Woolbright names accounting exec
Boca Raton, Fla. — Woolbright Development announced that it has appointed Geoff Higginbotham as director of accounting.
Higginbotham is responsible for the monthly, quarterly and annual financial reporting for the company’s wholly owned assets and partnerships. He was previously corporate controller for Turnberry Associates in Aventura, Fla.
Report: Retailers’ expansion plans up 40% over last year
New York City — Retailer demand for new locations is up across the board, according to ChainLinks Retail Advisors’ just-released "National Retailer and Restaurant Expansion Guide." The report details the current expansion plans for hundreds of the largest U.S. retail and restaurant chains.
“As 2010 came to a close, growth plans were up 30% from the levels we recorded last year,” said ChainLinks’ research director, Garrick Brown. “Following the strong performance during this year’s holiday sales season, many chains further upped their growth plans. Right now, expansion plans are up 40% over last year’s levels.”
Nearly every region in the United States is experiencing an increase, according to Brown, with the strongest surge in growth plans in markets where unemployment is lowest.
“The greater Washington, D.C., area remains highly desirable, as does the greater Eastern Seaboard from Boston to the Carolinas,” he said. “We have also seen a considerable increase in retailer requirements in the Chicago market. Texas remains extremely popular. And though both have elevated unemployment, both Florida and California have also seen a spike in retailer demand in most markets. Regardless, numbers are up across the board whether in the Pacific Northwest or the Gulf Coast states.”
According to the report, some of the most active retailers currently include
- 7-Eleven is hoping to open as many as 350 stores in the United States and Canada this year.
- 99 Cents Only is planning on at least 25 new units.
- Aldi is planning on at least 100 new stores in 2011.
- Apple will add at least 50 new stores in 2011.
- AT&T: Expect at least 100 new cellular stores this year.
- Bottom Dollar Food could add as many as 110 stores in 2011.
- Burlington Coat Factory is planning on at least 20 new stores.
- Chico’s could add as many as 40 units in the next 18 months.
- Citi Trends may open as many as 65 new stores this year.
- Dollar General plans on 625 new stores in 2011.
- Dollar Tree will open as many as 275 stores this year.
- Family Dollar has 300 stores on tap for 2011.
- Five Below plans on at least 50 new stores this year.
Click here for a complete list of the retail and restaurant chains with the most active expansion plans.
Founded in 1979, ChainLinks is the leading retail real estate advisory services organization in North America serving America’s premier retailers, landlords, and investors.
High rent, wrong use?
By Jason S. Baker
Some highly unusual tenant mixes have been popping up everywhere in the retail market over the past couple of years. Frankly, some of the non-retail uses now being welcomed into the retail lineup are so questionable that one day soon landlords may look around at their transformed shopping centers and wonder if they’ve made the right decisions. By signing too many onerous leases during the Great Recession and its aftermath — perhaps because a scary debt obligation was coming due or that conspicuous vacancy needed to be filled by something — some owners might just find that their top retail tenants are balking at lease renewals and, instead, fleeing for rival properties with more suitable co-tenants.
Consider one of the fastest-growing non-retail tenants taking over retail space these days — emergency room clinics. Medical services are valuable and needed, of course, and have been the saviors for a number of retail centers faced with recessionary vacancies. The fact remains, however, that not long ago very few, if any, landlords would have done a deal with these aggressively expanding businesses, which are now paying premium rents for prime shopping center spaces across the country. Understand, these are not dental practices or minor-emergency clinics — they are full-fledged ERs, replete with dedicated ambulance lanes and, in the worst-case scenarios, sick or injured patients being hauled into the center on gurneys. In one of the more remarkable examples of this phenomenon, the owner of an upscale Houston center, which faced a daunting vacancy after The Limited closed its approximately 7,000-sq.-ft. store, did a truly mystifying deal by dividing the space into two surprisingly polar uses — an ER clinic and a hamburger joint. Today, these incongruous co-tenants sit side-by-side, raising the prospect of life-or-death dramas unfolding before the eyes of families strolling into the burger concept for a quick bite. Around Houston, this center had been noteworthy, not only because of its architectural beauty, but also because it was one of the few grocery-anchored projects with enough cachet to attract mall-quality soft goods retailers such as Gap, Express and Bath & Body Works. It is still a bit shocking to the center’s shoppers to see ambulances idling in front of this highly visible storefront.
One might wonder why any landlord would strike such a deal. In all likelihood, the initial conversations with these ER clinics were no longer than a minute or two with the landlord kindly declining the offer of this tenant to pay top-dollar rents to relieve the center of its vacancies. Eventually, though, the clinics come around with an offer that is 35 or 40 percent higher than average, and the landlord relents. Indeed, these ER clinics, which tend to be either independently owned or part of regional hospital systems, are intent upon positioning themselves for the future while they can. Like the banks a few years ago, they will pay ceiling-busting rents in order to lock up the best-possible real estate.
The same goes for many of the other non-retail uses that have started to proliferate in Houston and other markets. For example, a well-known Texas pediatric association now has some 40 locations throughout the Houston market, many in neighborhood shopping centers. While this particular tenant usually leases in professional buildings and offices, it is relocating more of its clinics into retail properties, which offer advantages like easy-access parking, great signage and close proximity to the customer base. While some non-retail uses are more tolerable than others, these pediatric clinics are legitimate traffic draws and a far cry from emergency rooms.
While the short-term payoffs involved in some of these non-retail deals can be considerable, the potential long-term repercussions on co-tenancy are clearly worrisome. Because medical tenants, in particular, sink so much money into their build-outs, they usually must sign very long-term leases in order to make the numbers work. Thus, today’s decisions will reverberate for years to come. These economically lopsided deals — high rent paid over the long term, with minimal build-out cost to the landlord—certainly have their upsides. But as the economy improves, how many landlords will realize with horror that a non-retail use has put them at a serious disadvantage for future retail success? If a key retail tenant can go down the street and be with Gap, Ann Taylor and Bath & Body Works, why should it stay next to an ER or other non-retail tenant? Retailers can simply relocate stores and add new restrictions to their standard lease clauses — “no gyms, karate studios, massage parlors … or ERs.” A landlord with a 25-year lease to an undesirable tenant is stuck with that situation, and all its ripple effects, for the duration.
We all have to make tough decisions, and the right decision often can be a little scary. Today, we are seeing cash-strapped landlords take leaps of faith and invest in new facades, launch expensive marketing campaigns, hire more leasing people and take other painful steps in order to stand behind their properties over the long term. By contrast, sometimes the seemingly safe decision is the functional equivalent of hitting the panic button. And panicking is never good. The basic message here is simple enough: High rent from the wrong tenant can fundamentally alter the basic character of a center in counterproductive ways. And, it could be for much longer than the original deal intended.
Jason S. Baker is an X Team International partner and co-founder and principal of Houston-based Baker Katz, a full-service commercial real estate brokerage firm specializing in first-class retail tenant representation, project development and leasing, and investment sales.