Commercial Real Estate Finance

Posts Tagged ‘Retail’

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 »

Once again, today’s ranking is based upon data published by Colliers in its 2013 National Retail Outlook (click here for the PDF). Drawn from a selection of the United States’ largest retail markets, here are the Top 10 Retail Markets for New Supply:

10. Philadelphia, PA (341,178)

9. Seattle/Puget Sound, WA (359,259)

8. Westchester County, NY (382,794)

7. Oakland/East Bay, CA (413,797)

6. Milwaukee, WI (413,803)

5. Denver, CO (414,564)

4. Orlando, FL (416,855) Read the rest of this entry »

Following up on Wednesday’s Top 10 of Markets for New Retail Product, here’s a ranking of major retail markets according to their current recorded inventory. As before, this list is based on data from CoStar Group and Colliers’ 2013 Retail Outlook (click for the PDF). Here are the 10 Largest Retail Real Estate Markets in the U.S.:

10. Boston, MA (Reported inventory: 87,564,315 SF)

9. Tampa/St. Petersburg, FL (87,575,353)

8. New Jersey – Northern (92,198,983)

7. Phoenix, AZ (104,240,834)

6. Houston, TX (140,973,923) Read the rest of this entry »

Based on data from CoStar Group and Colliers Research (here’s Colliers’ Outlook 2013 as a PDF), here are the Top 10 Retail Markets for New Development at the close of 2012. Drawing from the largest retail markets surveyed by these groups, we are ranking these markets according to the number of square feet under construction at the end of 2012.

10. Stockton, CA (158,000)

9. Palm Beach County, FL (163,252)

8. San Diego, CA (190,383)

7. Seattle/Puget Sound, WA (235,000)

6. Hawaii (338,515)

5. Washington, DC (387,305)

4. Minneapolis, MN (475,916)

3. Chicago, IL (507,000) Read the rest of this entry »

This ranking comes from Colliers’ 2013 retail report, which analyzes current fundamentals by both market and product type. You can see Colliers’ entire report on this PDF. In its “scorecard” section, you can also find Colliers’ outlook for grocery, restaurant, department store, auto, and hobby companies. Today, let’s look at America’s Top 10 Discount Retailers:

(Parentheses show growth according to each company’s most recent quarterly report)

10.Fred’s Super Dollar (down 2.5%)

9. Kohl’s (1.1%)

8. Walmart (1.5%)

7. Dollar General (1.6%)

6. Sam’s Club (2.7%)

5. DSW (4%)

4. Ross  (6%) Read the rest of this entry »

Even though many retail markets have struggled since the recession and the advent of e-commerce, there are many markets, submarkets, and property types that still show potential for retail investors and operators. From IRR’s Viewpoint 2013, based upon data from Real Capital Analytics, here are the Top 10 Retail Markets of 2012:

10.Seattle

9. Houston

8. Nashville

7. Phoenix

6. Dallas

5. Boston

4. Washington, DC Read the rest of this entry »

Today, we have two interesting videos from the busy researchers over at Jones Lang LaSalle (NYSE: JLL). First, we have an interview with Steve Ondrejack,  VP Logistics for Modell’s Sporting Goods. He discusses the ongoing effects of e-commerce on his company and the brick-and-mortar retail sector: 

Read the rest of this entry »

Take a look at our latest poll results! While we’re far from reaching a consensus, there’s clearly improving sentiment toward single-family…

See our previous polls here.

Here’s some exciting news about Llenrock’s most recent completed deal, presented via press release:

FOR IMMEDIATE RELEASE

LLENROCK GROUP CLOSES ON $11.5 MILLION BRIDGE LOAN FOR FREDERICK, MARYLAND SHOPPING CENTER

PHILADELPHIA, PA (January 14 , 2013) – Llenrock Group, an independent real estate finance and advisory firm, is pleased to announce it has secured $11,500,000 in financing for the owner of Vista Shops, a community shopping center in Frederick, MD. The 110,000 SF shopping center at 1080 W. Patrick Street is anchored by Aldi Foods and Planet Fitness, with pad sites leased to Taco Bell and Bank of America. Llenrock Group advised the owner in obtaining a 3-year bridge loan from RAIT Financial Trust, including $500,000 to fund build-outs for future tenants.

The owner, Broad Street Capital, LLC, will use this financing to further stabilize and lease its property before seeking permanent financing. Broad Street Capital purchased the property in 2006 from United Healthcare, which used the facility as a call center.

Llenrock Group Senior Associate Chad Levitt explains, “Broad Street did an outstanding job repositioning the asset and leasing it up with quality tenants, but the time was not yet right to seek permanent mortgage financing.  We were able to secure favorable terms on a three-year bridge loan, which will allow the sponsor sufficient time to boost occupancy and NOI.”

Located on Frederick’s “Golden Mile” retail corridor, Vista Shops is easily accessible from Interstates 70 and 270. The shopping center is currently 80% occupied.

About the Company

Llenrock Group is an independent real estate advisory and investment banking firm in Philadelphia. Through its subsidiaries, Llenrock Advisors and Llenrock Realty Partners, they provide services in investment sales, direct investment, and structured finance. For more information, please visit Llenrock.com.

Week in Review for December 15 – 21:

- 2012 comes to a close with a high level of real estate activity, CoStar Group reports. Many investors are hurrying to complete deals prior to 2013, fearing higher tax rates in the new year.

- In Philadelphia, Post Commercial Real Estate, LLC, acquires the 1,015-unit Presidential City Apartments from BLDG Management Company. Presidential City, the largest apartment complex in the area, was sold for $51 million (roughly $52,000/unit).

- In Columbia, Maryland, the city planning board approves a planned 380-unit apartment and retail complex, as well as an open-air expansion for the nearby Columbia Mall. The 75,000 SF shopping plaza, proposed by the mall’s owner, General Growth Properties (NYSE: GGP), would create space for 8-10 retail tenants and 2 restaurants.

-   Dollar stores such as Family Dollar (NYSE: FDO), which have shown surprising resilience since the recession, become increasingly popular among triple-net retail landlords.

- American Realty Capital (NASDAQ: ARCT) announces the acquisition of another REIT, American Realty Capital Trust III. Their combined assets will total $3 billion, reports Bloomberg.  Read the rest of this entry »