Google exec joins JLL as chief digital officer
A Silicon Valley veteran who helped develop Google Maps and Google Apps has joined JLL as its first chief digital product officer.
Vinay Goel, who held several product development and management positions during 11 years at Google, is tasked with the job of transforming the real estate industry through technology-based innovation, according to the CEO of JLL Corporate Solutions John Forrest.
“Vinay joining JLL is a game-changer for the corporate real estate industry,” said Forrest. “Technology is creating unprecedented opportunity for organizations to unlock significant latent potential in their corporate real estate portfolio.”
The company last year formed JLL Spark, a global division dedicated to identifying and delivering new technology-driven real estate service offerings. Goel will collaborate with the Spark team, which recently announced the creation of its $100 million Global Venture Fund for investment in companies innovating in “proptech.”
During 30 years in the technology industry, Goel also held management positions at Oracle, Intel, and CheckPoint Software.
Discounting new discount concepts
With off-price player like Marshalls, T.J. Maxx, and Ross Stores entrenched as favored anchors for shopping centers, traditional anchors like Macy’s are finding it harder than they imagined to get in on the act. There’s more to it, it turns out, than just slashing price tags.
The first several Macy’s Backstage stores to open 2015 and 2016 were freestanding locations, and they have proved to be the last. Macy’s last year opened nearly 50 more Backstages as store-within-a-store concepts, with plans to open 100 more in 2018. Was this a strategic shift? Or was it merely a financial decision made by a brand arriving late to the discount gold rush?
Macy’s is trying to elbow its way into a discount market where the standard-setter has long been Nordstrom Rack. Same-store sales at Nordstrom Rack grew 3.7% overall in the fourth quarter of 2017, contributing heavily to Nordstrom’s overall 2.6% increase across all stores. Nordstrom’s performance in recent years has been rocky, and the iconic department store brand has been relying heavily on Rack to fuel growth. In 2018, just one traditional Nordstrom opened in the United States compared to 12 new Rack stores.
Others, meanwhile, experiment with new value concepts. Kohl’s is opening up Amazon return centers and selling specialty Amazon products (the Echo line of electronics, for instance) at a number of locations. The early returns are positive, as Kohl’s posted strong first quarter numbers, and traffic at Kohl’s stores featuring Amazon was up 8.5%.
Experimentation in the discount sector is hardly a new phenomenon. When Mills Corporation came along in the 1990s and began developing the large outlet centers they have become known for, not every discount store was a hit. Many early concepts struggled, in fact. Neiman Marcus Last Call and Saks Off 5th were both early standouts, however, but it’s noteworthy that both of those brands had the added hook of offering what were traditionally luxury products at an accessible price.
Fueled at least in part by the recessionary cycle of the late 2000’s, discount concepts have increased traction in the post-recessionary period, appealing to households in a broad range of economic standing. Here in my home market of Houston, the highest-volume and best-performing Home Goods stores in the region are those located in some of the city’s wealthiest neighborhoods.
This raises two important questions, the answers to which may have less-than-optimistic implications for retailers and, by extension, retail real estate.
The first is this: How do retailers ever go back to full price? With discount now becoming the norm, and the majority of new concepts in recent years (especially in apparel) being discount formats, it is going to continue to become harder to buck the tide of consumer spending habits and expectations. Discount, once a rare and thrilling exception, is now the rule.
The second question is almost a corollary of the first: With so much more discount out there, how can new concepts hope to stand out? Already tight margins and a lack of differentiation in a crowded segment is a worrisome combination.
The reality is that discount isn’t a cure-all for troubled malls and shopping centers. Luxury at a discount is compelling. Deep discount is enticing. But standard products at a modest discount are mildly interesting at best. Ross and T.J.’s continue to perform as traffic builders for in-line retailers, but are they nearing their saturation points?
The bottom line is value retail is a segment that is watered down and cannibalizing its own ability to expand — at the same time making it harder for more traditional concepts to break through. If this is how things look now, with a strong economy and an abundance of quality real estate available, what happens going forward when conditions aren’t so favorable?
For discount retailers, these are hard questions, and they suggest that simply rolling out another iteration of a not-so-new discount concept may not be a formula for sustained success.
Jason Baker is a co-founder and principal at Baker Katz, a full-service commercial real estate brokerage specializing in tenant representation for national chains. Baker can be reached at [email protected].
Fort Worth suburb remakes itself as Old Town
A post on the Old Town Burleson Facebook page throws down the culinary gauntlet to its more famous neighbor to the north: “The rest of DFW is catching on to what the locals already know; Old Town simply has the best restaurants around.”
Tagged to that is an article from Culture Map Fort Worth running down the specialties of eateries such as The Hickory Tree Grill, Old Texas Brewing, Co., Fresco’s Cocina Mexicana, and Grumps Burgers. Burleson’s resurgence as a foodie oasis has not been lost on retail real estate developers.
Old Town Station, a renovated office building with retail and restaurants on the ground floor, just lured a Fort Worth institution called Ol’ South Pancake House to its Burleson site. It’s the first new restaurant in 20 years for the 56-year-old restaurant renowned for its German pancakes.
Much like a master-planned mixed-use development, Old Town Burleson maintains an aggressive events calendar that includes the Hot Sounds of Summer concert Series, the Be Healthy Burleson 10K run, and Christmas in Old Town.
Bryan Dyer of The Woodmont Company represented Ol South Pancake House in the leasing of its 5,000-sq.-ft. space at Old Town Station.