Shopping malls, which McKinsey has defined as “the heart and soul of communities, the foundation of retail economies and a social sanctuary for teenagers everywhere,” have been under severe pressure from the proliferation of e-commerce and other forces. Although shutdowns and consumer reluctance to shop in person reduced average mall foot traffic by 90% at the pandemic’s outset, COVID-19 isn’t wholly to blame for the decline; it merely accelerated trends already in place. In 2014, McKinsey asserted the traditional mall as being “at a critical inflection point,” with “a storm of global trends coming together at the same time to cause malls to change the role they play in people’s lives.” In the subsequent years, “the single biggest factor in the decline of foot traffic at shopping malls has been the rise of online shopping,” says business content platform MarketScale. A record 12,200 U.S. stores closed in 2020 and about 125 consumer goods and retail companies filed for bankruptcy that year, on top of almost 6,000 stores that closed in 2019. Though suburban foot traffic has nearly returned to 2019 levels, foot traffic at urban shopping centers and malls remains 16% below pre-pandemic levels. Traditional mall anchor tenants like Neiman Marcus and J.C. Penney declared bankruptcy recently and reduced their store presence, while gas prices, COVID-19 variant surges and supply chain issues further complicated the issue. But while the challenges are undeniable, don’t count the mall out as a preferred shopping venue just yet. Retail foot traffic rose 61% during Black Friday 2021 compared to the previous year, according to JLL, while average foot traffic was up 27% in January 2022 over January 2021. DigitalSignageToday reports that “industry experts believe the mall is ready for a comeback. It will look different, though, and leverage technology...

Stay-at-home orders, occupancy limitations and business closure orders during the pandemic took a big toll on fashion merchants. Renowned retail brands such as Neiman Marcus Group, J. Crew Group Inc., Brooks Brothers, Ascena Retail Group (operator of Ann Taylor, Lane Bryant and others) all filed for bankruptcy protection last year as sales plummeted 86% in the first months of the pandemic. Others, like LVMH Moët Hennessy Louis Vuitton, Macy’s, H&M and Burberry, closed outlets or trimmed payroll amid drastic sales slumps. The Washington Post reported in April that nearly 200 U.S. department stores have disappeared in the past year alone, with another 800, about half the country’s remaining mall-based locations, potentially being shuttered by the end of 2025. While U.S. consumers shelled out $192 billion more for online purchases in 2020 than they did a year earlier, online clothing sales rose far less than did food and beverages, consumer electronics, personal care and home furnishings. In February, U.S. spending at clothing and accessories stores was down 11% from a year earlier, according to the Commerce Department; overall retail sales grew 6.3% in that period. Purchasing perks up One reason for depressed store sales, of course, is e-commerce. Mark Cohen, director of retail studies at Columbia Business School and former chief executive of Sears Canada, notes, “The customer who used to be handcuffed to their local department store is no longer tethered because they have an online alternative that’s become even more attractive in the last year.” But things could be looking up for retail. The U.S. Commerce Department reported that overall retail spending rebounded sharply in March, rising 9.8% after the dip in February. Department store sales rose 13% from a month earlier, boosted by stimulus checks and pent-up demand. “What we’re seeing emerging...

Dealing with the effects of the COVID-19 pandemic has made commercial real estate landlords and tenants focus on new strategies for employee safety. Simultaneously, the industry has had to adjust protocols and practices as calls for equity have become corporate priorities throughout the U.S. and the world. This has created a focus on ESG (Environmental, Social and Governance) strategies to analyze and identify risks, health and growth opportunities. It requires participation from everyone ­– landlord to office employee to maintenance technician – to foster an atmosphere of inclusiveness. Most companies will endeavor to create a culture that sustains a positive environment, especially as many businesses are re-entering the physical workspace. Examples of unique benefits come from Brixmor Property Group, a company who owns and operates over 400 retail centers across the country. As a response to the pandemic, they implemented a mental health awareness program, offering free access to licensed therapists for all employees. Brixmor also created personal development accounts to encourage growth through professional and personal training. These accounts have been used for something as adventurous as sailing lessons or as work-focused as Excel classes. Daren Moss, Brixmor senior vice president, explained on a recent ICSC webinar that the company has also created company-wide awards recognizing community service and ingenuity. These, among other initiatives, help make employees feel they are part of a unique and healthy workplace, while encouraging work-life balance. Companies often have mission or value statements that promote diversity and inclusion, but taking action can be more challenging. Brixmor created a leadership council to assist in best practices and behaviors to promote inclusiveness. This has improved diversity in recruitment and hiring. Mental health has also come to the forefront during the pandemic. Lockdowns, isolation, fear and illness have all had adverse...

