Seeing the Surge in Retail Leasing: Five New Assignments in Five Months

The velocity of new retail leases is in acceleration mode and we at Levin are seeing big results. Since December, we have added five new assignments in retail real estate to our 95-property portfolio, presenting exciting new opportunities in some of the strongest markets in the Northeast. As retail leasing advisors, we are proud to have been chosen as the new leasing agents for three outstanding shopping centers and as property managers for two others.

Levin’s New Retail Leasing Clients

Holmdel Crossing, Holmdel, NJ: Levin is the exclusive leasing agent for this planned 140,000 square-foot retail development project situated on Route 35, one of the most heavily traveled roads in densely populated and affluent Monmouth County. The property enjoys both excellent visibility and extremely desirable local demographics. The population within a three-mile radius of the planned development exceeds 75,000, with an average household income of $102,862. Our initial focus is on the pre-leasing phase of Holmdel Crossing, with particular emphasis on attracting anchor and junior anchor tenants who will, in turn, drive the remaining tenancy.

According to Michael Cohen, our vice president of leasing, who is heading up the Holmdel assignment, the major goal in the first stages of this new center’s development is “to build value for this property while attracting top-tier tenants.”

Stafford Park, Manahawkin, NJ: This 350-acre mixed-use redevelopment project is located in a prime position at the intersection of Route 72 and the Garden State Parkway in Southern Ocean County. Levin is now the leasing agent for Stafford Park’s retail component, which consists of 400,000 square feet of retail space, with an additional 195,000 square feet (including several prime pad sites) slated for development in the near term. Anchor tenants are Target and Costco. The complex also includes such major retail brands as Dick’s Sporting Goods, Best Buy, Ulta and PetSmart.

Our director of acquisitions and business development, Joseph Lowry, says the assignment reflects Levin’s depth of expertise in third-party retail leasing services. “Our depth of expertise is particularly effective when it comes to spearheading larger developments and redevelopments. In cases where activity at a center may have stalled, we are well-qualified to come in and jump-start a project.”

Eatontown Plaza, Eatontown, NJ: On an ideal site at the busy intersection of Routes 35 and 36 opposite the Monmouth Mall, this 30,000-square-foot shopping center is poised for growth as the retail sector continues to heat up. Its current tenants include Men’s Wearhouse, The Vitamin Shoppe, Leisure Fitness, Beach Bum Tanning and Sprint. Levin is charged with marketing 7,700 square feet of its untenanted space and anticipates an influx of new retailers, who will bring increased attention to this property.

“Eatontown Plaza is a well-located smaller strip center,” notes Lowry. “The owner wanted a firm with a strong local presence involved in leasing the property. They especially appreciated the fact that our in-house construction management group can work seamlessly with our leasing team to handle interior fit-out work for new tenants.”

Levin’s New Property Management Assignments

Our extensive experience in retail property management has been recognized by two new clients who have selected us as their managing agents.

The Grove at Plymouth (formerly The Shops at 5), Plymouth, MA: Our first client in Massachusetts is located in one of the most historic and fastest growing sections of the state. Forty miles south of Boston on Long Pond Road, this 420,000-square-foot open-air shopping center, anchored by BJ’s Wholesale Club, TJ Maxx/Home Goods and Kohl’s, holds a leading position among the dominant retail destinations in a market with strong demographics (average household income $95,840, population 105,800). An average of 60,000 vehicles passes the location daily. Robert Carson, our executive vice president, notes that The Grove at Plymouth is owned by a current Levin client and cites the new assignment as “a prime example of how we expand our business by providing a high level of service to our clients and their assets, and we are ready to manage a client’s new acquisition in a new geography as needed.”

Festival Plaza, Edison, NJ: On Route 27 in the heart of a densely populated trade area, this 151,000-square-foot retail venue has two proposed 10,000-square-foot pad sites for future development, which Levin will also market. Key to Festival’s success as a destination for shoppers from significant distances is its H Mart Supermarket, a leading high-end Asian retail grocery brand. Other tenants in this well-trafficked shopping center include BBQ Buffet, Great Clips and China Trust Bank.

“Festival Plaza enjoys strong positioning in an infill location with excellent demographics,” notes Lowry. “H Mart Supermarket is a very strong anchor for the center. The property was completely redeveloped in 2011; the ownership did a tremendous job with the project. The incorporation of high-end finishes distinguishes it from the competition.”

Will the Surge in Retail Leasing Continue?

