on with sales? You should be tracking your tenants to see how they are doing. Our tenants are partners and if they are doing well, we are doing well.
There are a lot of stores out there that are actually doing really well right now, he continued. “
Whether you are a leasing person or a manager, you need to know what your company's hold period is, he continued. “Ask, what is the goal? That affects how you lease and what you do with the financials.”
GlobeSt.com also recently chatted about retail leasing with Neil Johnson, managing director of SVN Landmark Commercial Real Estate LLC. “Retail leasing has always represented a shifting and dynamic business landscape,” he tells GlobeSt.com. “This has never been more true than today.”
A popular recent theme, he points to, is to identify online sales as the driving force for new store closings and various retail vacancies. “Depending on the source, estimated retail e-commerce sales are being reported in the range of 8 and 11%. While buying via internet is certainly a factor, the current changes are, in fact, much more complicated than that.”
And there are a variety of broad systemic challenges to traditional brick and mortar retail, he tells GlobeSt.com. “One big factor is the change in consumer priorities including a shift away from spending on 'things' like fashion items, furniture and electronics, and turning toward more experiential spending like travel, restaurants, personal services and the like.”
And like L&B Realty Advisors' Gerdes, he says that certain brands and products continue to grow, while others fall victim to competition, product trends and changes in consumer preferences. “Nevertheless, economists report a general level of consumer confidence with solid fundamentals across most segments of the economy.”
For other thoughts from experts who attended the ICSC RECon event here in Las Vegas and to learn more about panel coverage from the event, check out the articles below.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
