Cincy deal makers head to Vegas retail event

Posted at 4:55 PM, May 22, 2016

LAS VEGAS - Driverless cars, refining the retail experience and a newly shuffled lineup of Cincinnati deal makers. Those are some of the themes you can expect from WCPO's coverage of the International Council of Shopping Centers convention in Las Vegas this week.

"Retailing is a dynamic industry that requires continuous reinvention,” Macy’s Inc. CEO Terry Lundgren told the company's shareholders Friday. Two days later, Macy's Executive Vice President Douglas Sesler is attending his first ICSC event since being hired in Aprilto search for joint-venture deals with developers. Macy's is under pressure from shareholders to convert unused space in its mall and flagship stores to housing, office or other uses. Sesler could find dozens of developers interested in such deals here in the next few days.

And he represents just one example of new leaders who could impact Cincinnati projects:

  • At the Kroger Co., Nick Hodge is making his first ICSC appearance since becoming the leader of the grocery chain’s real estate division last August.
  • At Tri-County Mall, Renee Bellis attending her first ICSC convention as general manager of the region’s third largest mall, a 1.3 million-square-foot center that is searching for a new department store anchor.
  • Newport on the Levee has a new leasing team chasing deals at ICSC. The urban entertainment center hired an Atlanta-based leasing agent, Steve Yenser from Jones Lang LaSalle, in October.
  • Developers of The Banks riverfront project also made a leasing change in the days leading up to RECon 2016, hiring a team of brokers from CBRE to find new tenants for the blocks between the stadiums. The team includes Herky Pollock, an executive vice president out of Pittsburgh and Tori Sunderman in CBRE’s Cincinnati office. The new leasing arrangement ends a six-year affiliation with Jeffrey R. Anderson Real Estate.
  • Finally, this year marks the return to ICSC of Matt Daniels, once a high-flying retail developer whose Kenwood Towne Place project fell into foreclosure in 2008, sparking a bank fraud case that led to Daniels’ acquittal in 2013. Now, he’s bringing a new company to chase projects in Las Vegas. Meridian Realty Capital LLC lists a dozen projectson its website, including retail developments in Loveland, West Chester, Florence and Cold Spring, Ky.

As many as 38,000 brokers, developers, retailers and vendors are expected to converge on the Las Vegas Convention Center in the next four days. They’ll find an industry that has fully recovered from the Great Recession of 2008, said ICSC President Thomas McGee.

“Occupancy rates are hovering around 94 percent," McGee said in a Cincinnati appearance May 13.“There hasn’t been a tremendous amount of new construction” and “the industry has done a pretty effective job of managing supply vs. demand.”

McGee credits shopping center owners with finding non-retail uses, including health care facilities, libraries, entertainment venues, bars and restaurants. Those shifting uses aren’t just happening in malls.

Macy’s has used stores within a store, spa services and events like fashion and flower shows to attract more shoppers. Kroger has experimented with in-store restaurants, new store formats and digital offerings like the ClickList online ordering system that allows shoppers to pick up grocery orders without leaving the car.

Kroger’s Nick Hodge told local real estate professionals May 13 that improving the shopping experience will be key for Kroger, as it competes against new rivals like Lidl, the German chain that’s now invading the U.S., and Wegman’s, an East Coast chain known for its unique in-store experience.

“We’ll look for those bells and whistles that can make our connection to our customers as relevant as possible,” he said. “It’s not just about what you offer in the store but it is about the service and the hospitality that the customer gets when they walk into your store.”

And shoppers are still walking into stores, said McGee, despite the rapid growth of shopping via cell phones and computers.

“It’s not bricks vs. clicks. It’s bricks and clicks,” McGee said. “In the holiday season, a third of the folks that bought things online picked it up in a physical store. Then 70 percent of them picked up something else while they were there.”

The technologies behind the growth of online retail aren’t the only forces developers are starting to ponder. The Atlanta-based design firm, Cooper Carry, has published a SlideShare to explore the impact that driverless cars will have on the retail environment.

Shopping centers of the future may require more space for valet services, but parking facilities could be smaller and more remote. Older shoppers will be more likely to venture out to the mall if they don’t have to worry about driving themselves. But designers will need to make sure shopping centers are walkable for that older demographic.

“While there are many factors that will impact retail design once the driverless car is used by consumers, most certainly street widths, parking decks and freedom of mobility will be key elements to consider,” said Angelo Carusi, a principal in Cooper Carry’s Retail Studio.