Anyone who thinks they know what's going to happen tomorrow — with any sure degree of certainty — is either a fool or has absolutely nothing to lose by making such a prediction.
And yet, everyone wants to know what the “morrow” brings. In our business, retailers want to know what new concept or brand will be the next hot thing. If Company A is tearing up the sales charts, then Company B wants to be right next to them at the mall. This is also one of the only industries in which even the most cutthroat of competitors love to feed off each other.
On the other side of the fence, real estate managers, owners and developers (we call them MODs) obviously have much to gain by knowing future trends. They want to know which target tenants will pay higher rent and yield higher incremental sales for their properties.
Around here, we prefer to learn from history rather than swing at piñatas with sticks. And right now, history is teaching all of us some pretty hard lessons. Who would have thought even two years ago we would be uttering the words “Kmart” and “bankruptcy” in the same breath?
If you're really looking for hot trends, the best way is to talk to people. Straight up, in person, on the phone, whatever. That's how you find out what's really going on.
Each issue of SCW is the result of those conversations, and this issue is packed with great examples, including our cover story on REITs. We talked to many people with many opinions. Ultimately everyone has one, but we tackle the issues facing retail REITs and tell you what their future most likely holds. We also do reconaissance that doesn't always make it directly into print, verbatim, but it's there nonetheless. You see, we meet with industry insiders all the time, mostly to pick their brains.
Recently I met with Joel Murphy, president of the retail division at Cousins Properties in Atlanta, to ask him lots of questions, especially about those trends we all want to get in front of. “I think that retailers that create a track record and keep freshening up their stores and looking for new opportunities are going to be good,” said Murphy. “We're not so much dazzled by the hot retailer. My view is, are they going to be the new hot retailer in two years? We go into stores and say, ‘If you were a consumer, would you buy this stuff? And would you want to buy it a lot?’ We also talk to other retailers and ask who they like.”
Another good insider is David Gialanella, senior VP at Cushman & Wakefield in New York. He's an 18-year C&W veteran, and now he's heading up its new U.S. retail brokerage division. That's big, but why?
Turns out C&W's acquisition of London-basedHealey & Baker in 1998 is creating new goals and opportunities for C&W on this side of the pond, and Gialanella will be leading the charge. “We had a limited retail capability and we wanted to build that to capitalize on our relationship with Healey & Baker,” said Gialanella.
He knows the difficulty of the challenges ahead. “Retail is schizophrenic. It is highly local. If a retailer misses his market by three blocks, he could be out of business. Large, growing ones are global and asking where they can grow their business. Real estate is the distribution channel for delivering the products they sell. It's a fascinating business.”
Indeed, it is.