Crunkleton’s Retail Team Shares A Recap of ICSC 2018

Recently, two of our brokers traveled to Las Vegas to attend the annual International Council of Shopping Centers (ICSC) conference in Las Vegas. Anusha Alapati and Zac Buckley specialize in retail leasing here at Crunkleton and took the opportunity to share a recap of the event and discuss all major updates affecting the retail leasing industry.

RECon in Las Vegas is the largest commercial real estate conference in the world focusing on deal-making and the discovery of new, exciting concepts. This year, an estimated 37,000 retail specialists and industry leaders met for the annual three-day event to showcase trends in the market. Despite what one may hear in regard to concerns about the uncertainty of retail, the conference was packed with attendees, fresh ideas, and a positive atmosphere. It is clear that the retail real estate industry is going through major changes, many of which will affect the face of retail and the shopping experience for years to come.

Here are a few key takeaways from the event:

Restaurants are Becoming Anchor Tenants

Historically, restaurants were considered an added amenity in shopping centers and were limited in proportion of the property—mainly due to the parking requirements and the inherent issues involving prep and disposal of food. Now, restaurants are often considered the anchor tenants of developments, occupying 20-40 percent of shopping centers compared to 10-15 percent ten years ago.

Landlords now consider restaurants the ideal tenant because they are historically strong traffic drivers to centers, meaning guaranteed regular customer visits. It’s interesting to watch restaurants themselves shift to providing experiential elements: unique aesthetics, Instagram-worthy food, communal seating, and other interactive features that millennials crave.

Experiential Retail is Key

Retailers have to adapt to remain successful and competitive in the e-commerce era. However, customers are still searching for social and experiential elements, which can typically be found in visiting the physical store. Retailers are recreating stores to provide one-of-a-kind experiences, such as classes, events, demonstrations, etc.

The overall mindset is shifting from simply moving a product to developing an experience. It’s clear that today’s customer needs to feel as if the store is adding value beyond simply providing the merchandise. Landlords are also getting into the experiential game by backfilling vacant spaces with entertainment concepts and using vacant land, not for another building, but for a park, playground, putt-putt, etc.

Pop-Ups to Test Concepts

Pop-up locations are gaining popularity in developments due to smaller, local retail brands that are looking to grow. With the rise of local vendors from Etsy, Instagram, and Shopify, more concepts want to experiment with brick-and-mortar but are hesitant to make a large investment. Pop-ups allow these retailers to test out their concept or idea in a brick-and-mortar environment before entering into a longer-term lease. The landlords benefit because pop-up tenants create excitement and something different regularly for the development.

If properly curated, pop-ups can draw more traffic or new traffic to the center, which in turn creates additional traffic for the permanent tenants. In many cases, pop-ups are so pleased with the turnout they decide to open up a brick-and-mortar location.

Online-only Retailers Opening Physical Stores

Although retail has become increasingly digital, most shopping still takes place in stores. Online-only retailers are opening brick-and-mortar stores to interact with their clientele and to enhance the customer experience. For example, Warby Parker and Bonobos, both historically online-only retailers, opened physical stores so customers can actually try on products. This allows them to focus on customer service over inventory management.

Going Local

Lastly, in speaking with landlord and developers from across the country, one thing was clear: the make-up of tenants in their developments are becoming more and more local. Typically called “mom-and-pop” retailers, these local concepts and owners are becoming the backbone of successful shopping centers. Less and less focus is being placed on large, national “credit” tenants as landlords strive to credit a strong tenant mix that appeals to all types of shoppers in their trade area. Local tenants often bring a fresh look, brand, and experience to developments that national retail can’t provide. We believe this trend will continue into the foreseeable future.

For more information on ICSC, be sure to visit the official website here. What changes are you noticing in the retail industry? Let us know in the comments!

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Zac Buckley
VP of Leasing
Crunkleton Commercial Real Estate Group
ZAC@CRUNKLETONASSOCIATES.COM

 

Anusha AlapatiAnusha Alapati
Associate Broker
Crunkleton Commercial Real Estate Group
ANUSHA@CRUNKLETONASSOCIATES.COM

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Must-Know Commercial Real Estate Terms: Take Two!

In the past, we have shared with you some of the most important and frequently used terminology to be aware of when leasing your first commercial space. Today, we want to expand that knowledge and give you a new list of must-know terms that will help you plan, negotiate, and execute your commercial real estate deal with success.

Here are some of the most common terms and classifications used in commercial real estate leasing:

1. (FF&E) Furniture, Fixtures, and Equipment

FF&E is the Furniture, Fixtures, and Equipment necessary for a tenant to operate their business inside a landlord’s premises. For office properties, this generally consists of desks, computers, copiers, etc. In restaurant spaces, it typically includes tables and chairs, coolers, vent hoods, kitchen equipment, and the like.