Do you remember when online shopping first began to disrupt brick and mortar stores? Shops struggled before the pandemic and now they face additional hurdles. Fortunately, small business owners are creative and resilient. We interviewed several small business owners and marketers to learn how they’re staying in business and keeping customers engaged during the pandemic. Re-creating the in-store experience Consultations, semi-private + private shopping Exclusive, in-store shopping experiences were once reserved for the rich and famous. Big-name customers could arrange to shop outside of operating hours or arrange have the shop vacant during their visit. While this is still the case, there are new players on the field. Tiny shops lifted a page from the celebrity handbook. These small stores limit the number of people permitted in the building to create a more private shopping experience. The added benefit is that customers gain more one-on-one attention and support from clerks. “This is a terrific way to permit in-person shopping while building customer loyalty and encouraging good online reviews,” says Edith Peele, owner of Simple Threads clothing boutique near Covington, GA. “We’re limiting the number of shoppers for safety, but it feels more like an exclusive, fancy shopping experience.” Interactive shopping A second opinion can be an incredibly valuable thing. You’ve likely been there: you have two (or more) products that you like. You need to narrow down your options but can’t seem to make a decision on your own. You reach for a second opinion. That second opinion can now be a store clerk on FaceTime or in a chat window. It’s a relatively simple way to encourage safe interaction and a value-add service not found in larger online-only retailers. Make gift preparation a breeze By preparing online purchases as gifts, retailers take three...

Last week, Yardi Matrix hosted three webinars that provided insight on how the COVID-19 pandemic is impacting the self storage, multifamily and commercial real estate markets. Let’s look at the insight on the commercial market, which is extensive. This post continues our first commercial sector recap, which you can read here. Feast and famine in industrial The industrial sector witnesses mixed results from shelter in place mandates. E-commerce is roaring as consumers and businesses go online to purchase necessities without leaving home. Logistics and distribution are regarded as essential services, largely immune to shut down mandates. These niches are among the few still adding jobs. Walmart has posted 150,000 new positions, followed by Amazon with 100,000 and CVS with 50,000. They’re offering enhanced benefits as well as boosted hourly wages. Not all industrial tenants are forecasted to whether the downturn. Small business that occupy multi-tenant industrial spaces could dissolve. Most tenants aren’t positioned for unlimited viability. Multi-tenant, smaller organizations compose nearly 45% of industrial space which will have a notable effect on overall industrial performance. Retail on thin ice with few exceptions Grocers are thriving, but the boon is not expected to last long after the COVID-19 recovery. Before the pandemic, cash flowed away from grocers to restaurants and meal kit delivery services. Social distancing has hamstrung both of those competitors, forcing consumers back to store aisles. Grocers are hiring as well as grocery deliver companies. Such businesses are expected to add 300,000 workers over the next three months. But as the crisis subsides, grocer revenue will return to normal. No matter what, its clear that retail landlords will be hit hard. Social distancing policies have reduced and, in many cases, eliminated transactions at brick-and-mortar stores, which were already experiencing a decline with the...

