February 2016 — Retail Properties Quarterly —
Page 21
was not renewed in time for closing,
the borrower had an option to add a
mezzanine piece in lieu of reduced
loan proceeds.
Credit Unions
Historically, we haven’t spent
much time discussing credit unions
in the commercial mortgage bank-
ing world. However, they’re becom-
ing an increasingly relevant source
of capital for some commercial real
estate borrowers who seek prepay-
ment flexibility and aren’t afraid to
provide a recourse guaranty. Fur-
thermore, a select few credit unions
recently started making large loans.
For example, I placed a $27 mil-
lion loan with a credit union for a
Colorado retail asset. Even though
the asset was considered stabilized,
it had enough uncertainty in its
rent roll to cause heartburn for life
companies and CMBS lenders. Since
the borrower was confident enough
to provide a recourse guaranty, I
arranged a seven-year credit union
loan, which involved participation
from a second credit union on the
West Coast that could be prepaid in
full without penalty starting from
day one. This provided ample time
for the borrower to solidify the rent
roll as well as the flexibility to refi-
nance to nonrecourse permanent
financing at any time.
Overall, the lending environment
remains favorable for commercial
real estate borrowers. There’s plenty
of capital available for acquisitions
and refinances – even some of the
tougher ones.
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Owners
The luxury wing features a lot of
jewelry stores, including David Yur-
man, Hyde Park Jewelers, Tiffany &
Co., Omega, Breitling, Roberto Coin
and Nightrider.
“The rising tide lifts all boats, and
the critical mass means everything,”
said LeMasters. “If someone is jew-
elry shopping, they come here for
the depth and breadth to find exactly
what they’re looking for. That is the
real competitive advantage.”
With this new wing, Cherry Creek is
doubling down on the belief that, even
in the days of e-commerce, luxe sells.
LeMasters believes that people still
want to buy high fashion – whether
it’s men’s suits, ladies accessories or
high-end home furnishing – in per-
son. For these good, it is important to
feel, test and see the product in per-
son before purchasing, he said.
“Women want to buy with confi-
dence,” he said. “Brick and mortar
provides that authenticity, and that’s
what continues to make great malls.”
As the density increases in Cherry
Creek with 1,500 new dwelling units
coming on line, attracting those afflu-
ent tenants to the mall to shop, eat
and see movies is important to stay
relevant. Going forward, the man-
agement team’s focus will be on the
upper-moderate to upper price points
and strengthening the food offerings.
There are two new restaurants
going into the wing: 801 Chop House,
a Kansas-based fine-dining steak-
house and Rise Pies, a quick-serve,
customizable pizza place that is new
to the Colorado market.
“We want to continue to find restau-
rants and merchants that you can’t
find anywhere else in the market
to give us a distinctive advantage,”
LeMasters said.
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Cherry Creek
4. Resurgence of beacons.
Accord-
ing to Business Insider, beacons will
directly influence over $4 billion in
U.S. retail sales this year and climb
to 10 times that number next year.
Beacons are used for short-range
Bluetooth connectivity to personal
devices and can provide in-store
coupons, POS and data analyt-
ics showing how much time users
spend in a particular area. One
beacon is relatively inexpensive
and can accommodate coverage
of approximately 5,000 sf of store
space.
As a broker, when showing prop-
erties, understand the possible
layout of a space and where a bea-
con can be located to help tenants
visualize the space and how their
customers can engage with their
products.
5. Network and device management.
With all of the technology that can
be placed in a retail space, use a
trusted technology adviser for net-
work and device management. Your
adviser can manage everything,
including the Wi-Fi, POS and tab-
lets used by employees. Although
retailers can handle one location
fairly effectively, managing multiple
stores across a nationwide com-
pany quickly can add up in terms of
headcount and costs. Using third-
party advisers can assist with the
return on investment for technology
changes.
Understanding retail requirements
and the technology available will
help ensure the right fit for retailer
and customer satisfaction. However,
poor or mistaken information can
lead to a poor customer experience.
By partnering with a trusted tech-
nology adviser, you position your
retail space to showcase its in-store
and online convergence and meet
your clients’ business needs. Ease of
use must be a priority when imple-
menting, and training is an impor-
tant step to include. Leverage your
third-party partnerships to accom-
modate both.
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Technology
advertising that is delivered into the
local trade area across online display
networks and social. Companies can
integrate offline purchase data to
amplify advertising to higher value
prospects. Messaging is simple and
focuses on the positive aspects of
physical retail. Digital has become the
primary medium to engage the shop-
per and promote the center.We are
seeing activity from all types of retail
properties frommalls and lifestyle cen-
ters to outlets and power centers that
are looking to engage digitally.
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Digital
