Posts Tagged ‘King of Prussia’
While having brunch with my family in our hometown of Sioux Falls, South Dakota, I had the surprising good fortune to enjoy a slice of the best raisin bread I’ve ever had. So good in fact that I asked the server for information about the bakery that supplied it–only to discover it wasn’t made by a bakery but a local guy working in his mother’s garage-turned-commissary.
After several phone calls and a long lunch, I realized that this baker represented more than just an advisory engagement opportunity for me. After determining his options for a sustainable business platform, I quickly realized that this young man (and his uncanny baking skills) represented something more profound: the endangered demand for quality products in lieu of convenience.
David Napolitano is making incredible bread and supplying a small local specialty grocer along with two or three eateries in town, but the demand for his product is sure to outpace his ability to produce it. In order for David to continue making bread at a profit, he is forced to either
a.) Charge a price beyond what the market will bear.
b.) Outsource the production to a larger-scale manufacturing facility—in which case product quality will suffer
or c.) Collaborate with a complimentary concept (such as a restaurant, super-luxury hotel or bulk olive oil retailer) with both a scaleable platform and significant financial resources.
Gone are the days where local artisans and craftsman line the streets with their shops: specialty bakeries, coffee roasters, etc. Granted, more and more are popping up in major US cities. But outside those densely packed urban areas, suburbanites are driving to lifestlye centers and super-grocery chains. For most, there is no alternative to mass-produced, lower-quality products from corporate retailers. Read the rest of this entry »
In the mid-90s, the King of Prussia Mall outside Philadelphia underwent an incredible transformation.
Its owners, including Kravco and Simon Property Group (NYSE: SPG), renovated and expanded the mall, connecting its two sections (the Court and the Plaza) to turn KOP into one of the largest shopping malls in the U.S. More importantly, the mall saw a huge influx of specialized, boutique and brand-name merchants, as well as higher-end anchor tenants like Nordstrom and Neiman Marcus. Suddenly, King of Prussia was no longer a mall; for the region’s shoppers, King of Prussia was THE Mall.
The enormous growth that turned King of Prussia (now majority-owned by Simon Properties) into a retail mecca was something that occurred throughout the country–a culmination of the 80s’ unbridled consumerism and emphasis of the shopping mall “experience.”
Today, e-commerce is crushing many community malls and power centers, and even the highest-end regional malls (KOP included) aren’t drawing shoppers the way they once did. But the “mega-mall” as we knew it in the 90s hasn’t gone away, but simply migrated to other countries.
Like Russia. Read the rest of this entry »
As in any other business, commercial real estate professionals are wise to keep an eye on the political and legal landscape. There’s no denying that the worlds of investment and government are closely (some would say inextricably) linked. Success in one of these arenas entails significant knowledge of the other. Just look at the federal government’s role in the single-family housing bubble, or the ongoing growth of multifamily. Keeping abreast–or even better, involved in–government policy allows firms to get in on the ground floor of soon-to-be-booming markets–and get out before the bubble bursts.
On a state or local level, this wisdom still applies. Take, for example, the Commonwealth of Pennsylvania, which in the last several years has been working to join the growing ranks of U.S. areas that enjoy the increased tourism, taxes, and employment that comes about through legalized gambling. Gambling has a complicated history in PA (see, for example, the still-unresolved legal wrangling over a potential Foxwoods Casino in Center City Philadelphia… or South Philly… Or, at this point, maybe somewhere in the Delaware river). Read the rest of this entry »