Developing financially successful shopping centres has become a significant challenge in the face of major threats to the traditional retail business model. The retail experience is shifting from a point of sale to an immersive experience; instead of endless rows of shops, the modern retail centre features restaurants, cafés, movie theatres and a variety of personal services. In response, many retail operators are implementing emerging innovative technologies that can strengthen their static trade and thus compliment and compete with e-commerce. A successful strategy for attracting customers to retail centres arises from first analysing and understanding regional trends including demographic shifts, culture and politics. Utilising that data and understanding it is key to determining a successful revenue generating tenant mix. Centre size and location, along with other factors, will determine the degree to which new technology can and should be implemented. One business-critical element, however, stands at the centre of every successful strategy—data. Retail asset managers and investors are discovering the benefits that business-wide technology platforms provide. Instant access to sales, leasing, prospect information and much more has surpassed both timeliness and the hassle of consolidating data from multiple disparate systems. Furthermore, merchants are keeping pace with a mobile-enabled consumer base by adopting mobile payment and shopping capabilities, and they expect no less as they interact with their retail landlords. Such technology can help retailer centre owners and operators reduce costs, drive revenue streams and increase asset value. Data’s key role Thanks to technological progress, the retail sector is now able to define persuasive offers with the help of big data. Because the retail sector generates more data per month than many other vertical real estate markets, simple tools and tables for gaining valuable insights into retail businesses and trends have become obsolete. Advanced, but...

Imagine an oasis of calm just outside of the bustling city, a place where the community is structured around wellness and a connection with nature. Now imagine that this place has as many fun shopping and entertainment options as a conventional neighborhood– without conventional waste issues. This place exists and it’s called Serenbe. Welcome to Serenbe The New York Times calls the development “a utopian experiment in new urbanism being molded out of Georgia red clay ” about 30 miles southwest of Atlanta. More than 700 residents call Serenbe home. The community is often called together for music festivals, goat yoga, movie nights, wine tastings, and local theater performances. As provincial as it sounds, Serenbe is not a haven for barefoot wanderers and struggling artists. Homes start at $1,400 per month for a 600 square-foot apartment and max out shy of $2,000,000 for a single family home. Those are high price tags for Chattahoochee Hill Country, an otherwise unassuming rural community. With that said, Serenbe is probably the coolest countryside hamlet in the southeast for its emphasis on wellness and sustainability. Conscious Convenience For several years, development focused mostly on residences, often countryside getaways for Atlanta’s elite. Commercial construction has established a presence in the community—still abiding by community virtues—but offering more experiences and conveniences for residents. Four complexes form the hub of shopping at Serenbe. Each has a unique focus such as art, education, agriculture and health. The Mado District is the latest addition with an emphasis on health. One Mado will be a $250 million, 30,000 square-foot mixed-used development that is an alternative to the quintessential strip mall. Tenants will likely include health and wellness specialists such as a chiropractor, massage therapist, acupuncturist, and other holistic practitioners. There are also parcels for...

LONDON – The evolution of the retail store in the face of growing online sales has been much written about, but shopping centres also can’t afford to be left behind in the age of ecommerce and changing technologies. This Retail Week report – produced in association with Yardi – explores how retailers view shopping centres and ways that centres can create an environment in which retail doors not only remain open, but thrive in a digital era. Based on interviews with 50 retail directors responsible for store portfolios – each representing a company with a turnover of between £50m and £10bn – the report finds strong similarities in what retailers want from shopping centres, and reflects changing shopper habits. Key themes are explored around how shopping centres can better support retailers, including expectations about infrastructure for technology and data, as well as how they can attract new entrants. The right mix between retail, leisure and dining is a fundamental attraction, while providing wi-fi is a prerequisite for retailers setting up shop in malls, which has both customer-facing and operational benefits. The future opportunities for shopping centres to enhance their performance, while diverse, are all underpinned by robust data. Decisions are increasingly data-led, and while current platforms – typically management software and spreadsheets – for data sharing have been well-received by retailers, there’s a strong feeling centre owners could provide more information. In particular, they want detail about footfall, dwell time and average spend, to better understand the local catchment and to adapt store space accordingly. Common themes for shopping centre investment over the next 12 months, according to our surveyed retailers, include keeping up with new technology, integrating ecommerce and opening new stores – all of which are elements that new entrants such as...

