Revving its Engines
PizzaRev opened a concept test kitchen in Los Angeles in April 2012. Today, it has nine company-owned restaurants with 19 more company and franchised stores on the way.
“This isn’t just about our growth, but also growth in the fast casual pizza space,” said Irv Zuckerman, co-CEO of PizzaRev. In fact, the fast casual pizza space is much bigger than it was two years ago when PizzaRev opened its first concept. New concepts from well-known brands, such as Chipotle’s Pizzeria Locale, have opened up within the last year.
PizzaRev has positioned itself to grow with a number of franchise partners. “We continue to seek multi-unit franchise partners who have the passion to help build our brand and collectively make us the best fast casual restaurant in the industry,” Zuckerman said.
For example, the 1,000-unit Buffalo Wild Wings chain is a PizzaRev franchise partner that plans to open two units in the next few months in Minneapolis with more on the way. While it isn’t common practice for a franchisee to be a partner, Buffalo Wild Wings is also a minority stakeholder in PizzaRev.
Building better pizzas fast
The PizzaRev fast casual idea aims to move the customization process forward and improve on what hamburger restaurants and other specialty brands have done.
“First you had McDonald’s and Burger King, and then came Smashburger and Five Guys who offered wider ingredient choices,” said Robert Haas, PizzaRev’s exclusive Los Angeles broker, X Team International Partner and cofounder of LA-based Cypress Retail Group. “The paradigm shift taking place in the pizza space means better quality on all levels.”
In short, the fast casual food experience fits today’s consumer. The ingredients are fresh, the service is fast and the price is right. “PizzaRev uses high-end mozzarella cheese that has buffalo milk in it like many fine dining restaurants use,” said Zuckerman. “We make our dough fresh daily and don’t upcharge for the long list of topping options.”
That enables interactive ordering, a concept that separates PizzaRev from the standard restaurant model. Customers watch their pizza being made and select basic ingredients: two kinds of dough, four kinds of sauce, four kinds of cheese and as many toppings as they want — from a list of 11 meats and 16 vegetables. Want more capers or fennel seed? Just ask. The pizza will cost $7.99 whether you ask for one topping or 10. “We don’t want this to be a wallet-decision,” said Zuckerman.
Using a 3.5-ton WoodStone open flame pizza oven heated to 800 degrees, in just two to three minutes customized pizzas are complete. “This means you can now enjoy a quick and fresh pizza for lunch,” Zuckerman added. “In addition, our Roman-style thin crust cuts the calorie count substantially. Guests feel good after having our pizza.”
But the customization process doesn’t stop there. Customization and ingredient variations are available for salads and the Freestyle Coca-Cola machine has hundreds of soft drink options to choose from, as well as craft and premium beers. “What we want to provide for our guests is an experience that fulfills our motto, ‘Craft Your Own.’ ” Zuckerman said.
Now PizzaRev’s franchise partners are going to rev it up across the country.
Quick PizzaRev Facts
What: Fast casual, craft your own artisinal pizza restaurant. Who: Partners and co-CEOs Rodney Eckerman and Irv Zuckerman; partner and COO Nicholas Eckerman; partner and CMO Jeff Zuckerman. Exclusive L.A. Broker Bob Haas, X Team International Partner and co-founder of the L.A.-based Cypress Retail Group. Current number of stores: Nine, with 19 in the pipeline in 2014. Average size: 2,000 to 3,000 sq. ft. Website: pizzarev.com. More: Check out the Chain Store Age exclusive series about PizzaRev, “Small Retailer, Big Plans,” at chainstoreage.com/real-estate.
Phillips Edison’s Value-Added Strategy
Phillips Edison & Company has grown by acquiring troubled shopping centers in good locations, redeveloping and improving the tenant mix. Over the years, the company has continued to optimize retail property value with its complete operating platform providing a diverse range of retail solutions. Today, the Phillips Edison portfolio contains more than 260 shopping centers across the country.
Jeffrey Edison and Michael Phillips founded Phillips Edison in 1991, at the depth of the commercial real estate depression caused by savings and loans driven to bankruptcy by poor real estate investments. “Lots of distressed property was on the market,” said Phillips.
“Our idea was to buy small grocery-anchored centers at discounted prices and add value by improving the property.”
The company doesn’t just focus on grocery-anchored centers anymore.
When the housing bubble wrecked the commercial real estate industry in 2007, the principals saw the opportunity to grow out of grocery-anchored properties into other kinds of shopping centers. “We realized that the value-add part of our strategy didn’t have to be limited to grocery-anchored,” said Phillips. “Because we were larger, we could look at larger projects.”
Today, the company’s acquisition criteria aim at more property types. In addition to grocery-anchored centers, Phillips Edison also wants power centers, lifestyle centers and mixed-use properties. It will look at assets of 150,000 sq. ft. or more, in major metropolitan markets and dominant secondary market locations. All of the company’s non-grocery anchored properties go into a portfolio called Total Retail Solutions.
