Blog: Retail Reinvention Forum Summary

This week I attended, “Retail Reinvention: Saving Main Street & the Mall,” hosted by the Central Coast Chapter of MIT Enterprise Forum. The panelists included Executive VP of Leasing for Caruso, Kloe Colacarro; Gordon Seabury, CEO of Toad & Co.; Exchange Collective Co-Founder, Dave Pankratz; and our very own Nina Johnson, Senior Assistant to the City Administrator, City of Santa Barbara.

As expected, the panelists were full of innovative and strategic information, but of course, the two speakers who interested me most were Kloe and Nina. Kloe used The Grove in Los Angeles, which is owned and operated by Caruso, as an example of a thriving retail center and touched on the strategic reasons for its success: cultivating new and innovate tenants that compliment one another, “deleasing” stores that have low sales volume or are not popular with their visitors, incorporating pop-up stores where both retailers and consumers can test concepts, and investing in the landscape and atmosphere of the property.

While these strategies are much easier to accomplish on a privately owned property rather than coordinating a multitude of private property owners, the real takeaway I got from her example was that the City of Santa Barbara is really going to have to be the connector piece, with a vision for downtown to improve PUBLIC spaces. When I walk around downtown I feel like it’s missing something new. When looking at how other cities are incorporating landscaping, water features, artwork, etc, I wish our downtown would take similar action to restore cultural vitality to downtown.

Thankfully, according to the presentation provided by Ms. Johnson, the City is working on some of these aspects and I hope they come to fruition soon.

Here are the points Nina touched on:
*Macy’s:  The department store retailer has 48 years left on their 75 year ground lease with the ability to assign the lease to someone else. Therefore, Macy’s is in the driver’s seat to pick someone to take over the space, and the City is encouraging them to submit a quality proposal for review. More updates to come…

*Art Incorporation:  The City is working on a revitalization project for the Highway 101 Underpass connecting downtown to the Waterfront/Funk Zone area. This project will incorporate new lighting, increasing walkway width, and interactive art to bring this main connector to life. See more information here, and the awesome Pinterest page of ideas here.

*Downtown Construction:  Frustrated with all of the construction work on our downtown streets? Well, it’s for a good cause! Southern California Edison has committed to upgrade all of the electrical systems downtown, which is very outdated. This will include more lighting for walkways, which is much needed downtown.

*Average Unit Density (AUD) Program:  A program designed to encourage developers to build a greater amount of smaller more affordable units in Santa Barbara. The program has been very popular and the City has received many applications.
Comments: While this program seemed to be a good idea to encourage the construction of new workforce housing, it has had its challenges. The only property to be completed at this time under the AUD program is The Marc on Upper State. Several more projects are under construction and it will be interesting to see the direction of this program going forward.

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California Commercial Real Estate Continues Upward

As many know, multi-family (5+ units = commercial) has been the darling of the commercial real estate boom for the past 2 years and is still on a steady demand path, especially in areas like Santa Barbara County where the ability to build new buildings is minimal. In an economic downturn, the office sector is the first to go and the last to recover when the economy gets better. We have seen significant office sales in Goleta, Santa Barbara and Carpinteria over the past 18 months, which indicates this sector is an interest to investors again and thriving. Low interest rates and capitalization rates (“cap rates”) will continue to drive the market demand and many think this will last a few more years. However, time is of the essence, as with all real estate deals, and now is the time to sell your property if that is something that interests you. Sale prices have increased approx. 25% over the last 18 months in SB County and premier properties that are in a good location have received several offers over asking price. Investing in this area is hard for many but owner-users can benefit immensely from SBA financing to fund the majority of their purchase when occupying at least 51% of the building. It will be interesting to see how the next couple of years play out but for now, the trend is positive and a lot of #cre deals are being done. Leasing has slowed down a bit as prices haven’t dropped as much as some would like. On the contrary, prices are slowly creeping up again, especially as owners decide to upgrade their spaces to attract more high-end, quality tenants. As always, if you have any questions about the current state of the #cre market in Santa Barbara County, please call or e-mail me.

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Choose a good attitude.

It was a wonderful couple of days in Las Vegas for the annual Lee & Associates Broker Summit! One of the many amazing people I met was Greg Schenk from The Schenk Company and here is a quote from his presentation, which I found very inspiring:

“Choose a good attitude. – What often screws us up most in life is the picture in our head of how it’s supposed to be. And the reason so many of us give up is because we tend to look at how far we still have to go, instead of how far we have come. Remember, life is a journey, not a destination. This moment, like every moment, is a priceless gift and an opportunity. Be positive, smile, and make it count. Pretend today is going to be great. Do so, and it will be. Research shows that although we think that we act because of the way we feel, in fact, we often feel because of the way we act. A great attitude always leads to great experiences.”

Keep living your dreams and not only reaching for, but achieving, your goals! Happy Monday 🙂

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This is a great quote for anyone who is (or wants to be) a leader in any field or practice:

“The challenge of leadership is to be strong, but not rude; be kind, but not weak; be bold, but not bully; be thoughtful, but not lazy; be humble, but not timid; be proud, but not arrogant; have humor but without folly.”  ~ Jim Rohn

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My Favorite Inspiring Quote

“You can have anything you want – if you want it badly enough. You can be anything you want to be, have anything you desire, accomplish anything you set out to accomplish – if you will hold to that desire with singleness of purpose.” ~Robert Collier

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