Hey there!

It has been quite a while. I’ve missed writing these notes and— from at least three of you— I’ve heard you missed them too. Thank you. There is so much to be snarky about in real estate these days, I feel I need to write at least a few more before AI does it for me.

The past year has been. . . interesting, no? So tumultuous that retail is the now the most-preferred CRE asset class. Can you believe it? We’re Number One. Lord it has been a long time since we were number one. Though this is as much a case of every other asset taking a step back as it is retail fundamentals, we’ll take what we can get.

Like all good things, retail’s time as Best In Show will surely end. Holiday spending is projected to be down. Those stimmy checks have finally run out. Everyone says the kids these days don’t want things, only “experiences” (and Lilly Sisto cardigans). But honestly I’d tell you that now is as good a time as any for retail.

So to the CRE folk who are a little down and sorta out: there is hope! Lots of it, in fact. Retail has been there, but we got out. In the spirit of the holidays I thought I would share a few notes we retailistas picked up from our long time in the desert. I hope they help.

1. Events matter. People have to want to go to whatever you built. Plenty of money and time is spent designing spaces, but filling them with people is what makes places (and rent). Our sister company Southern Culinary & Creative runs two hundred events a year for the nice folks at Water Street. Yes it’s a big place but even the small ones need activation, and you’ve got to do more than bingo.

2. If you see gum on the street, leave it. It’s not free candy.

3. Brand matters. With a straight face you can’t tell me why the Luminova Apartments are different from the Azurian or the Flyvia. Brand means more than a spliffy logo and a made-up name. In retail world it means having a Point Of View. This is possibly the most important retail skill you can have. Translating that viewpoint into a living breathing brand and and an actual place is where success lives.

4. Keep the leases short. God this bedevils the credit markets and I know the lenders are already grumpy, but it’s true. Why are we getting married for twenty years? Nobody wants that. Let’s try it out for a year or two first and see how we feel about the whole thing (bonus: charge tenants extra for the privilege).

5. True Religion Jeans were a terrible idea. Did we really lease space to those guys? That was a miss.

6. The old location rules are out the window. It used to be smart to put your retail on the busiest street with acres of parking (see #9). But that’s not true anymore. Big malls next to the highway died just as fast as those off it. Being in the right neighborhood still matters, but once you’re there then Location means what can you walk to, not what can you drive from.

7. Frank Sinatra or Morgan Wallen should not be on the playlist. I can’t stress this enough. For different reasons neither should REO Speedwagon or Tone Loc. Do you have a playlist? This is so important it may warrant an entire note.

8. There is no such thing as credit.

9. Parking is about quality, not quantity. Everyone obsesses about the number of spaces when they should be thinking about the design. Great lighting. Angled spaces. Fun signage. A number of small lots instead of one giant one. Tons of landscaping, even in decks. Easily accessed handicap areas. Get crazy and build some extra-wide spaces. And while you’re at it ditch the “compact car” ones. There are more credit tenants than there are compact cars in this country. First class spots only.

But the biggest lesson of all from the (overhyped) retail apocalypse? It’s about differentiation. When you try to make your project appeal to everyone then it actually appeals to no one. Take a chance. Dig in and pick a subset of people this thing is for. Is it for finance bros? Great. But there are no half-measures here. Hell is a hallway. Go all in. Give away New Venture stretch pants with every lease. Sell Patagonia vests in the lobby. You might turn off the artists but you’ll have a line of bros out the door. A line is good.

At this late stage of the capital cycle, differentiation is hard. When the chips are down so is the creativity it seems. When the project gets big and the budgets get bigger you can’t scrimp on the last $50K. Capital is worried and no one wants to make a bet, but now is the time! No one ever leased space because the elevator cabs were amazing (trick question: there is no such thing as an amazing elevator cab). It takes more to be different.

Make plans, gather money, get creative, apply some of these hard-won retail lessons to your own projects, and before you know it we’ll be running and gunning again.

What We’re Working On. Factory 52 in Cincinnati has come on line and we couldn’t be prouder of our role with the retail there. Ohio-based PLK rehabbed and re-built the old US Playing Card Company factory into a multi-phased mixed-use neighborhood. On the pedestrian side it has three parks, two breweries, an outdoor stage, retail, restaurants, the Gatherall food hall, and the first (and only) Jeni’s in town. If you’re in the area please go check it out.

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For those new here, I run a retail development and consulting shop in Atlanta, and I write semi-regularly about commercial real estate (or at least, I used to. If you don’t believe me, you can find past notes here).

If you’ve got a mixed-use project that could use some creative thinking — or any other building that needs a little differentiation— please reach out. We’d love to hear from you.