Video continues to rise to the top of the digital marketing playbook. If you’re skeptical about the power of video, consider that almost 50% of internet users look for videos related to a product or service before visiting a store. And four times as many customers would rather watch a video about a product than read about it. Video content can also improve SEO, increase engagement and boost brand loyalty and awareness. Within the realm of real estate, the industry – from retail to residential to student housing – is finding creative ways to leverage video. What’s clear is video isn’t going anywhere, so it’s time to jump in feet first. Facebook Live offers an interactive, free and highly visible way to engage with an audience. The platform now sees 8 billion average daily video views from 500 million users. With help from social media experts, in-depth tutorials and best practice tips, even the most novice user can become a Facebook Live pro.   Here are five tips to rock Facebook Live: Step 1: Ask permission If you plan to live stream other people, ask for permission before you record them. Keep in mind some conferences and venues may have strict no streaming policies. When in doubt, ask. Step 2: Game plan Some questions to inform your live video strategy: Why do you want to do live video? Who are you hoping to reach? What do you want this audience to do? What will you talk about? How long will you go live for? Facebook recommends 10 to 90 minutes, but even 5 minutes is great. Do what feels right for your organization and your viewers. Where will you go live from? Walk the room and consider reserving a spot in front. Minimal background...

Developing financially successful retail centers is a challenging task anywhere in the world.  Investors and managers involved in retail assets must be sound strategic planners who can successfully assimilate a number of disparate factors, such as demographics, macro and micro economics, as well as cultural and political circumstances.  Rising e-commerce makes a competitive business environment even more acute. Successful strategies require engaging shoppers with the right product, creating a tenant mix that suits geographic and regional trends, and accommodating local culture, demographics, regional economics and other factors.  Many malls are adding themed restaurants and attractions to attract more customers. As consumers start to buy more of their clothing items online, dancing fountains, amusement park experiences, and themed restaurants are almost as important to attracting footfall as an anchor tenant’s spring clothing fashions or new video game boxes. A mall can be regarded as an ecosystem that needs full financial, maintenance and leasing information to be meaningful and easily accessible. Across all markets—the Americas, Asia, Europe, Australia, the Middle East—the tendency toward large malls mean operators must be able to handle large tenant counts. For example, due to the sheer size of the shopping area, instinct and walk-throughs are insufficient for detecting inefficiencies and troubled tenants.  Only reliable data and metrics will serve that purpose. Single Platform Global ‘Glue’ With the retail sector generating more data in a single month than many other vertical real estate markets do in a year, and with investors expecting strong returns for their money, the imperative to store, maintain, manage and utilize retail property data bonds the industry like glue.  These operations are as important as inventory, location and demographics in determining the success of a retail center. As a result, retail owners and operators around the world are turning...

Editor’s note: the following article originally appeared in the British real estate publication Property Week on Nov. 25. Martin Betts is Yardi’s Sales Director for UK and Ireland. Are some shopping centre landlords guilty of thinking their asset is simply a property? They get the tenants in, the leases agreed and the rents start rolling in. But thinking in this way can limit the potential of the asset. For unlike an office block or an industrial unit, the shopping centre presents many different avenues for turning revenue. The unique nature of the mall means there is huge potential for additional revenue generation- something landlords and shopping centre managers need to ensure are managed and promoted effectively. Spaces like the walls are potential advertising spots, mobile phone masts can be erected on top of the buildings, pop-up stands can be used to utilise what would otherwise be dead space within the mall and even car washing facilities in the car park – all of this generates rent for the landlord and maximises space.  Some of the best shopping centre operators have been doing this for years, but there are still way too many that aren’t or are not capturing the data that highlights where these opportunities exist. The UK market is moving more and more to a turnover rental structure, so an even greater prevalence is put on the landlord to drive footfall and entice people to the centre. But this is not easy in such a competitive retail and shopping centre sector, where you may have three shopping centres in close proximity to one another, all vying for the same customers. People will generally choose on the calibre of the shops and the experience they receive. So how do successful landlords and managers attract...

