Observations & Conversations
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Cats in the Bag and
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Well since the cat is out of the proverbial bag, many of you know that Ted, my partner and husband, is recovering from lung cancer. The last few months have been scary to say the least. I want to thank everyone at TKO, The Dealmakers, ESP and @Property.com for keeping the home fires burning. In the heat of preparing for the ICSC Convention, the launch of @Property.com and the largest Dealmaking convention issue in our 21-year history, Ted and I camped out in an 8 x 10 hospital room far from the buzz at the office and our team pulled off more victories than one. Thanks to everyone who sent their good thoughts. One person said, “Ted’s everyone’s best friend,” and after fielding about 200 e-mails and 50 voice mails DAILY from people sending their regards, I guess he was right. We appreciate the kind words. Now, he’s back to work and two of the East Coast’s finest specialists are confident that he will be giving us grief for a long time to come. I guess you could say I’m back to work too. On that note, this month’s issue of ESP features an interesting “lifestyle” retailer - Stew Leonard’s.
Years ago, Ted was leasing a center in Connecticut and tried hard to get Stew Leonard’s to the site. He raved about what a great tenant they were and would have “offered his first born” if they’d do a deal. Unfortunately, the company grows slow and steady with just three units open in a 30+-year operating history. We had some internal debate about whether Stew Leonard’s would be accurately labeled a “lifestyle” tenant... it’s a supermarket, for goodness sake! Yeah, but how many supermarkets do you know that draw from a 50-mile radius and generate $3,470 psf sales (that’s not a typo). Luckily for some developer, Stew Leonard’s is looking for new locations to house its 130,000-sq.ft. stores (read the story on the next page).
Another tenant on the move is Holyfield’s New South Grill. Nope, it’s not a sports bar. The restaurant caters to young professionals, offering a casual and contemporary setting and sophisticated Southern food. Plans call for saturating the Atlanta market before blanketing the South. A real eye opener to the entrepreneurial spirit of the company is its willingness to judge each potential site on individual merit, so if you’ve got space in Atlanta give them a call.
Our Cinema Circle column has some really great leads too. Resort Theaters is scouting sites in the Rocky Mountain region and the East Coast. This is not your run-of-the-mill theater – Resort Theaters charge about double the typical ticket price and serve gourmet entrees. Megastar Theaters, a start-up with one unit operating and its second location in the works, is looking in Minnesota’s Twin Cities market for new sites. Edwards Theatres is trying to raise cash and plans to open 250 screens in the near future. KLM Theatre Partners is rolling out its Star Cinema chain with two units under wraps and plans to open more locations. So if your tenant mix plan includes a movie theater, check out this column. I can’t image getting financing on the start-ups, but then again getting a mortgage based on some of the “big boys’ ” paper isn’t too easy either.
In addition to great leads for developers, we have some interesting projects featured in this month’s issue. Richard E. Jacobs Group is developing a 1.2-million sq.ft. enclosed mall with a river running through it. The anchors of the Triangle Town Center are retail institutions (Dillards, Sears, Hecht’s and Belk) but the presentation is unlike any project you’ll see in the Raleigh, NC market. The Village of Monte-Lago, another water-themed retail venture, is being developed in Las Vegas and intended to house retail boutiques with a Ritz Carlton as the anchor. In Las Vegas, where everything is over the top, The Village of MonteLago brings water, a Mediterranean feel, high-end boutiques and waterside cafes to the desert. I’m sure there is a consultant out there with a report on how much more volume stores do when customers are psychologically moved by cascading water to shop. I often wonder if these massive water themes truly add to repeat visits and higher sales. It would be interesting to be a fly on the wall during negotiations with Dillards, Sears, Hecht’s or Belk about CAM expense.
CAM expense is always a touchy subject for retailers. Developers of projects with mall shops and attached open-air stores are often asked to separate the CAM so that the open-air stores don’t “carry the load” for the mall shops. But the mall shops want the open-air stores to “share” the expense. It’s definitely a dilemma, but the question is about as answerable as ‘which came first -- the chicken or the egg?’ Steiner Associates faced the same situation at Easton, a Columbus, Ohio project with interior mall stores connected to open-air shops. They decided that all tenants, interior and exterior, would share in the CAM expense of the project as a whole, rather than allocating different figures for the exterior stores and interior shops. That seems like the most logical approach to take. Until next month—