Effective Property Marketing

Posted by Rickey Hayes on November 1, 2010 in Blog | No Comments

The following article was posted in ICSC’s online weekly magazine.  The article clearly defines why communities and land owners need to get away from generic demographic information and the run of the mill property descriptions and hire a professional to market their communities. Every community has a unique story, every market has its own quirks that make it desirable with today’s specialty or niche retailers and restaurants. Retail Attractions, LLC can help you to effectively market your property. We can help:

October 29th, 2010
Vol. 15 No. 43

Tell a story if you want to land that lease, conference told

In this market so favorable to tenants, a leasing agent is likely to find the job to be as much art as science. “It’s less like deal making and more like selling,” said Joe Rando, president of Trade Area Systems, at ICSC’s Pathway to the Future conference. “You need verified data with context and insight.”

John Breitinger, vice president of retail investments and development at United Properties, said he sometimes has to function as an assistant to his leasing team. One key part of the firm’s strategy is to offer potential tenants more than the basic information about the property and market under consideration. “Get away from the standard marketing package to create differentiation,” he said. “Most leasing materials include a site plan, an aerial and some bullets of information. They should include market potential, competitive environment and an explanation of why there’s an opportunity here.”

Use as much data as possible from various sources, but be sure to verify the maps and statistics yourself, said Rando. “There’s not one commercial data service that won’t embarrass you at some point or another,” he said. Breitinger said United Properties usually hires a consultant to study a property before sending the leasing team into the field to verify.

The agents grade the properties they tour and then discuss the scores, said Breitinger. “You need to do the work you can’t do from a desk,” he said. “Touch every vacancy, look at every new deal – the tour provides a clear-eyed assessment of the relative value of these properties.”

Above all, agents can seal the deal by telling a story, he said. “Emotion wins over facts, so give them a context. Get the credibility to advise and not broker. Capture the details. Our guys carry digital cameras all the time now. Words, photos, numbers – what is your value proposition and how do you explain it?”

It is necessary to give the team proper incentive, said Breitinger, especially when a center is almost fully leased and brokers tend to shift their attention to other properties. “The cash flow that comes from that final few points of vacancy is very important,” he said. “You may have to offer them more reward for the final lease-up.”

The newest addition to the Retail Attractions family

Posted by Rickey Hayes on October 12, 2010 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

Retail Attraction’s newest client city is McAllen, Texas. McAllen is the core city of the entire Lower Rio Grande Valley and set at the epicenter of a very dynamic and growing retail market that is fed by an affluent and very diverse population. McAllen is the sixth hottest retail market in the country and not only serves as a massive regional trade area in South Texas, but also an international market of consumers streaming in from Mexico just a stone’s throw away across the Rio Grande.

McAllen is home to almost every national retail tenant in the country, most of whom have multiple sites in the area. So why would McAllen hire Retail Attractions to assist in the city’s efforts to recruit retailers to the market? I’m so glad you asked! The City of McAllen is indeed a retail paradise. But the city administrators know that in order to stay on top of the very competitive and lucrative retail trade in the area they have to pull out all stops and aggressively market their city to the next level of “destination” retailers. City officials understand that retail offerings in a market have a direct effect of the overall quality of life in a community.

Becoming a “world” class city is a very competitive game these days. Cities all over the country are aggressive in their marketing efforts, and forward thinking, pro-active cities are always working to gain market momentum and to stay ahead of the competition. Keeping your community on the “short list” takes careful planning, determination, hard work, and a refusal to settle for mediocrity.

Whether your city is large or small does not matter. Cities are either growing or decaying. There is no middle ground. Focused economic development strategy is a must for forward thinking cities. Maximizing strengths and minimizing weaknesses is key to successfully moving cities into the future. Hiring Retail Attractions puts a seasoned, well qualified team of experts to work for your community. With a direct hand in facilitating retail development in our client cities over the past three years, Retail Attractions is ready to bring our extensive network of relationships to work for your city.