As brick-and-mortar and e-commerce companies continue to fight for consumers’ attention and dollars, today’s customer has a plethora of shopping options at his disposal. Though online sales are expected to reach $414 billion by 2018, according to Retail TouchPoints, the majority of all retail sales still occur in physical stores, pushing companies to try to offer their clients the best of both worlds. Consequently, a lot of companies now use a variety of tools and technologies to attract customers and get them to visit their stores or websites again. Omni-channel retailing Amazon is making a foray into the bookshop business, with plans to open a number of brick-and-mortar bookstores across the country, in order to reach a much wider audience for its products. Expansions such as these emphasize the importance retailers now place on omni-channel retailing, where companies offer customers a variety of ways to shop, whether it’s online shopping through a desktop or mobile device, or the traditional retail store. Often times, a customer will visit a showroom or physical store, then they will order the product online instead, so it’s crucial for retailers to offer both options. Same-day delivery Shipping time is another important factor that customers take into consideration when placing an order. The faster the shipping time, the more satisfied the customer and the more likely they’ll shop again. Amazon is already ahead of the curve with same-day and two-day delivery service, with Sainsbury planning to also launch a grocery same-day delivery service to compete with faster rivals. Fast shipping time is crucial for customers who wish to save time and have their groceries delivered to their doorstep. Chatbots In an effort to come up with new and groundbreaking marketing strategies to attract customers, numerous companies have adopted chatterbots—a new...

Direct-to-door home meal services have experienced record-breaking growth. The past four years witnessed a 33 percent increase in delivery traffic, reports NPD group. This growth presents new opportunities for commercial and institutional real estate. The Catalyst & Growth Potential The growth of prepared meal services comes as a response to public cries for healthier, convenient food. Americans are becoming more health-conscious.  The surge towards healthier fare comes on the heels of seemingly endless bad news: Almost 70 percent of American adults are diagnosed as overweight or obese. Rarely disclosed allergens in foods decrease the efficiency of digestive and endocrine systems. Processed foods continue to make headlines for dangerous ingredients and poor transparency practices. Homemade meals using fresh produce and lean meats are a tried and true step in restoring health. But few adults feel that they have enough time to cook. Adults are willing, however, to pay top dollar for homemade meals cooked elsewhere. Nielsen’s 2015 Global Health & Wellness Survey polled over 30,000 individuals online. Of the respondents, 88 percent are willing to pay more for healthier foods.  NPD reports an increase of 6 million fresh meal deliveries in the past year. The convenience of online orders cannot be underestimated. Users avoid waiting at the drive through or detours to the grocery store during the commute home. User avoid expending emotional energy by talking to another human being. The potential of such convenience is limitless. In this atmosphere, direct-to-door services will continue to grow. Creative Sites The real estate requirements of direct-to-door services vary, based largely on the popularity of the service. A few components appear to be consistent: Mature companies seek out numerous, small sites rather than vast distribution centers. These sites are centrally located to heavily populated areas with easy access...

Two Europe-based grocery chain companies have recently completed their $28 billion merger—a marriage that will have a big impact on the U.S. retail market. Royal Ahold, based in Zaandam, the Netherlands, operates Stop & Shop, Giant, and Martin’s stores in the U.S., while Brussels-based Delhaize operates in the U.S. under the Food Lion and Hannaford brands, the Richmond Times-Dispatch reports. The two companies have joined forces to become the fourth-largest supermarket operator in the country, following in the footsteps of Walmart, Kroger and Albertsons. The new company will operate under the Ahold Delhaize name and will be headquartered in the Netherlands. Plans for the merger first surfaced in June 2015. In order for the deal to move forward, the Federal Trade Commission has required that 81 overlapping stores be divested by the two companies to competitors. As a result, Florida-based Publix is set to acquire 10 Richmond-area Martin’s stores; Weis Markets will take over 38 stores in Delaware, Maryland and Virginia; Big Y Foods will grab seven stores in Massachusetts; New Albertsons will grab one Maryland store; Saubel’s Market will acquire one Pennsylvania store; Tops Markets will buy six stores in Massachusetts and New York; and Supervalu will land 18 stores in Maryland, Pennsylvania, Virginia and West Virginia. The FTC imposed the condition in order to avoid the merger from eliminating direct supermarket competition, which could harm consumers. It is not yet clear whether Martin’s will become Food Lion or vice versa following the merger. However, experts predict that the two brands will continue to operate under the same name. Martin’s is reportedly the number one grocery store in terms of sales in the Richmond area, while Food Lion is one of the region’s largest employers. According to Food Trade News, both Martin’s and...

