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— Retail Properties Quarterly — November 2017

www.crej.com

net-leased properties.

Grocery-anchored retail

shopping centers, with the

grocer included in the collat-

eral, continue to be the most

sought-after retail product,

particularly by institutional

investors. A limited supply,

coupled with an ever-increas-

ing pool of institutions, pen-

sion funds and real estate

investment trusts solely tar-

geting these assets has driven

yields on these properties

into the low- to mid-5 percent

range. Recent notable trans-

actions in this space include

Bear Valley Shopping Center,

which sold for $46 million,

and the Orchards, which sold

for $38 million. Both shopping

centers are anchored by King

Soopers.

A balanced market with

restrained new development

has not only led to favorable

changes in market rents and

vacancy rates, but also it has

created pent-up demand with

investors looking to purchase

in one of the strongest and

most vibrant midmarket

economies in the country.

Denver continues to be one of

the most appealing markets

for retail investors and, based

on the current market funda-

mentals, it appears that will

remain the case for the fore-

seeable future.

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Government Facilities

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Bowlby

Continued from Page 4

investments provide a more-

risk-seeking investor similar

benefits as a new construc-

tion property, but with the

uncertainty of fewer years

remaining on their lease.

Store sales, proximity to

competition, strength of

the market and many other

factors become much more

significant to investors con-

sidering older stores.

In Colorado, Family Dol-

lar operates approximately

125 stores while Dollar Tree

operates 91 stores and Dollar

General operates 30 stores. All

three retailers have aggressive

expansion plans as it relates

to the state due to favorable

economics and an opportunity

for each to increase their mar-

ket share in our growing state.

With robust expansion plans

in Colorado and its neighbor-

ing states, investors will find

plenty of opportunities to

invest in dollar store properties

over the next several years.

Despite lacking novelty, dol-

lar stores are the brick-and-

mortar retailers of the future.

They have proven to be resis-

tant to e-commerce, economic

downturns and cannibaliza-

tion from their own rapid

expansion.

Wright

Continued from Page 6

an inviting atmosphere that

encourages people to hang

around to socialize and be

entertained.

Millennials, for example,

are looking for authentic

environments that respond

to their aspirations. Sustain-

ability is a great example.

Millennials wants sustain-

ability to be present within

the brand of a retail facil-

ity, because they recognize

sustainability in design and

respond positively to it.

They also are attracted to

an atmosphere that feels

like an outdoor living room.

In urban areas, a mix of

unique shopping, entertain-

ment, hotels and exciting

restaurant and bar concepts

tend to bring the crowds and

invigorate retail. Areas like

River North, South Broadway,

Union Station, and suburban

developments like Belleview

Station and Old Town Arvada

have managed create an

exciting retail mix that is

thriving.

Meanwhile, young families

are looking for convenient

access to medical services,

uses oriented to children and

a Main Street environment

for shopping and dining. For

the young family, a retail

destination that combines

activities for kids like karate,

tutoring or gymnastics, with

a fitness use for the parent

and healthy eating options

can create convenience and

activity for the whole retail

project. This can work in

larger retail formats like life-

style centers (Belmar, Streets

of SouthGlenn, Southlands),

but also is a dynamic that

works great in neighborhood

shopping centers.

Another driver of strip

mall demand is convenience,

including drive-thrus and

outparcels. Many restau-

rants, dentists and optom-

etrists are looking to be con-

veniently located in neigh-

borhoods, offering shopping

center owners opportunities

to convert some of their

excess parking to convenient

outparcels or pads.

Livaditis

Continued from Page 10

3. Be willing to slay some

sacred cows.

No, we aren’t

talking about the petite ten-

derloin steak in our salads,

sandwiches and pizzas. But

we did have to challenge

many of the design and

construction techniques

that were “how Newk’s has

always done things.”

Recognizing that every

possible inch of space in a

restaurant needs to gener-

ate income, we changed

seating areas and added

square footage for takeout,

even while decreasing the

average size of our restau-

rant. We moved doorways,

redesigned our patios and

ended unproductive vendor

relationships. One thing

that will never change?

The open kitchen that sets

Newk’s apart, designed by

founder Chris Newcomb on

a napkin (which he still has,

framed). But we constantly

make sure we keep learning

and creating more efficient

designs for our business.

We also killed a sacred

mantra of the real estate

industry: “Location, location,

location.”

Of course, we know a good

location drives success. But

we found that a “great site”

might not be “great” for us.

We vary in daypart from

most fast-casual chains in

that we don’t offer break-

fast; instead lunch, dinner

and catering comprise our

business. A robust daytime

population drives our lunch

traffic, including our grab-

and-go, pick-up, delivery

and catering. Rooftops and

evening traffic drive our din-

ner business, which includes

a wine and beer license and

a focus on outdoor dining

and families. So, while we

analyze locations using the

same metrics as our compet-

itors – for example visibility,

traffic, access and parking

– we factor in the psycho-

graphics and demographics

of the market.

When taken together,

these three major changes to

our construction and design

schedule allowed us to open

new restaurants as much as

10 days early – delivering up

to $60,000 in top-line rev-

enue. Talk about the early

bird getting the worm!

Cheek

Continued from Page 12

Consumers come for the

experiences the environment

offers and jump into that

mystical omnichannel shop-

ping cycle as a component

of the experience. The “look

what I’m doing” aspect of

the experience, and usually a

social media post that proves

your clout, fuels the need for

personal interaction in cool

places.

As omnichannel shopping

habits become the cultural

norm, online and in-store

purchases will become

integrated as a part of that

purchasing process. Physical

interaction in an experiential

environment will fuel the

need for quality retail design,

and as designers we must

continually adapt to the

changing landscape in the

retail market.

McLennan

Continued from Page 18