Retail Attractions is very honored to represent the City of McAllen, Texas and all two dozen of our other client communities in Oklahoma and Arkansas.

If you build it, they will come.

Posted by Rickey Hayes on August 24, 2010 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

If you build it, they will come. That might have been true a few years back, but not in today’s market. Gone are the days of speculative development where investors would develop land or build storefronts with no formal commitment from the end users of the finished product. Today, no one will commit without a signed contract sealed with a drop of blood from both parties.

With spec development, the builder anticipates that a demand exists or will form for the product when it is put on the market. In the 2000s when retailers were expanding at unprecedented rates, that wasn’t a bad bet, but with the current economic climate, investors need a reason to stick their necks out. Developers need guarantees that they will have tenants to fill their spaces.

Not only are developers wanting guarantees, they are being more cautious about the size of the development. It takes a very special community to justify large scale retail development projects like those you saw emerge from the retail boom of the 2000s. Most cities have no chance of having this type of retail center locate in their community because there isn’t retail growth to support this type of center in most cases. What you will see is smaller developments that are anchored by a major retailer. This model has proven successful because everyone benefits: banks are willing to finance it, communities can support the retailers and cities thrive on the added sales tax revenue.

However in this economy, these deals will not happen without public-private partnerships and convincing incentives. Every retail opportunity has dozens of communities competing for a chance, and the community that offers the best deal will come out on top. Cities that are not willing to work with retailers and share the burden of development will not get the deal.

Retail Attractions has years of experience working with communities, developers and retailers to find common ground and get things done. Our motto is “economic development, one relationship at a time”, and we believe developing relationships and finding solutions that benefit all parties involved is the way to successful retail development. We work primarily in the Oklahoma/Arkansas/Texas region, but we have relationships with investors nationwide. If you would like to discuss your retail opportunities, please contact Retail Attractions.

Economic Development Takes Time and Patience

Posted by Rickey Hayes on June 22, 2010 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

Consumers drive our economy. So what happens when the average consumer feels uncertain about their financial future and decides to hold off buying that new refrigerator or pair of blue jeans? The economy slows down. And when the economy slows down the process of economic development slows down. It is the age old concept of supply and demand. It is hard for retailers to justify building new stores when the shoppers are spending less.

Economic development is a process that has always required time and patience. Consider the retail boom in Owasso, Oklahoma that occurred in 2003-2005. It is naïve to think that it only took two years for the 4.2 million square feet of retail to arrive. The real secret was the residential growth than began 15 years earlier. Owasso was building over 500 new homes per year, and the demographics for the residents were ideal for retailers, a young population with considerable disposable income. Even with all the stars aligned, it took Owasso 6 years from vision to implementation. The storefronts that opened in 2005 were planned in 2000 and inked in 2002 and 2003. It took years for the national retailers to finally open and begin producing revenue for the community. The moral of the story: economic development takes up to six years even in the ideal environment.

Communities pursuing retail development must understand that the process is slow and tedious. Retail development is a process. Our first step is to identify and verify a trade area that accurately depicts the demographics of the consumer base. From there we work with our clients to determine retailers that compliment the opportunity gap for the trade area. At this point, many firms will hand over a report and call the project complete, but this is where our firm gets down to the real work. Using our network of retail contacts, we begin selling your community to the retail world.

We normally contract on an annual basis, but our clients know that a year typically doesn’t produce tangible results. The first year we focus on educating retailers about our clients, making sure retailers know where our clients are located and key demographics for the surrounding trade area. Once we identify retailers who are interested in our client communities, we begin to discuss what it will take to make a deal happen. The time involved depends on the level of interest and the aggressiveness of the retailer’s growth plan.

The bottom line is that economic development takes patience and time, and there are no short cuts. To locate national retailers in your community you must first let them know that you exist and then let them know what you are willing to do to make the deal. Retail Attractions has extensive experience in these negotiations. Contact us to see how we can help your community in their pursuit of economic development.