Advances in technology are giving the retail property sector a helping hand to define compelling offerings through the use of big data. Developing financially successful retail centres is challenging. In fact, it’s widely regarded that real estate companies, invested in retail assets, are among the leading pioneers of strategic real estate management. Successful strategies are born out of understanding the best approach to engage shoppers with the right tenant mix to suit regional trends as demographics change and are impacted by regional economic, cultural and political circumstances. Adapting a retail offering and providing new ways of engaging retailers and consumers while delivering services that enhance relationships, drive down costs and deliver value for owners are undoubtedly key. However, at the very heart of any successful strategy is one, mission-critical element – data. With the retail sector generating more data in a single month than many other vertical real estate markets, the use of simple tools and spreadsheets is redundant as firms struggle to gain valuable insights into retail operations and trends. Business technology is undoubtedly a major driver. Helping provide a solid, error-free foundation to house data is one thing, but the power comes from delivering a seamless, real-time framework that enables employees to analyse the data in such a way to deliver sound retail strategies. In an industry that is so invested in defining compelling offerings through the use of data, has the technology sector risen to the challenge? The most successful retail real estate companies are now embracing the latest technology to support their strategies and the leading software providers are raising the bar. Cloud-based offerings now enable companies to host their data in a single secure database, providing a risk-free environment that delivers real-time access to strategy-shaping analysis to desktops and...

LONDON – Industrial property has emerged as one of the strongest performing asset classes this year, apparently brushing off the threat of Brexit as consumers shop – or rather, click – until they drop. The rise of e-commerce means tenant demand is robust, with record rents being achieved in tightly-constrained urban areas where logistics space is competing with residential. However, occupiers are having to invest heavily in technology. In a continuing series of think tanks, Yardi brought together a panel of experts to discuss these issues in the European real estate market. Panelists: Claer Barrett, Financial Times – Chair Alan Holland, Business Unit Director, Greater London – Segro Richard Croft, Chief Executive – M7 Real Estate Mark Bowden, Partner – Caisson Investment Management Michael Williams, Investment Manager – M&G Real Estate Kevin Mofid, Research Director – Savills CB: The good news is that we’re seeing healthy yields and rental growth on industrial space, particularly in the Greater London area – but is this mainly because so much of it has vanished in the past decade? AH: The pressure on land for industrial and urban logistics is immense, particularly in areas of population concentration where developers like Segro are competing with house builders. According to the GLA, around 700 ha of industrial land has been lost in Greater London as places like Nine Elms, Old Oak Common and the Olympic Park ha ve become residential areas. That’s the equivalent of seven times the size of Regent’s Park – it’s gone and it won’t be replaced. KM: Since 2009, Savills research shows the supply of existing warehousing stock has decreased by 70 per cent. But at the same time, take-up has risen from a long-running average of 18m sq ft per year to 22m sq ft in the...

Editor’s note: The following interview with Aditya Shah, Yardi’s Director for Middle East Operations, recently appeared in Gulf Property magazine and is reprinted here with permission. Yardi Systems, a US-based large asset management and property management software solutions provider, now has more than 1,000 commercial properties, 50 shopping malls and 50,000 residential units using its software in the Middle East. “We have grown 30 percent in the last ten months alone,” says Aditya Shah, Director for Middle East Operations at Yardi Systems, told Gulf Property in an exclusive interview. The company has signed up with Mall of Qatar last month to automate the mall’s property management and accounting system with Yardi Voyager 7S, the company’s new mobile-enabled, label-compatible software as a service property management and accounting platform. Mall of Qatar will have over 5.4 million square feet of built up area, more than 500 retail units, over 100 dining operations, a 5-star hotel and more than 7,000 car parking spots when its construction is complete in the third quarter of 2016. It will host an estimated 20 million visitors in its first year. Since its founding, Yardi has set the standard for real estate software solutions with a combination of responsiveness and technical innovation. In an interview with Gulf Property, Shah detailed Yardi’s activities in the region. Gulf Property: Could you share with us the number of Middle East properties that are currently under management using Yardi’s solutions? AS: Yardi has a broad range of clients that manage a cross section of asset classes that include, but are not limited to, residential office, and retail. There are approximately 50 retail malls, 1,000 commercial properties and over 50,000 residential units that are currently managed on Yardi solutions across the Middle East. These include some of...

