Re-Inventing the Retail Center

By | August 27, 2015

The future of the traditional U.S. shopping mall (as many of us remember them growing up) is changing.

Ask anyone over the age of 50 what a shopping mall looked like when they were growing up – they would tell you about getting dressed up with the family to visit the department store, eat lunch, and maybe visit Santa or see a parade. Large department stores thrived (i.e., Sears, Roebuck and Company, May Company, and Higbees) since competitors like Home Depot and Lowes weren’t saturating the market yet, making department stores the place to go for your household goods.

Talk to anyone between the ages of 35-50 and their memories may be a little different. Malls became the place to hang out after school – food courts replaced restaurants as the “new” trend and movie theaters started getting bigger and better. Department stores like Dillards, Kauffmans, and JC Penney faced competition from growing retailers like Target and Wal-Mart, but were still going strong enough to hold their own.

Fast forward to today. The landscape for the traditional indoor mall is evolving and many commercial retailers are looking for more creative ways to market their space to keep up with the insurgence of the mixed-use outdoor malls and shopping strip centers that are replacing the old traditional malls in many cities throughout the U.S.

The consequences for not being able to keep up with the changing trends in retail are all too obvious for some cities. In fact, a photographer recently gained notoriety as his photos of abandoned indoor shopping malls made national news giving viewers a look at what has happened to many once-thriving shopping malls, now deserted and left as eye sores in many local communities.

randall mall

Randall Mall – North Randall, Ohio. Photo by Seph Lawless

According to a recent panel discussion at the International Council of Shopping Centers (ICSC) annual RECon convention, the retail center of the future will have to do more than just offer stores to shop in. Panelists at RECon agreed that tomorrow’s shopping center will have to entertain customers, giving them an experience that includes social-media, green spaces and areas for entertainment.

“Malls will have to evolve into destination “third places” akin to Apple stores and Starbucks shops if they expect to thrive, said Bob Debbas, CEO of CrowdT, a crowdfunded online apparel seller. “They will have cooking classes, more fashion stores, more experiential eating places, and features such as indoor skiing, like in Dubai.”

An example of a thriving outdoor mixed-use mall includes the Stark Enterprises owned Crocker Park, located in Westlake, Ohio (just west of Cleveland). The outdoor project encompasses 12 city blocks and features a mixture of internationally known retail stores, office buildings, restaurants, luxury apartments and homes. There is a movie theater with stadium seating on site, as well as a kid-friendly splash park, a larger than life chess table, and live music. The center attracts the likes of young folks who want to hang out, as well as the families who can come and spend the entire day.

crocker park

Crocker Park – Westlake, Ohio. Photo: Stark Enterprises

Likewise, Ann Arbor-based McKinley Inc., whose slogan “Live, Work, Shop, Play” encompasses the characteristics of the modern shopping experience, owns several thriving mixed-use retail centers. The McKinley Town Centre-Liberty features a redevelopment with office space and retailers like Bar Louie, American Apparel, Starbucks, Potbelly Sandwich Works, and CVS.  The center is located on a main corridor that connects downtown Ann Arbor and the University of Michigan central campus, making it appealing to the young professionals who wish to have their office, residence and shopping all within walking distance from each other.

mckinley

McKinley Town Centre-Liberty – Ann Arbor, Michigan. Photo: McKinley, Inc.

But the traditional U.S. Mall isn’t dead just yet. According to ICSC, the occupancy rates of U.S. malls hit 94.2 percent at the end of 2014, their highest level in 27 years. ICSC says the increased traffic to the thriving malls is due largely to the closing of the weakest ones, combined with a recent uptick in retail sales.

Like any business, change is inevitable. Only time will tell which changes for the U.S. mall will be the lasting ones.

What do you think about the changing landscape of the U.S. mall? Tell us in the comments section below.



Is Too Much Connectivity Actually Hurting your CRE Business?

By | August 25, 2015

Today every commercial real estate (CRE) company connects with the world using multiple methods — by cell phone, texting, emails, social media, blogs etc. Theoretically this should have made our lives much easier and increase productivity. After all, we operate globally and can be reached anywhere, anytime, 24 hours a day, 7 days a week, and 365 days a year.

However, is more always better? And how much is too much?2shutterstock_276241025

CRE is one business that often relies heavily on building relationships with partners, architects, contractors, tenants, financiers, government and city officials etc. Recent findings have shown that the actual quality of the relationships between people is diminishing fast. We have greater accessibility to business partners, customers, clients and colleagues, but the quality of the communication is decreasing as its quantity increases.

Traditionally, business folk like to size up their business counterparts and the face to face meeting was the best way to get a feel for each other. This has been useful, particularly when large amounts of money are involved and the business deal is complex and multi-layered, as is the case with many commercial real estate deals.

However, it seems that the electronic “shotgun approach” is now widely used. Today, we use every tool at our disposal to connect all the time and somehow we expect something will “stick”! The concept of using communications technology as just a tool is being lost. To paraphrase Marshall McLuhan, “the medium is becoming the message!”

Perhaps a more measured, surgical approach would actually deliver better results and be more effective?

A thorough evaluation of your communications strategies, policies and technologies employed could potentially save corporate overhead costs. Clear, simple policies and streamlined procedures would help improve personnel performance.

A number of key questions should come to mind when evaluating your corporate strategy:

  • How much time is wasted constantly checking all forms of electronic messaging? There is no doubt that having to constantly monitor and answer multiple channels is time consuming.
  • What policies and strategies are currently in place with regards to corporate communications?
  • What is really necessary to perform your business activities?
  • Is any particular type of communication becoming a distraction, taking away from real core business?
  • Is BYOD in the work place a corporate blessing or a major headache
  • What are your clients, partners and business counterparts utilizing?
  • Does your company really require the latest “gizmo” or fad that has just come out?
  • What are the quantifiable business benefits of using a new technology?
  • How much will this cost? — time to implement, new infrastructure, training etc.
  • Are there any added security risks?