What Cities Can Learn from the 2010 ICSC RECON Conference

Posted by Rickey Hayes on June 15, 2010 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

The International Council of Shopping Centers just wrapped up the 2010 RECON Spring Retail Conference in Las Vegas, Nevada. This year’s gathering is the ninth ICSC Spring Conference that I have attended and although the crowds were down from past years, this year’s annual event marked several milestones. The instability of the national economy and the banking industry crisis, among other key factors, brought retail development to a standstill for much of the United States. While the local and regional economies in Oklahoma, Texas, and Arkansas remained mostly stable, retail development has drastically changed directions.

Despite a smaller numbers of attendees, this year’s ICSC conference had some bright spots. Some national “big-box” retailers announced new development plans for 30-40 units. Although this is not near the numbers of new sites that were being developed a few years back, it may indicate that at least the worst may be over and some confidence in the overall retail marketplace may be returning. If anchor tenants begin to do new store and site development it seems logical some junior anchors, some larger restaurant chains, and some quick service restaurants will follow.

In the past, speculative development occurred and large tracts of real estate were tied up by investors. Lending institutions were liberal with loans and less restrictive. Developers sought anchors and hoped the momentum would follow. These days, all retail deals will be tenant driven and financing will be scrutinized at several levels. There is more and more competition between communities for the very limited number of new deals in the marketplace. But there are many reasons to believe that retail deals can still happen in new and existing retail markets, even in smaller cities and in some areas that have not seen any retail growth at all.
To land new retail in your community, you need to be providing the right information. The following strategies should be employed immediately:

• Provide incentives – set your city apart from the competition
• Clearly define and verify your trade area
• Be able to identify and describe the consumers within your trade area
• Provide current demographics and psychographics to specific retailers you are targeting
• Realize the retail potential within your community
• Analyze leakage and target retailers who fill the missing niches in your area
• Develop a plan to utilize public-private partnerships
• Review and streamline your city’s development guidelines to help expedite retail deals
• Provide the actual sites (get in the real estate business)

Retail Attractions, LLC provides our client cities valuable data, insight, and proven strategy to harness their retail potential. Contact us to find out how we can help bring retail development to your community.

Is Your City Ready for Retail Development?

Posted by Rickey Hayes on May 6, 2010 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

If you are a city manager or mayor of a community in Oklahoma, the bulk of your energy at work consists of trying to wrangle a budget that is fed by sales tax. This is definitely a full-time job. Until a more stable and predictable revenue source comes along, cities are forced to wrestle with sales tax revenues that ebb and flow, creating stressful situations for cities that are trying hard to stay ahead of growth, or simply trying to keep the bills paid.

In today’s competitive world, cities that are not maximizing every potential growth opportunity are falling further and further behind. In the real world, there are only two kinds of cities, growing cities and decaying cities. If you are lucky enough to be in a growing community, then you at least have the opportunity to capture the growth revenue and use it wisely. But if your city is NOT in a growth mode, the outlook for the future may seem pretty bleak indeed.

Since most, if not all, your general fund revenue comes from sales tax, the most prudent thing to do is to make every effort to maximize your community’s base of retail outlets. In order to accurately evaluate your city’s retail growth potential, several key factors must be quantified:

