Movers and shakers in the region's retail industry will have much to talk about when they meet in September at the Philadelphia Convention Center for this year's PA/NJ/DE Idea Exchange. The two-day annual event, taking place Sept. 23-24, is expected to draw a record 1,600 people - up from 900 attendees only three years ago.
One reason for the heightened excitement is the strong regional economy and a robust local retail market, especially the new marriage between sports/entertainment and retail. A number of projects containing these elements are either proposed or already under construction in the Philadelphia area.
While the mood at this year's Idea Exchange is expected to be upbeat, a feeling of anticipation will likely grip the crowd as the event's keynote speakers - John Street and Sam Katz - give their spin on the local retail and economic picture. Street and Katz will face off in an election this November for mayor of Philadelphia. Their talks will be followed by a question-and-answer session.
This is one of the largest regional events of its kind in the industry, reports Michael Markman, ICSC state director and a program co-chairman for this year's Idea Exchange. "The higher number of attendees this year is a clear indication that there's a lot of business out there to be done," he says.
The majority of that business will be conducted during the second day of the Idea Exchange, when expansion-minded retailers and developers will come together for the deal-making session.
"You can save three months or more of phone calls by meeting face-to-face with a client at an event like this and working the deal through," says Markman, who is also executive vice president of Huntingdon Valley, Pa.-based BET Investments.
Lori Flynn, vice president of development for The Goldenberg Group, Philadelphia, says her company has advanced the ball on a number of deals at past meetings.
"Ten years ago, the event was focused on community and strip centers and was very local in nature," adds Lloyd Miller, vice president of leasing for King of Prussia, Pa.-based Kravco Company. "Today, the Idea Exchange is much broader in scope because Philadelphia is now on the national map for retailers, restaurateurs and entertainment companies."
Roundtable discussions focusing on some 20 topics relevant to landlords, retailers, lenders, investors and others in the shopping center industry are a big draw on the first day of the event. Last year's standing-room-only crowd warranted an expansion of the list of speakers and topics at this year's convention, Markman explains.
Topics new this year include retail security, developing brownfield sites, working with unions, going public, neighborhood revitalization and embracing the teen shopper.
The impact of electricity deregulation on the industry is one of the most timely topics slated for roundtable discussion. Peter Soloff, a partner in the Philadelphia-based law firm of Blank Rome Comisky & McCauley, will head the discussion on deregulation of the electric industry's generation component.
"This is an issue that has really hit the radar screen," Soloff says. "With multiple suppliers, electric costs have become a much bigger part of the deal-making process, and landlords and tenants are taking a hard look at their existing agreements." The more competitive pricing environment has raised questions about the benefits to the industry and how those benefits will be passed on by owners to their tenants, he says.
One of the hottest concerns facing retailers today is slated for an in-depth panel discussion later that day. Julian Rackow, a real estate attorney specializing in shopping center and hotel development for Blank Rome Comisky & McCauley's retail law group, will lead the discussion on "E-commerce: Competing in the new millennium."
"This is a cutting-edge topic facing every major retailer today," Rackow says. "Retailers need to develop a strategy that will help them decide how to allocate their investments between bricks and mortar and e-commerce." Nationally, retail sales recently hit the $1 trillion mark. Online sales represented 3% of that total, up 1% from three years ago, according to Rackow.
"It's still a relatively small amount, but it's growing," he says. During the panel discussion, we expect to hear from representatives in the retail industry that are already doing both (store and Internet sales), as well as investors and consultants to retailers."
Another scheduled break-out discussion will focus on the blending of sports and retail. Recent announcements of several urban Philadelphia retail projects with large sports and/or entertainment components - as well as proposals for two major-league stadiums for the city of Philadelphia - have caused much excitement. (See related sidebar above.)
In addition to the various discussions on the first day of the event, the trade show portion of the program promises heightened activity the following day. A 12% increase over last year in the number of booths underscores the market's healthy condition, says Bill Deasey, another co-chairman for the Idea Exchange and partner in King of Prussia, Pa.-based Fidelity Commercial Real Estate Alliance Inc.
"The outlook for deal-making looks very good," he says.