16B — March 15 - 28, 2013 — New Jersey — Mid Atlantic Real Estate Journal
www.marejournal.com
Woodbridge, New Jersey – Despite a slow economic comeback, New Jersey’s retail vacancy rate is under 7% and the retail sector’s comeback “is well underway,” said Marta Person Villa, vice president in the Tri-State Retail Services Group of CBRE. Moderating the event’s program, “Retail Landscape in New Jersey for 2013,” she also told attendees that opportunities continue to exist in redevelopment, especially brownfield sites. Turning to site selection, “what works best for McDonald’s?” she asked Yolanda Holmes, area real estate manager for the fast food chain. High traffic locations (auto and foot) are the prime choices, and “recycling real estate,” said Holmes, noting that 50% of the deals that fell through during the recession have come back into play. “You have to have a good broker to come through for you,” she said. Holmes discussed how McDonald’s has changed the look of its stores, with the new look “catered to the market.” The company’s goal is to add a significant number of new stores over the next five years in the New York metro region, encompassing the immediate metro area plus Upstate New York. For convenience store operator Quick Chek, the mantra is, “A Great Place to Work, A Great Place to Shop and A Great Place to Invest,” said Mary Elizabeth Warner, the company’s corporate counsel. Noting that the company “has evolved over the last six years,” the goal is six to 10 convenience/gas stores a year. The company has already expanded into the Hudson Valley and is also exploring Long Island, Warner said. One factor that has slowed growth, however, is the approval process in New Jersey, particularly at the local level, a process she termed “difficult”. It’s helpful if it’s a brownfield, but there is no consistency on how the regulations are applied. “We have been meeting with a lot of success, but it has involved a lot of sweat and tears,” Warner said. Some of the retail categories that have been expanding rapidly in New Jersey are restaurants, fitness centers, urgent care and some other unconventional groups, noted Villa, as a prelude to a discussion on some of the leasing challenges facing industry professionals. For Alison Horbach, leasing representative for Levin Management, who oversees a million square feet of space, the main challenge is uncertainty. “A lot of retailers have been restructuring and consolidating, creating vacancies and potential va- cancies,” she said. “So we’re hunting for new prospects against a background of uncertainty as to whether or not we’re going to get the space back. But the space that we are getting back has opened up opportunities for a lot of tenants to get into the market,” Horbach explained. Another issue is that for fast-growth retail sectors, everything from gyms to yogurt concepts, much of that growth is franchise-driven. While the format and brand name might be solid, “you have to question the experience and financial backing of the franchisee,” Horbach said. The issue is that while the franchisor may be solid, an ill-prepared franchisee can create an unanticipated vacancy if the store fails. As far as lease terms, rents generally depend on the region, ranging from single digits in portions of South Jersey, to the $30s triple net in Bergen County, Horbach said. “Another factor is what tenants ask for in terms of tenant improvements and the like,” she said. “For rent, we look at the value of the cap rate,” said Holmes. “Landlords like McDonald’s credit, and the rent depends on the market. Rents have definitely become more competitive.” CREW NJ February Monthly Meeting: Paying Attention to Retail Quick Chek, meanwhile, has a preference of owning its locations, said Warner, “but we are flexible and creative. Every single project has a nuance, but it has to work within our business model.” Noting the wide range of rents in the current market, “it’s a new world,” Villa said. “While retail can be an uphill battle, compared to office and industrial, we have proven that we can deliver.” In CREW NJ chapter business, president Patricia Riedel of CBRE welcomed new members, urged all members to fill out the Member Spotlight questionnaire to be featured on the chapter’s web site, and thanked members for their support of this month’s philanthropy – the Sayreville Storm Relief Center, which provides assistance to superstorm Sandy victims residing in the Bayshore communities of Middlesex and Monmouth counties. Over $700 in cash and gift cards was raised at the event. CREW NJ is the New Jersey Chapter of CREW Network (Commercial Real Estate Network), which is dedicated to the advancement of women in commercial real estate. Membership organizations are comprised of over 8,000 members representing every discipline within the industry and are located in 76 chapters across North America. CREW Network seeks to influence the success of the commercial real estate industry by focusing on fulfilling four key initiatives: business development, leadership development, industry research and career outreach. Members represent fields as diversified as accountants, architects, appraisers, asset/property managers, attorneys, consultants, developers, lenders, leasing and sales brokers, mortgage bankers/brokers, marketing specialists, market and investment analysts, corporate real estate representatives and title/escrow officers. For more information on programming, sponsorship or membership, please contact CREW NJ at (609) 585-6871, via email crewnj@crewnetwork.org or visit the website at www.crewnj.org. McDonald’s leases are “20 years minimum, and 40 years maximum,” she noted.
2013 BOARD OF DIRECTORS
President & CREW Delegate Patricia Riedel, CBRE, Inc. patricia.riedel@cbre.com
President-Elect & CREW Delegate Monica Ceres, Giordano Halleran & Ciesla mceres@ghclaw.com Immediate Past-President & Advisor Cheryl Hardt, CBRE, Inc. cheryl.hardt@cbre.com Treasurer Rebecca Machinga, WithumSmith+Brown, PC rmachinga@withum.com Recording Secretary Stacey Weinberg, Federal Business Centers sweinberg@federalbusinesscenters.net Director, Membership Mary Lynn Kearns, Dancker, Sellew & Douglas mkearns@dancker.com
Director, Programming Marta Villa, CBRE, Inc. marta.villa@cbre.com Director, Philanthropy Rachel Brindisi rmbrindisi@gmail.com
Co-Director, Sponsorship Diane Menard, Prestige Title Agency, Inc. diane.menard@prestigetitle.net
Co-Director, Sponsorship Patricia Faulkner, NAI Global pfaulkner@naiglobal.com
Director, Special Projects-Golf Robin Grossman, Zycus rgros30687@aol.com
Director, Special Projects - Website/PR Susan Karp, Cole, Schotz, Meisel,
Forman & Leonard, P.A. skarp@coleschotz.com
Advisor Silvana Finizio, Carousel Industries of North America sfinizio@carouselindustries.com
Advisor & By-Laws Sheila Nall, KSS Architects snall@kssarchitects.com www.crewnj.org
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