• A community’s retail base market must be identified and validated. Many rural or small population based communities underestimate their retail potential by not understanding traffic flows and market draw. Retail leakage needs to be identified and retailers that can plug the hole need to be recruited. The most cost effective way to do this is to hire a professional. Information about city demographics, leakage, and retail potential is marketed better and more efficiently through independent, third party sources like Retail Attractions, LLC.
• Communities must understand that retailers do not just show up and start building. Retail and restaurant outlets need to be attracted to your community by well planned marketing efforts and current, verifiable, and accurate data. Retail Attractions knows what retailers and developers need to see, hear, and feel about a community before they are motivated to invest capital and time to investigate potential opportunities.
• A city should evaluate its development process to see how difficult it is to actually develop commercial real estate in your municipality. Lots of communities boast of being retail friendly, but in reality the bureaucratic development process is very difficult and time consuming. In this economy, when retailers and restaurants have the ability to be very selective on new market development it is extremely important to have all the kinks worked out of the development system. A city is very wise to count the cost of promising and not being able to deliver on their promise. Being able to deliver on a promise in a timely manner is very important when potentially millions of dollars are at stake.

Hiring a firm like Retail Attractions, LLC can expedite the evaluation process and provide a community with an unbiased analysis of both the potential retail market, including leakage reports and accurate up to date demographic data, as well as a review of the local development procedures to ensure a seamless and time efficient development process for developers. Retail Attractions, LLC has a proven track record of success in our client cities. Retail development is a slow and tedious process in great economic times. Now, more than ever a community must take every opportunity to stay ahead of the competition and be ready to capitalize and make the most of every opportunity.

Cities Must Own Their Development Process – Part 2

Posted by Rickey Hayes on February 24, 2010 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

To be successful in the development world, a city must have integrity, character, and be true to the promises it makes. Reputation goes a long way, and it also goes both ways. A community with a good reputation that is known for being true to the promises it makes and being pro-development has a head start in the recruitment of national retail. A city with a bad reputation in the development world has a tough time convincing anybody to invest. A city that changes directions in the middle of a deal or promises incentives and then reneges may laugh it off, but a developer won’t think it’s funny. In fact, it may cost that developer thousands of dollars in engineering and design costs.

In this economy, when retailers are really examining sites and new market entry, communities that understand the retail development process are miles ahead. Cities that can position themselves to partner with the private sector to alleviate problems and provide incentives for investment are ready to reap the additional revenues that new retail growth brings to cities.

Most cities that are striving to recruit retail investment into their communities make several common errors. Most assume that they are ready to market themselves just as they are and that retailers are going to come anyway in time. Nothing could be further from the truth. Cities can and should market themselves with every available tool and technology.

Another fundamental mistake is the notion that a city can have no positive influence on a potential retailer’s site selection. Communities can and should work to influence the retailers decision to invest by providing the right data and having that data organized and easily understandable. But before sending the same old city propaganda to a potential retailer, it would be wise to take a good long look at the foundational development philosophy that currently exists in the governmental bureaucracy of a community’s development department. Perhaps the most important thing that a city can do is to make absolutely sure that the regulatory arm of the organization is “development friendly”. If a city is touting their market strengths, traffic counts, and disposable income to developers and retail site selectors, they need to make sure a pro-development atmosphere exists in the local governmental infrastructure; otherwise no matter how much marketing they do, an internal foe is sabotaging their efforts. Like I have said before: All it takes is one rogue building inspector to kill a retail deal potentially worth millions.

Cities Must Own Their Development Process – Part 1

Posted by Rickey Hayes on February 17, 2010 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

I grew up in a community surrounded by crops and fields that depended on an agricultural economy. Anyone can plant a seed and rely on circumstance and Mother Nature to produce a harvest, but prudent farmers leave as little to chance as possible. If you want a sure harvest, the wise thing to do is build a greenhouse and create the optimal environment for growth and development.

In the retail world, wise cities are working to create that same “greenhouse environment” for their retail marketplace. As with farming, controlling as much of the process as possible will increase the odds of success. Ensuring the development process is as uncomplicated and trouble-free as possible is potentially worth millions of dollars to cities seeking retail investment. I am sure there are exceptions to this statement, but in almost every circumstance I have experienced in dozens of communities, it is my conviction that a city needs to be in control of its own economic development and retail recruiting efforts. Chambers of Commerce and other economic development organizations can help, but it is the city government that must control the process.