Tenants are usually allowed to remove their furniture and equipment upon vacating the space as long as they vacate in good standing with the landlord—which means having met all of their lease obligations. However, fixtures that are permanently attached to the premises are a different matter, as they are now considered part of the property.

For example, the vent hood and cooler are generally considered to be permanently attached fixtures in a restaurant space because removing them can cause damage to the property; therefore, these need to be left inside the premises when the tenant vacates.

A broker can help you determine which items will fall into the FF&E category.

 2. Building Classification

Searching for the perfect space can be a daunting task. But letting your broker know what you are looking for ahead of time will help speed up the process. Building class is a great way to get the conversation going. But how do you determine which one is right for you?

  • Class A – If you’re looking for the highest-quality building with well-designed, above-average materials and many amenities, then Class A is for you. Many prestigious tenants seek out this class of property because they are typically in the best location and well maintained.
  • Class B – Though they aren’t outfitted with as many amenities as Class A spaces, Class B property offers very useful space and a functional layout. Class B buildings are, more often than not, older than Class A, but they are still very well maintained.
  • Class C – Class C is usually the oldest space in the classification system and has fewer amenities available to tenants than Class A or B. Lessees can expect average to below-average maintenance and management, and average mechanical, electrical and ventilation systems. Cost for these spaces are usually on the lower end.

Still have questions about which building class is for you? Contact our brokers at info@crunkletonassociates.com.

3. Maximum and Minimum Contiguous

Maximum Contiguous space is the largest divisible area allowed in a property. For example, multiple spaces or suites on the same floor or connecting floors in the same building may be combined to meet the tenant’s needs. The amount of space that can be combined is the maximum contiguous square footage.

Minimum Contiguous is, as it sounds, the smallest divisible area allowed in a property.

 4. First-generation vs. Second-generation Space

This is a fairly easy one to define. Second-generation space, also known as “relet” space, is existing space that was previously occupied by a tenant.

First-generation space means that the space has never been occupied.

Knowing the generation status of your space can help you determine whether or not you need to consider build-out and create a more accurate timeline for when you can occupy the space.

Be sure to ask your broker if a first or second-generation space will be the best fit for your future plans.

5. Work Letter

An important part of commercial real estate leases, a work letter outlines the responsibilities of the landlord and tenant when it comes to improvements that are necessary to prepare the leased space for occupancy.

The letter may include items like a list of space improvements, timelines for the projects, and contractor-related information. The work letter is often part of the final lease document.

Have questions about searching for or leasing a space? We are here to help you reach your goals. Contact us at info@crunkletonassociates.com!

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haley_squareHALEY CLEMONS
MARKETING COORDINATOR
CRUNKLETON COMMERCIAL REAL ESTATE GROUP
HALEY@CRUNKLETONASSOCIATES.COM

Development Updates: “Times Plaza” & “Williamsburg Plaza”

There’s a lot going on in Huntsville in terms of development. In fact, an article recently released by al.com shares current U.S. Census figures that show Huntsville metro is still growing at a fast pace. We are always excited to be involved with this growth and help talented businesses become a part of the Madison County community.

As promised, Crunkleton will bring you updates on the progress of projects that we have already announced, and we have two for you today.

Read on below to see the latest from “Times Plaza” and “Williamsburg Plaza”!

Times Plaza

When driving past the old Huntsville Times site off the Parkway, you may have noticed the new sign that showcases renderings of the completed “Times Plaza” development.

We are thrilled to share the latest renderings of the project with you so you can see what’s coming. Check it out!

Times Plaza is the official name of the development that will be situated at 2317 South Memorial Parkway. It will be a mixed-use retail/office development that will house multiple exciting tenants including restaurants, boutiques, and more.

(We have a tenant announcement coming very soon, so check back here!)

Click here to see details on the property.

Williamsburg Plaza

Last November, we announced the addition of a new 8,200 square foot development coming to the corner of Highway 72 and Nance Road: Williamsburg Plaza. The site includes two confirmed tenants—Bank Independent and Aspen Dental.

As an addition to one of the city’s busiest retail corridors, it’s easy to see the development’s construction progress when driving by. Walls are up, and passersby can now make out the roof of the Colonial Williamsburg-style Bank Independent location.

According to the development team, “Construction continues at Williamsburg Plaza on the corner of Highway 72 and Nance Road. For the most part, the weather has cooperated and plans are on schedule. Williamsburg Plaza expects tenants to open up during the 4th Quarter of this year.”

Click here to see details on the property.

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Make sure you’re staying on top of the latest trends, newest developments and hottest new stores in Huntsville by subscribing to our weekly blog updates!

haley_squareHALEY CLEMONS
MARKETING COORDINATOR
CRUNKLETON COMMERCIAL REAL ESTATE GROUP
HALEY@CRUNKLETONASSOCIATES.COM

5 Office Amenities That Boost Productivity And Employee Satisfaction

Many people are familiar with the perks that come your way when working for a company like Google. The unique office amenities offered to employees have been the topic of much discussion on respected websites like Business Insider, Forbes, and many others.