What’s ahead in commercial retail leasing? Levin is optimistic. According to Lowry, the retail market continues to gain momentum, particularly in the Northeast, where the bulk of our 95-property portfolio is based. “Regional and national tenants are expanding again,” he notes, “and credit has freed up somewhat for local retailers. As a result, we are seeing a marked increase in new leasing velocity, which is very good news for our clients. We also are seeing stepped-up demand for third-party retail services as landlords focus on repositioning and leasing up their properties.”

Look for news and observations from Levin Management executives in upcoming posts here at Retail Property InSites. Please join us and share your comments about our posts or about your own management experiences in retail real estate.

More Insights from our Fourth Annual Post-Holiday Retail Sentiment Survey

Mobile Tech and Retailing Continue to Meld, Creating Retail Real Estate Trend

In our last few blog posts, we’ve been sharing input from the store managers who participated in Levin’s 2013 post-holiday Retail Sentiment Survey. The Surveys are conducted three times each year and the analysis consistently reveals a depth of insight. In the past two posts, we shared highlights from this Survey, with the spotlight on holiday sales performance, year-to-year sales volume, the impact of December’s weather, in-store traffic, and peak selling periods in the 2013 holiday season – the latter pointing to an emerging retail real estate trend.

This post spotlights store managers’ responses to the continued integration of technology into the retail consumer experience and their plans for leveraging the mobile platform in their own brick-and-mortar environments in 2014.

As smartphones proliferate (well over half of U.S. mobile subscribers are smartphone enabled, with that number concentrated among affluent adults) and as consumers integrate their phones into offline shopping, retailers are jumping on the mobile bandwagon. And they are not overlooking tablets, which are in the hands of one out of three Americans. Store managers in Levin’s portfolio are no exception to this move to mobile, with 54.9 percent of survey respondents saying they will add or increase the use of mobile technology in 2014.

Mobile brings retailers a variety of opportunities for customer service from offering checkout alternatives to obtaining product information and availability to couponing to geo-targeted mobile marketing. It’s fitting that these devices have earned the name “the silent salesperson.” Consumers are using smartphones as a research tool to find products, compare pricing and make purchases. A recent study by comScore/PayPal showed 55.0 percent of smartphone owners are doing so at brick-and-mortar stores, and retailers are beginning to leverage in-store mobile marketing to their advantage. Mobile is an area well worth watching, one that’s certain to impact retail real estate trends in 2014.

Survey Respondents Say the Big Picture Looks Bright

The attitude of store managers participating in our Survey reflects those of mainstream American businesses. The big picture looks solid, they told us. Stronger overall economic growth and greater fiscal certainty is bolstering consumer confidence and ultimately spending. Those factors are mirrored in a corresponding confidence among retailers who are showing a stepped-up interest in retail leasing from national, local and franchise companies across broad categories.

Our next Retail Sentiment Survey will be conducted in late May, gauging mid-year performance. We’ll be sharing the highlights with you here on this blog.

More Insights from our Retail Sentiment Survey

Holiday Sales Exceeded Expectations for Many but Year-to-Year Increase Declined: Outlook Remains Optimistic with Hiring Up, Expansions Planned

Our fourth annual post-holiday Retail Sentiment Survey revealed a depth of input from store managers in our 95 property, 13 million-square-foot portfolio of shopping centers. In the previous post, we shared highlights from this Survey, which is conducted three times each year, with a focus on sales volume and peak selling periods in the 2013 holiday season—the latter pointing to an emerging retail real estate trend. This post focuses on store managers’ feedback on 2013 vs. 2012 performance, volume of in-store traffic, the impact of 2013’s winter weather and the store managers’ optimistic outlook going forward.

2013’s Spike in Sales Volume Fell Short of Previous Year

Despite the fact that more than half the store managers in our Survey (57.3 percent) said their 2013 holiday season sales met or exceeded their expectations, the actual increase in the volume of sales was lower than realized in 2012. Sales volume, as reported by 51.2 percent of our respondents, was the same or higher for the holiday period than in 2012. However, in our 2012 Survey, a robust 65 percent of respondents reported an increase in seasonal volume over 2011. The decline is likely due, at least in part, to the fall off in 2013 holiday shopping traffic as reported by our Survey respondents. Only 49.4 percent of surveyed managers said 2013 traffic was the same or higher than in 2012. In the previous year, 61 percent reported a year-over-year spike in in-store traffic. And that brings us to that in-store traffic stopping Grinch: the weather.

Stormy December and Late Thanksgiving Crimped In-Store Traffic and Sales

Unusually severe December weather brought snow, ice and sub-zero temperatures to the locales of many of our respondents’ stores, keeping would-be shoppers at home, dampening sales and boosting e-commerce purchases. In addition to the weather, retailers got a double whammy with the loss of six shopping days due to a late Thanksgiving. Thanksgiving 2013 (November 28) fell at the latest possible point, delaying the official start of the holiday shopping season. In 2012, consumers had 31 shopping days and five weekends between Black Friday and Christmas Eve. In 2013, they had only 25 days and four weekends.