One key reason why the city must control the development process is because the city (or public trust empowered and managed by the municipality) controls public infrastructure including transportation, water, storm water, and sanitary sewer systems. Public infrastructure has a direct impact on development costs and timing, and ultimately the success or potential failure of a development deal may hinge on the public infrastructure. A proactive city looking to grow will maintain an infrastructure that can support growth and have a long-term plan for their future infrastructure.

Part of controlling the development process is anticipating problems and eliminating them before they become an issue. In this very competitive time, cities need to have as many of the potential development problems taken care of in advance as possible. Communities need to do everything in their power to make the development process as painless and efficient as possible. A rogue building inspector or fire marshal can impair development or delay it enough to actually kill a retail deal.

The typical development process including zoning, platting, and site plan review can move painfully slow in good economic times. The old adage “time is money” is true. Delays, unexpected fees, and arbitrary or changing requirements or standards can kill a potential deal just as quickly as financing issues or site problems. Government at all levels has the reputation for being slow and difficult, and communities need to examine their development processes and make absolutely sure any and every foreseeable problem is identified and remedied before the action begins. No reputable development group is going to try and get by codes, life safety issues, or development standards. But when a city is bureaucratic and unwilling to partner with a retailer or a development group to solve an issue or a think of a solution to the inevitable problems that arise in the complex world of retail development, even the easy deals can break down and progress slow to a crawl or stops completely.

Owasso OK – A Test Case For Retail Success

Posted by Rickey Hayes on February 9, 2010 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

If you look at cities around the country who have experience a boom of retail growth in recent years you’ll find many of the same characteristics. All of the cities, especially suburban communities in densely populated urban growth cities, share shockingly similar traits.

• Strategic plan for growth – The community had a growth mentality. Cities need to see growth as positive. We are certainly not talking about sprawl here but managed well planned growth. Transportation, water, sewer and technology infrastructure has to grow as well.
• Surging residential growth – Owasso was averaging one 500 new single family residential dwelling a year. In the same time frame over a thousand upscale apartment units were also constructed. This growth has slowed somewhat, but still continues. In 2009 the City of Owasso had about 241 new single family starts.
• Young, well educated, upwardly, mobile population – Owasso’s demographic profile revealed a higher than normal percentage of college educated, young families with stable employment and home ownership. This trend still continues.
• High disposable income – Owasso’s average family household income was well above normal income levels and well above the threshold that national retailers tend to use for baseline comparisons.
• Strategic location – Owasso’s location and state and national highway’s traffic flow patterns funneled traffic from a larger regional area into the urban center of Tulsa. This one criterion is always evident in “keyhole” or “portal” suburban communities and where you find the traffic flow.
• Timing – Owasso’s growth meshed with the cyclic nature of retail development. When massive retail development came to Owasso, almost every national retailer was in the middle of a very aggressive growth mode. Retail growth and new market expansions ebbs and flows with the economy and many other variable factors.
• Development philosophy – Owasso’s city administration built a foundational philosophy of customer service into every city department and backed it up. We saw developers and retailers as our customers and not only as customers, but as the engine that powered our local economy. There was a “can do” attitude at every level of the organization (administration, planning, public works:.everybody at every level was proactive and involved).
• Impactful marketing material – There are two kinds of material:good kind/bad kind. The good kind is effective. The bad kind is not effective. You should let professionals do this:basic rule of thumb-concise, factual, and verifiable.
• Use of technology – Website and GIS data and the use of other cutting edge technology. It is not enough to have the technology available but to use it in strategic ways.
• Incentives – Almost every square foot of 4.2 million square feet of national retail that came to Owasso had an incentive attached to it. If your community is not ready to partner with the private sector to incentivize retail growth, you’re already fighting an uphill battle.
• After care – Very important to build and maintain relationships with local retail management. Often the national retailers need assistance on marketing their goods and services, especially if they are just entering the market.