Let’s face it. Who doesn’t love the idea of adding relaxation rooms, breakfast bars, on-site gyms, and a team of massage therapists ready to relieve the daily stress of office life?

But adding amenities like these may not work in every business setting. While some companies may benefit from incorporating an arcade room—like at the LinkedIn headquarters—others only need to focus on the amenities that will have a positive impact on their bottom line. This is different for every office, and something a broker can help you determine.

Many of these “transformational office amenities”, as Emerging Trends In Real Estate calls them, can be key to boosting office morale, retaining existing employees, attracting new talent, and lowering the overall stress within your organization.

When considering updates to your own office space, or when searching for a new one, be sure to take a moment and ask yourself what amenities you will need in order for you and your team to perform their best.

To help with your brainstorming, here are some of the most requested office amenities according to National Real Estate Investor, Emerging Trends In Real Estate, and the brokers at Crunkleton.

1) The Internet of Things

The Internet of Things refers to the network of physical devices, electronics, software, and connectivity options within an office environment. In the commercial real estate world, the availability of efficiently operating systems is greatly affecting the leasing game and will continue to do so in the future.

It’s no surprise that access to fast, reliable Wi-Fi made it to the list of most requested amenities. Simply put, employees are looking for the freedom to walk about the office space/building and be able to complete their work in a number of settings—like the break room, cafeteria, or rooftop lounge. Offering reliable Internet means providing more freedom and convenience.

Technology such as energy efficient glass that adjusts for heat, glare, and daylight is considered a part of this category. Streaming music and mobile device connectivity to office tools are also important components to consider when deciding on your own Internet of Things for the office.

2) Dedicated Creative/Brainstorming Spaces

In today’s society, many jobs can be intellectually taxing and/or require high amounts of attention and creative energy. We saw the demand for additional creative spaces come along when Millennials began to enter the workforce, and this trend isn’t going anywhere for a while.

Companies like Beats Electronics headquartered in Culver City, California took brainstorming to the next level by creating entire rooms with whiteboard walls. AppNexus also came up with a unique way to get its employees’ creative juices flowing by incorporating a “poetry room.”

Some businesses even introduce elements like hammocks, basketball hoops, or video game systems for employees to use when on break or stuck in a creative slump. There’s no set way to execute the perfect creative/brainstorming space. The possibilities are endless.

3) On-Site Fitness Centers

Perhaps one of the most effective tools used to retain and attract new talent is the incorporation of on-site fitness centers. According to Athletic Business, a 40-year old publication dedicated to the sports and fitness industry, corporate fitness facilities “increase productivity, improve employee morale, and decrease absenteeism.”

Many large companies such as Unilever went so far as to create a “Wellbeing Zone” where employees can opt for activities like yoga, massages, and stretching. Google, on the other hand, added its famous “nap pods” as a place for employees to recharge.

Whether it’s in the form of adding a treadmill and some equipment in a dedicated area or creating a space that encourages mental wellbeing, investing in employees’ health and wellness is a highly requested amenity that has been shown to provide numerous benefits.

4) Access To Food Options

According to National Real Estate Investor, many employees are requesting access to better food options when at the workplace.

When searching for an office space, it’s always important to consider what food/coffee/beverages your company will have quick access to. This need for convenient food options has led businesses to relocate to areas where food choices are more plentiful. In some cases, companies are adding “dedicated food truck days” where employees can try out lots of local grub near the office.

With the rise of multi-use developments that incorporate office spaces, it’s becoming easier for tenants to provide their employees the food options that they desire.

Rooftop lounge at 315 Franklin Street in Downtown Huntsville.

 5) Rooftop Lounges And Outdoor Areas

Recent studies have been conducted that seek to determine the impact that physical office environment has on employees’ wellbeing.

The Human Spaces report into The Global Impact of Biophilic Design in the Workplace stated in 2015 that “employees who work in environments with natural elements report a 15 percent higher level of well-being, are 6 percent more productive, and 15 percent more creative overall.”

Click here to read the official press release on the study.

This may be the reason so many workers are seeking office spaces with dedicated rooftop spaces and outdoor areas where they can decompress and reconnect with nature.

What office amenities do you find the most helpful and/or necessary? Let us know in the comments below! If you have questions about office amenities, call Eric St. John at 256-536-8809, or email eric@crunkletonassociates.com

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Make sure you’re staying on top of the latest trends, newest developments and hottest new stores in Huntsville by subscribing to our weekly blog updates!

haley_squareHALEY CLEMONS
MARKETING COORDINATOR
CRUNKLETON COMMERCIAL REAL ESTATE GROUP
HALEY@CRUNKLETONASSOCIATES.COM