The Kenwood Collection embodies the new strategy
The broader perspective led to a major opportunity for Phillips Edison. In 2012, the company bought a half-finished power center in Cincinnati, called Kenwood Towne Place, at a bank auction. The original developer, Bear Creek Capital LLC, had lost the property to foreclosure in 2009. Legal challenges had tied it up for years. With those problems solved, Phillips Edison found itself with a major opportunity.
The new owner promptly developed a new strategy and changed the property’s name to The Kenwood Collection. “We thought the power center format was doable,” Phillips said. “But the location was so good that we thought an enclosed, luxury galleria would be more successful and more appropriate for the market.”
Indeed, the trade area includes the wealthiest communities in Cincinnati. For instance, 60% of the households in neighboring Indian Hill, the wealthiest community in Ohio, report annual incomes above $150,000.
In addition, The Kenwood Collection stands inside the ring road of Kenwood Towne Centre, one of the country’s most successful malls.
“We don’t have Chicago’s Oak Street high fashion retailers here,” Phillips said. “But we do have Oak Street customers. We think the Kenwood Collection can capture those customers.”
Saks Fifth Avenue wants those customers, too. The high-fashion retailer has signed a letter of intent to open an 80,000-sq.-ft. department store in The Kenwood Collection when its downtown Cincinnati lease ends next year.
The re-conceived center, now under development, will feature a mix of uses, including 300,000 sq. ft. of high-end shopping, dining and services; 200,000 sq. ft. of Class A office space; and a 2,500 space parking garage. Current tenants include Crate & Barrel, The Container Store and Mitchell’s Salon & Day Spa.
With The Kenwood Collection, Phillips Edison is delivering a premier property to its Total Retail Solution portfolio, one that demonstrates that the company’s ability to add value to underperforming grocery-anchored centers extends to power, open-air and now, luxury retail centers at the highest level.
Spotlight on Miracle Mile Shops
Jerry Irwin signed on as general manager of Miracle Mile Shops at Planet Hollywood Hotel & Casino in Las Vegas in September 2013. He oversees all center operations, including design, development, management, construction and strategic direction.
Miracle Mile Shops spans 475,000 sq. ft. and boasts 170 stores. Recently, CSA asked Irwin about his plans for the center.
How do you conceive of your role at Miracle Mile Shops?
Irwin: Our owners have done an amazing job of redeveloping what was The Shops in Desert Passage as Miracle Mile Shops at Planet Hollywood. They took the property to the next level. My job is to continue that progress.
People come to Las Vegas to eat, shop and enjoy entertainment. So that’s our focus: Find the interesting new restaurants, shops and entertainment and bring them into our center.
Who are Miracle Mile Shops customers? How do you bring them into the center?
Irwin: We appeal to a very broad audience. Because the center is located directly on The Strip and is attached to Planet Hollywood, our audience is very similar to the Las Vegas visitor, which covers a very broad spectrum. On any given day we welcome people of all ages and backgrounds from all over the world.
We work closely with the Las Vegas Convention and Visitors Authority to bring people in. They bring many tours to the city, and we work closely with tour operators.
We use Twitter, Facebook and other social media very actively. We also work with bloggers. In front of the center, we advertise on huge LED screens — 150,000 people pass by on Las Vegas Boulevard every day, and 72,000 of them visit the center every day.
What new tenants has the center brought in recently?
Irwin: Last October, we announced two new restaurants and two new retailers: Ketchup Premium Burger Bar, Meatball Spot, Tervis Tumbler and Shoe Palace.
The official Britney Spears boutique just opened. It’s called Britney: U Wanna Piece of Me? The opening accompanied the December premiere of Britney’s two-year residency inside The AXIS at Planet Hollywood. The store offers branded Britney merchandise, including clothing, accessories, home goods and memorabilia.
This year, GNC and Original Diva will open, and we’re negotiating a number of new leases. You can expect announcements soon.
We’re also looking. We’ve launched a new website targeting brokers — dothemile.com. We’re sending out email blasts to tell brokers about it. We’ve also started a targeted restaurant program. We’ve selected 100 restaurants that we’re interested in looking at and emailed a personalized sales piece to each.
What are you working on now? What is your priority?
Irwin: I try to focus an equal amount of attention on all areas of the center since we really strive to offer something for everyone. From restaurants and retail to advertising content inside the center and social media, it is all important.
Give me an example of a specific project.
Irwin: We have an opportunity on Harmon Avenue. There is a valet area there where you can pull into Planet Hollywood and the Hilton. We have 60,000 sq. ft. in that area that we can redevelop. We want to create a walkable, fun destination activated with day-life and nightlife, including restaurants with al fresco dining and music.
Irwin: I think that shopping centers should always strive to do better by continually asking what customers want. That’s how you stay relevant.