The development, redevelopment, finance and leasing of Retail Property is a very specialized discipline.
Retail properties pose a number of special challenges, primarily due to (1) the volume and speed of traffic, and (2) the diverse nature of customer and space types.
Solutions and improvements are typically derived by focusing carefully on each individual location, layout, and local.
CREA Agents train continuously, merging creative and commercial disciplines drawn from the fields of not just real estate. In addition to keeping up with the aspects of legal compliance imposed by the State of Colorado Real Estate Comission, our Agents also train and team with experts from the fields of environmental design, construction, retail business operation, marketing, development and finance.
As a result, CREA Agents exhibit proactive behavior in the marketplace, use sophisticated information tools, and are constantly seeking and managing the best opportunities for our Clients.
Retail Properties are a broad category, but within the industry, its beneficial to classify in a few different ways, such as by type of products sold as follows:
Hard goods or durable goods: automobiles, appliances, electronics, furniture, sporting goods, lumber, etc., and parts for them. Goods that do not quickly wear out and provide utility over time.
Soft goods or non-food consumables: clothing, other fabrics, footwear, cosmetics, medicines and stationery. Goods that are consumed after one use or have a limited period (typically under three years) in which you may use them.
Food properties: any property where food is prepared, consumed, and/or stored. Restaurant, grocery, hospitality, food warehousing,
Arts and Leisure: contemporary art galleries, bookstores, handicrafts, musical instruments, gift shops, and supplies for them.
And then there is retailing by operation type:
Property where a Tenant is also the Owner of the Real Property.
Single Tenant Property
A specialty store with a single or narrow marketing focus, either specializing on specific merchandise, such as restaurant, clothing, toys or on a target audience, such as children, tourists, or locals. Size of store varies. Properties are tyically further classified as stand alone property, pad site, commercial cluster, or part of a mixed development. Factors such as location, psychography, and local daily patterns are important to property performance, as is the design of each space to maximize business performance.
Concept stores are stores that only stock one major brand. They are typically run by the brand that controls them, or by franchisors of individual stores.
A general store is a rural store that supplies the main needs for the local community;
A convenience store provides limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases as it often works with extended hours, stocking everyday;
Provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats.
A supermarket is a self-service store consisting mainly of grocery and limited products on non food items. They may adopt varying strategies for pricing. The supermarkets are typically between 10,000 and 100,000 square feet (3,700 m2).
A shopping mall typically has a range of retail shops at a single outlet. They can include products, food and entertainment under one roof or in close proximity. Newer properties are trending towards mixing retail spaces with office and residential use, called Mixed Use.
The customer can shop and order through the internet and the merchandise is dropped at the customer's doorstep or an e-tailer. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. Many Etailers are opening 'bricks and stick' stores in just a few key markets and locations, to help solidify their brand image footprint, and to use a showroom for featured products.
A vending business utilizes automated pieces of equipment wherein customers can drop the money in the machine and acquire the products. Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target. Some stores are self service, others vending stores are staffed.
Encompass larger department, discount, general merchandise, and warehouse stores.
Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behaviour. A good format will lend a hand to display products well and entice the target customers to spawn sales.
Retail Center Redevelopment
in Estes Park, Colorado
The National Park Village property in Estes Park,Colorado was originally developed over 40 years ago as an Owner/Operator property.
At the time CREA became engaged by the Owners, the Center and its 5 primary Tenants had all operated as a single business involving 3 generations.
The Owners and Managers of the business(es) had taken great pride in the Center, operating the property in the way it was originally designed for
However it became clear that the Leasing/Tenancy model and Property Management systems and had become functionally obsolete.
5.56 acre 36,500 squ ft
Mixed Retail Center Redevelopment
March 2013 - September 2015
CREA helped create 2 new entities, strategic communications and marketing materials, then recruited synergistic and strategic partners to the opportunity.
Using strategic relationships within the industry, CREA secured the purchase of the vacant 18,900 squ ft medical office building at a price significantly below the outstanding balance on the prior owners loan.
CREA drew upon its relationships within Wells Fargo, and within 100 days, closed funding with a Small Business Administration Loan..
Next the CREA team redesigned and repurposed the usage of the property, then put together a very specialized design-built team. Healthcare properties typically require much more attention to detail, and this property needed special attention.
Combining sophisticated marketing and communications tools such as the CoStar information platform, board associations with the Denver Metro Commercial Association of Realtors and our membership in the Certified Commercial Investment Member organizations, we wound up attracting a large number of interested doctors, healthcare practitioners, wellness care providers, then signed new leases.
We took the property from a market comparable lease rate of $8 psf NNN to signed new lease at $19 psf, and upon project completion, and as per plan, CREA sold its ownership in the building to a Tenant upon completion, doubling the properties value in under 10 months.from acquisition.