Optimistic Outlook, Hiring on the Rise, Expansion Plans. Potential Retail Real Estate Trends in the Making

Respondents indicated optimism fueled by an increase in full-year sales and confidence in a strengthening economy. Close to half of survey participants (49.4 percent) reported total 2013 sales equal to or above 2012. Their positive outlook is demonstrated by staffing increases and expansion plans. Over 30 percent (33.7) added staff for the holiday season, up from 26.6 percent in 2012, with 40.5 percent indicating they plan to retain these employees going into 2014. Another retail real estate trend may be in the making in terms of retail real estate leasing, as indicated by respondents who say expansion plans are on the table for 2014.

Annual Survey Spots Retail Real Estate Trends

Respondents Report Surprise Sales Peaks, Black Friday Numbers Dip

Results of Levin Management’s fourth annual post-holiday Retail Sentiment Survey once again revealed a number of emerging retail real estate trends. Conducted three times each year, our Retail Sentiment Surveys poll store managers in our 95 property, 13 million-square-foot portfolio of shopping centers (with most responses reflecting New Jersey trends). The store managers represent the front line of retail activity, and we will be sharing our findings in several upcoming blog posts.

To begin, here is what our managers told us about their 2013 holiday sales and their strongest selling periods.

2013 Holiday Sales Exceeded Expectations; Timing of Peaks Shifted

For 57.3 percent of the store managers in our Survey, holiday sales brought cheer. Over half, or 57.3 percent of responders, said their stores performed at the same level or better than in 2012. The big surprise, many managers told us, was the timing of the peaks in sales volume. The high point for 26.9 percent of the retailers occurred not on the much-hyped Black Friday, but rather in the middle week of December. That period saw the highest volume of holiday sales, while only 15.4 percent cited Black Friday weekend as their top time.

What’s behind this shift in timing, and is it here to stay? The Black Friday fall-off may have something to do with retailers’ aggressive pre-Thanksgiving promotions (in fact, 12.8 percent of our respondents reported that their holiday sales peaked before the Thanksgiving/Black Friday weekend). Looking ahead, we suspect the idea of the early push could re-shape the holiday sales calendar. Early promotion is something retailers are likely to repeat in 2014, when once again Thanksgiving comes late in November, cutting the number of days in the traditional holiday shopping season.

Another unexpected peak, reported by 11.5 percent of the managers in our Survey, occurred in the week between Christmas and New Year’s, which more than doubled the activity for that period in 2012. The increased popularity of gift cards may be the likely driver of this change. Data from the International Council of Shopping Centers supports this possibility, with a report indicating that 2013 gift card purchases represented a record 23.7 percent of total annual holiday consumer purchasing. Gift card recipients, we are assuming, used their pre-loaded cards to take advantage of post-Christmas week markdowns. With the exploding popularity of gift cards projected to continue into 2014 and beyond, the post-Christmas week may assume a new prominence in the holiday sales cycle and new opportunities for retailers. It’s a watchable trend in retail real estate.

Look for more insights from our 2013 Retail Sentiment Survey in future posts on this blog. Click here to see a full press release about the results.

Retail Property InSites

Welcome. Retail Property InSites is our new blog about the retail real estate industry. Our focus will come from our activities behind the scenes and in the field, our six decades of experience and our owner’s approach to serving the retail real estate industry.

 

Levin Management is uniquely positioned to provide perspective and insight. Our portfolio includes millions of square feet of shopping centers with supermarkets, department stores, and local and regional tenants. Our properties are based in New Jersey, New York, Pennsylvania, Massachusetts, Virginia and North Carolina, and we are consistently targeting new geographic areas in the Mid-Atlantic and Northeast regions.

 

Responding to a variety of retail and economic climates, our blog will highlight the opportunities that come with change – strategies for repositioning, retenanting and renovating retail properties as well as incorporating new designs and technology in the Internet age – and other areas that have become particularly vital for today’s institutional and individual property owners. We will focus on neighborhood, community, lifestyle and power centers as well as enclosed malls, street retail, downtown stores and mixed-use properties. Our senior management and professionals in the field will offer expertise in leasing, property management, accounting, construction management and marketing. Finally, we will tap into tenant perspectives revealed through our Retail Sentiment Surveys, which we conduct three times each year to assess industry trends and sales performance.

 

We look forward to having you join the discussion. Please share your reactions, respond to our comments, and highlight your ideas and experiences with us as we continue our journey in an ever-changing retail real estate and business climate.