Mid Atlantic Real Estate Journal — Fall Preview — September 27 - October 10, 2013 — 19A
By Scott C. Butler, Esquire, Kaplin Stewart Broaden those retail use restrictions in 2014 r etAil r eAl e stAte l AW
s a result of the growth of internet shopping, retail real estate is go-
mortar stores. The result is that some of the larger square foot tenants are transforming their proto-type stores to a smaller footprint, with the sales being executed on-line. Along with the slowly recovering economy, the internet has caused more competition between shopping center and mall owners for potential retailers in order fill their vacancies. In the previous strong retail real estate market, most retail- ers required use restrictions in their leases to cause shopping centers and malls to consist of only clothing, electronics, books, food and other merchandise sell- ing retailers, as well as restau-
rants and certain service pro- viders. These leases specifically prohibited office and residential type tenants, since these types of tenants were not thought of being able to attract the type of people that would shop and increase the gross sales of the retail tenants. In this economy and in the foreseeable future, however, there are not a sufficient num- ber of retailers and restaurants to fill the vacancies caused by the competition from the in- ternet and the recession. As a result, real estate owners are forced to expand their potential tenant mix and reconfigure the shopping center environment
to include offices and day-care type facilities, as well as hotels, apartments and condomini- ums. Facing the alternative of operating retail stores in vacant shopping centers, some retailers are re-evaluating what tenant mix will maximize their gross sales. These retailers are real- izing the benefit of operating next to offices with patients, clients and employees poten- tially shopping before or after their appointments or work days. The potential tenant mix could include banks, insurance companies, travel agencies, bro- kerage firms, medical clinics and other similar service businesses.
Hotels, apartments and condo- miniums are also being viewed as increasing gross sales due to the potential customers living in and visiting these units. In negotiating use restric- tions in retail leases in this economy and the foreseeable future, real estate owners should contemplate the po- tential for a living, working and shopping complex that an existing shopping center or mall might transition into in the future. Scott Butler is a prin- cipal in the Real Estate, Business & Finance group at Kaplin Stewart in Blue Bell, Pennsylvania. n
ing through a transition of how and where people s h o p . Gr o - cery stores, restaurants and certain types of ser- vice providing tenants have
Scott C. Butler
continued to open stores and have not seen a major change in customer shopping habits as a result of the internet. Many clothing, electronics and other merchandise selling retailers, however, are in the process of adapting their business mod- els in order to integrate the internet with their bricks-and- should be put in this role; prob- ably someone with excellent communication skills, average to above average intelligence, good grooming habits and a congenial temperament. When the purchasing process applies downward wage pressure, it will become difficult, if not im- possible, for a service provider to obtain the requisite skills set and personality to satisfy a customer’s real needs. When the person that is ina job functionisgoingtobe the face of the organization, whether that face is to your customers, employees or staff, can you really afford to commoditize labor? With every passing day the world becomes further filled with unknowns that can occur at any minute, anywhere. Catastrophic storms are becoming more fre- quent and ever more powerful throughout the United States. It’s no longer only the gulf coast states that bear the brunt of these storms. The northeast has expe- rienced several powerful storms thathave causedbillions of dollars in damage. It was hard for any of us to imagineManhattanflooding or falling into darkness, however, bothdid indeedhappen inOctober of 2012. It is during these times of unforeseeable circumstances that partnerships truly make a differ- ence.Whenastrongpartnership is in placewith a service provider di- saster preparedness and expected response should be second nature because, as I stated earlier, rela- tionships are built upon mutual risk and reward. Jim Martin is director of sales at Security Re- sources, Inc. n continued from page 1A By Jim Martin . . .
Contact: Scott C. Butler, Esq. 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-260-6000 • www.kaplaw.com Other Offices: • Cherry Hill, NJ 856-675-1550 • Philadelphia, PA 215-567-3120 Kaplin Stewart At t o rne y s a t Law Getting you through the maze of real estate law. Strategy. Skill. Success.
KS Ad 6x5.5 Maze.indd 1
10/9/12 9:53 AM
Made with FlippingBook flipbook maker