Although modern methods of communications are invaluable tools to CRE companies, striking the correct balance between overload and effectiveness is a key corporate success ingredient.



MRI Provides Opportunities for Students

By | August 20, 2015

There are many reasons why students are encouraged to intern during college. Internships are a great way to try out a job for a set period of time, which is advantageous for students who are deciding on what kind of work they might like to do. Internships can also

Brennan Karaba

Brennan Karaba

help students gain valuable experience in the workforce—something that future employers are almost certain to look for.

MRI Software kicked off its summer internship program in June, with students interning in almost every department.

“Even though I studied it in school, I still wasn’t quite sure if accounting was going to be a great fit for me,” remarked Brennan Karaba, who is interning in the Finance department. “This internship has really helped to confirm my choice.”

Jeff Wolf

Jeff Wolf

But interns at MRI have gained more than just valuable work experience.

“I’ve made a lot of friends,” said Product Development intern Jeff Wolf. “A lot of the guys from PD hang out after work. We get a lot of work done, but the atmosphere is really laid back.”

When asked if they would come back to work full-time at MRI, an overwhelming amount of the interns said “yes.”

Emily Mracek

Emily Mracek

This is a pretty common answer. According to the National Association of Colleges and Employers’ (NACE) 2009 Experiential Education Survey, 83.6 percent of interns who were offered full-time positions accepted.

“If MRI offered me a job after college, I would definitely take it,” said Emily Mracek, who is interning in the Sales department. “It’s just such an inviting workplace.”



7 Winning Strategies for Scenario Modeling Using Your Commercial Real Estate Data

By | August 18, 2015

Generally, the analytical tools that are commonly used by many CRE companies, like Excel, are cumbersome and not powerful enough to meet today’s requirements. Some companies have stretched Excel as far as it can go as an analytical tool.

External Excel based models lack flexibility and cannot easily be modified to answer new questions and evolving conditions. In fact managing “what-if” scenarios and getting answers to complex questions is close to impossible to obtain, if at all. Successive running of multiple scenarios against data can often take days or even weeks. To devise, build and operate these models is a huge cost in labour and effort.
New Financial Modeling and Portfolio Management solutions allow users to overcome these inefficiencies and shortfalls by providing the power and flexibility to cater to all situations. openingday

The calculation, consolidation and reporting engine should be adaptable to deal with:

  • All varieties of asset types in any combination
  • Country and regional valuation calculation methodologies and differences
  • Any view or slice of the portfolio, fund or individual property for any given time frame (past, current and forecast periods) and in any combination

The Analysis and Reporting should allow:

1. The integration of portfolio, debt, valuation and fund management into a seamless system
2. A full portfolio management position picture

  • Allowing drill downs to the lowest levels — to individual leases, units or properties
  • Allowing full consolidations to the highest levels

3. At a glance reviews of Key Performance Indicators of debt positions at both the individual contract level or at the consolidated portfolio level

  • A review in minutes versus the traditional one week a month marathon

4. User defined “what-if” scenarios and financial modeling against any combination of loans, properties, funds, valuation methods or an entire portfolio for any given time frame including

  • Side by side comparisons of different scenarios and different versions
  • Sensitivity analysis of assumptions

5. Ad hoc reporting capabilities — not just reporting at month or period ends but at any point in time whenever it is needed at a consolidated or detail level
6. Exception reporting – on potential funds over/under allocation and utilisation of capital resources amongst others
7. Project and forecast debt and cash flow requirements at any level

A successful and effective Financial Modeling and Portfolio Management system delivers accurate information, to the right people, at the right time. This magnifies and leverages the power of the information, delivering increased value and improved productivity, not to mention that good property data can transform a company and drive its competitive edge.

Huge operational efficiencies are also realized through the standardization and streamlining of processes, and the stress-free access to critical information by users throughout the organization.



Empty Warehouses Make Elegant Apartments

By | August 13, 2015

What do you think of when you hear the words “converted loft-style apartment?” Bohemian artists? Inexpensive housing for younger adults? For those property owners who are willing to invest in renovation, a word that should come to mind is “profit.”

More and more renters are seeking the character that loft-style apartments are known for. Exposed brick walls, high ceilings, hardwood floors, and even ceiling ducts pair perfectly with modern and eclectic décor. Certain types of renters are drawn to the non-generic, and the imperfections of loft-style apartments, converted from building like warehouses, are actually appealing.

Apartments like these are “rust-belt chic,” and can play an important role in the revitalization of Midwest cities like Cleveland, Ohio. In an article by cleveland.com, Michael Fleming, the executive director of St. Clair Superior Development said “the existing loft homes are particularly appealing to younger people, a demographic the city has had success in attracting.” warehouseapartmentshutterstock_49517617

Some apartments are even advertised as “live-in workspaces” and rented exclusively to artists. This type of housing can help to grow the arts community in certain neighborhoods.

Renovations, though, can be a challenge. Often times, warehouses do not have the same plumbing as residential properties, and the unconventional layouts can be difficult to work with. Still, the old notion that one must spend money to make money might ring true for those interested in the conversion. Even in smaller cities like Cleveland, some converted one bedroom apartments rent for close to $1200.

Good for cities? Good for property owners? In places where residents are invested in revitalization, warehouse-to-residential apartments just might be both.



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