The mobile payments war is far from over. In fact, it just got much more interesting since Walmart entered the scene—yes, mega retailer Walmart announced recently that it plans to offer mobile payments to its shoppers. Walmart Pay has launched as a feature in the retailer’s existing smartphone app. That will be compatible with all credit cards, debit cards, and Walmart gift cards. Considering that the company accounts for about 10 percent of the retail sales in the country, the service can potentially pose a challenge to Apple Pay and Android Pay. “Walmart Pay is the latest example – and a powerful addition – of how we are transforming the shopping experience by seamlessly connecting online, mobile and stores for the 140 million customers who shop with us weekly,” said Neil Ashe, president & CEO of Walmart Global eCommerce. Open, Scan, Done Walmart’s payment method won’t be using the near field communication (NFC) technology (adopted by Apple, Android, and other “tap to pay” systems). Instead, it enables payments by scanning QR codes at point of sale terminals in the store. Additionally, the user will have to set a 4-digit passcode (or use Touch ID, if you have an iPhone) to authenticate purchase. Once set up, the user can pay for purchases in the checkout line by selecting Walmart Pay from the app’s “Shop” menu. Here’s a catch: since its system relied in a smartphone’s camera, rather than an NFC chip, it’s compatible with a larger number of devices—Apple added NFC capabilities starting with iPhone 6 and let’s not forget that many lower-end Android handsets don’t support the feature, either. Walmart’s move doesn’t come as a surprise. The company claims it already has 22 million people using its app every month, so building payments into...

If you work in the real estate business, chances are that at some point, someone has tried to tell you that your job is “all kinds of boring.” But most times, they sure are wrong. Not long ago we read a blog post published by one of our clients, Phoenix-based Gary Shaw of Arcadia Management Group. It was the kind of story that reminded us just how not boring the real estate business can be. Gary relayed the tale of what happened when a commercial tenant of his company became delinquent on the rent for their retail space. As a result of the missing rent, Arcadia Management Group essentially “locked out” the tenant, which typically results in a fast remittance of the funds owed. This wasn’t just any retail store, though. It was a high-end tropical salt water fish store, and taking care of the inventory was no small task We’ll let Gary tell you what happened next in his own words: “We were certain the tenant would be able to come up with the capital to cure the default and take back his store. “The real world, unfortunately, doesn’t always follow the ideal scenario. The store owner was truly at an impasse and did not have the capital to cure the default. He made it clear that he was walking away from the fishy business for good. “We pleaded with the owner to continue running the aquarium equipment while we made plans to liquidate – ‘If nothing else, do it for the fish!’ Our pleas went unanswered, and our calls were never returned. Nemo, Dory and all of their friends’ lives were now in our hands. Overnight, we went from property managers to fish store operators and underwater ecosystem caretakers.” Thankfully, this story...

