12C — August 30 - September 12, 2013 — Shopping Centers — Mid Atlantic Real Estate Journal
www.marejournal.com
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rrow Real Estate Ser- vices, a fast-growing commercial real estate Agreement will allow clients to benefit from a wider array of services Arrow Real Estate Services forms alliance with Hillelson Business Services A Since then, Arrow has nearly 30 agents in eight states, with approximately 2 million s/f of listings.
mercial real estate industry, has held a number of positions over that time. Arrow’s suc- cess, however, is special as he’s watched others embrace the model and succeed. “I’m like a proud parent here,” he said. “I dreamed up a business withmy best friend, and in 18 months almost 30 other people want to be part of it. We had an idea to provide a high level of sup- port, marketing and branding and people said this is a great idea. I want to hitch my wagon to this horse.” “We wanted to start a com- pany with a sense of innovation to it. Our frustration was that everybody that’s started a new company in the last 20, 30, 40 years has done it the same way. They didn’t take into account the internet and cloud-based efficiencies. We have a much higher commission rate for agents who are making the deals.” Hillelson said he had “a good feeling” meeting and talking to Sean. His wealth of experience has taught him that “when you put the right two people together, one and one equals three. When you put two heads together, it’s almost like put- ting three heads together. Sometimes things come out that wouldn’t have if you didn’t have that relationship.” n
firm, has formed an alliance with Sherman Hillelson, a well- respected business broker in the Philadelphia area. Sean Sablosky, Arrow’s chief executive officer, said the agree- ment will allow clients of Arrow andHillelson Business Services to benefit from a wider array of services services while the two companies increase their cus- tomer base. “It’s a very complimentary service.” Sablosky said of real estate and business sales. “It’s a way of casting a bigger net. We can now catch that piece of a transaction as well. “I am very honored and humbled that this icon of this industry will become a great component of my company,” Sablosky continued. “He’s a great character, a great elder statesman in this business.” For more than 25 years, Hillelson has helped small business owners buy and sell hundreds of businesses in a va- riety of industries. He said both companies have something that can be beneficial to each other. “I’m going to lead you to a deal you may never have had access to, and you’re going to do the same for me,” he said. Hillelson called Sablosky “a smart businessman who under- for investors often leads to long-term, third-party prop- erty management and leasing assignments – the bread-and- butter of a landlord-focused retail real estate services firm. Because a regional company is in the market working with owners, brokers and investors every day, it is frequently the first to hear that an owner is ready to sell and can proac- tively work with owners to source off-market acquisition opportunities. Moving Targets Institutional investors and fund managers today are tar- geting high-quality, dominant grocery-anchored centers. They are looking for credit tenancy with longer term leases and solid retail sales. They prefer dense, infill lo- cations in higher barrier to entry markets and strong demographics. Shopping cen- ters in which you can “check
The success should come as no surprise. The two founding partners chose to invest in people rather than office space, desks and computers by taking advantage of cutting-edge tech- nology. It allows them to pay commissions at a higher rate to their associates. The brokers, who are independent contrac- tors, can make more money with fewer clients, allowing for greater customer service. Winitsky, who’s been in the business since 1969, contends there’s another key reason Ar- row has quickly hit its target. “Ninety-nine percent of bro- kerage houses believe every- thing belongs to them,” Win- itsky said. “They require you to sign contracts saying as much. We do not believe we own that. We are a cohesive group of people sharing infor- mation, knowing that it’s not proprietary. “We are not the great and powerful Oz taking something that they cannot get back. It’s truly a different culture. We believe our partners, associates and vice presidents can run their own businesses within Arrow’s framework.” Sablosky, with 30 years in the shopping center and com-
Shown from left: Sean Sablosky, Brook Henningsen, Sherman Hillelson
stands the marketplace.” When the two stalwarts kept running into each other at dif- ferent transactions, Sablosky decided an alliance would be fortuitous for each of their companies and made a proposal that Hillelson accepted. “Sherman is very different than most of our people, who are very used to bricks and mortars,” said Brooke Hen- ningsen, a founding partner with Sablosky since Arrow’s inception in February, 2012. “Businesses are intangible things that we aren’t used to selling and leasing. Sherman fills a void for us.” Bob Winitsky, a principal partner withArrow, said “When you bring in the right strategic most of the boxes” are not easy to come by – whether broker-listed or off-market. Because the demand for these centers has been so intense, some investors are starting to consider strong, dominant centers located in secondary markets, in search of greater opportunity and better yield. Also, there are more funds today seeking value-added and opportunistic retail prop- erties due to improving retail fundamentals. Additionally, investors are becoming much more selec- tive when it comes to which grocers anchor a center. This is because the “retail food/ne- cessity-oriented segment” has been going through a rapid transformation with both the higher end, and extreme-value grocers performing well while the middle-market grocers continue to lose market share, with a few exceptions. Many of these mid-level brands
partner, there’s value in what you can offer the client.” Winitsky worked with Hillel- son on several projects. When- ever he mentions the Hillelson name to a client, the feedback is fairly standard. “ ‘Oh, Sher- man, sure.’ They either know him or have heard of him.” Hillelson’s reputation sets him apart from other business brokers. “There’s a trust,” Win- itsky said of the brandHillelson has established. “You can work with Sherman because you can trust him. He serves the client. He’s not self-serving.” Arrow has been growing like wildfire since Sablosky and Henningsen, two close friends, established the unique company a year and a half ago. are losing market share to a growing list of aggressive competitors, such as Wal- Mart, Target, various dollar store and discounter brands, as well as Amazon and other online retailers. Unless there are several good back-fill options, most investors will not consider buying a center anchored by a grocer brand that has continued to under- perform. This industry shift has cre- ated investor uncertainty and the process of vetting a shopping center is more critical now than in the past. Furthermore, demand will likely continue to outweigh supply for years to come. As a result, institutional investors and fund managers are more challenged than at any time in the recent past to identify sound retail real estate invest- ment opportunities. Investors are now routinely turning to “landlord-focused,” trusted
Tight retail real estate investment market fuels . . . continued from page 10C
izes in evaluating for-sale shopping centers and sourc- ing off-market retail in- vestment opportunities for Levin Management’s select institutional clients and high-net-worth investors. n
third-party retail advisors like Levin, particularly in the challenging Mid-Atlantic and Northeast as well as in other supply-constrained markets nationwide. Joseph Lowry special-
Pre-construction planning determines a . . .
Raymour & Flanigan Retail Furniture Showroom at Provi- dence Town Center in Colleg- eville, PA. • 55,000 s/f Incorporat- ed green building concepts throughout in a two-story building. • Powerlink Energy Manage- ment Systems control lighting and HVAC. Echoing news of the improv- ing economics in our region, things have picked up over the past four or five months and continued from page 9C
once again we are seeing an uptick in retail construction activity. Time is money for all in- volved. Our experience shows that the sooner we become involved with the owner and design team, we believe Target Building Construction can be a key asset to any construction project. William Stevenson, III is director of business devel- opment at Target Building Construction. n bills@targetbuilding.com
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