Large retail centers used to be revered for their prestige and variety. Getting to the 2 million-square-foot Sears and Roebuck center in Atlanta, GA was once a pilgrimage for consumers throughout the region. The days of such super-sized department stores are long gone. With the growing popularity of online shopping, brick-and-mortar stores are steadily shrinking. This trend is likely to continue but that doesn’t mean that REITS and owners will see less cash flow from their vast, existing properties. Data leasing, the new frontier, is proving to be a gold mine full of possibilities. CBL & Associates is introducing the Digital Star program at its properties. It is a set of fiber paths, routers, and related infrastructure that is made available to tenants in CBL properties. Three shopping centers are piloting Digital Star this year. “The new space for lease is all digital,” says Mike Harrison, Senior Vice President at CBL. “It’s a whole new way of thinking. It’s in high demand.” The average demand ranges from 4-10 megabytes for most retailers but there are tenants such as Microsoft and Apple that need well over 100 megabytes. To meet the growing demand, CBL has teamed up with Granite Communications to provide data management and services. Together, they offer tenants brick-and-mortar stores with a range of digital capabilities. The duo is constantly thinking on its feet. The need for data will only increase as retailers explore methods in which digital and online tools can enhance the customer experience and improve the efficiency of operations. Consumers motivate the bulk of data demands. Even when they are inside of a store, consumers continue to shop and research online for product reviews, detailed product descriptions, and offers from competitors. In addition to in-store wi-fi, consumers expect increasingly interactive...

Ed. note: The third in a three-part series, our final article on the real estate realities for Detroit, Michigan, as the city emerges from a long period of decline. Read the first installments here (Part 1) and here (Part 2). Walking around downtown Detroit, at many times of day, feels like one has wandered onto a deserted movie set. Historic skyscrapers loom overhead. There are hints of change and progress: work on a new rail line, construction fences around old buildings, for rent signs in windows. What you don’t see, that feels strangest of all, are very many people. At 8 a.m. and 5 p.m., there is foot traffic as employees walk to or from their jobs. A great many of them are wearing Quicken Loan employee ID badges, identifying them as part of Dan Gilbert’s empire. Gilbert’s investment in the city, from real estate purchases – more than 50 buildings to date – in addition to centering Quicken’s headquarters downtown and funding a large portion of the M:1 RAIL line, is ubiquitous. “Dan Gilbert obviously is leading the charge in downtown real estate reinvestment. He’s acquired 52 properties in the last couple of years, for Quicken and various subsidiary companies of his own,” said John Latessa, Senior Managing Director of CBRE’s Michigan operations. The other major property accumulator, the Caesars Pizza-founding, sports team-owning Ilitch family, has been buying up lots and decaying buildings for a new hockey stadium for years. “(Gilbert and the Ilitches) are generating the interest that didn’t exist before. If they weren’t doing this stuff and couldn’t do it on their own, a lot of these other projects wouldn’t be possible,” said Scott Allen, president of Fourmidable, a Detroit-based multifamily property management firm. Rising rents for multifamily Detroit’s real estate...

The demand for sustainable retail properties is growing, demonstrated by an influx in applications at accreditation organizations, top tier rents, and high trade rates. According to Lux Research, green building is now a $260 billion market with retail as one of its most vigorous verticals. Green building certification programs such as LEED for Retail have witnessed an increase in applications. The “LEED in Motion: Retail” report states that more than 8,000 retailers worldwide participate in LEED and more than 1.2 million people experience a LEED-certified retail space on a daily basis. Participating companies include Target, Kohls, Bank of America, and Starbucks, which recently celebrated its 500th LEED-certified store. The transition towards greener retail spaces corresponds with reports that retailers with LEED Gold certification or greater outperform their conventional neighbors. Studies by Nils Kok, Ph.D., executive director of the Global Real Estate Sustainability Benchmark (GRESB) suggests that sustainable office buildings trade at a 13 percent premium over conventional buildings. Green office structures also receive rental rates that are at least three percent higher than their conventional counterparts. “We found that LEED-certified and Energy Star-rated office buildings financially outperform their non-green peers in terms of rental rates and occupancy rates,” says Kok. For new developments, state and federal programs offer subsidies and other incentives to green retailers, helping to raise such projects’ internal rates of return by as much as six percent in less than 15 years. While there are certainly owners who pay top dollar for green retail spaces because they prioritize the environment, financial and social pressure are contributing factors behind the growth in sustainable retail popularity. Publicly-traded REITs face pressure from investors to achieve optimal energy efficiency in order to reduce operating costs and increase returns. Pressures come on a larger scale as well. An...