(P)RECoN: A LOOK AHEAD Chain Store Age

For virtually everyone from shopping center executives and development professionals to retailers, financial companies and product and service providers, the annual RECon conference in Las Vegas is one of the highlights of the year. The International Council of Shopping Centers (ICSC) event is the world’s largest retail real estate exhibition, with over 40,000 attendees com­ing together every spring to present new ideas, discuss and debate old challenges, and present new and exciting projects to a group made up of the industry’s most influential professionals. This year’s event will be held in the Las Vegas Convention Center & Westgate Hotel May 22-25. And, while after-action recaps and post-conference breakdowns will be plentiful, we’re looking ahead to preview the iconic event through the eyes of professionals who have been there before and know what to expect. With that in mind, we reached out to a diverse group of conference veterans, including some of the industry’s foremost thought leaders and experienced retail real estate professionals, to get their thoughts on what the hot topics on the floor of the convention are likely to be, what projects and concepts they are looking forward to learning more about, what markets are on the upswing, and what external forces are shaping the industry’s evolution.

YAROMIR STEINER
Steiner+ Associates

What are the top three hottest topics we can expect to hear about at RECon this year?
We’ll definitely be talking about how retail­ers need to reinvent themselves to integrate omnichannel retailing (including strategies they can adopt to do so successfully). The slow adaptation of brick-and-mortar retail­ers to the omnichannel world is an important and continuing story line. Some clear1y “get it” (Victoria’s Secret, Apple, Pirch, Restoration Hardware), but others have a long way to go. Mixed-use also remains a hot topic, specifically how the retail development industry functions in today’s increas­ingly mixed-use world. We will see more mixed-use projects through­out the country, but on a smaller scale. We will also hear more about the ever-growing role of food in retail environments.

Are there any projects or retail con­cepts you’re looking forward to learn­ing more about?
I think The Triangle in Costa Mesa, California, is a fascinating and important project because of its integration of restaurant and entertain­ment components as the primary drivers in a town center format. Now that it is open, we are looking forward to showing what we have done at Liberty Center to the industry.

TODD SACHSE
SACHSE Construction

What projects or concepts are you looking most forward to or interested in this year?
We’re really interested in how consumers’ desire to live within walking distance of ameni­ties and activities is driving retailers to move into urban areas in new and creative ways. We’re seeing a lot of these retailers moving into older buildings and converting them into interesting and dynamic places that show off the unique architectural details of the existing structure. From a construction perspective, we are used to working with conventional materials in tradition­al environments, like a mall that was built within the last 20 or 30 years. Now, we are increas­ingly working in buildings that are 100 years old. There is a challenge to incorporate new and modern technology, displays, and lighting into these older structures, and it’s frankly very exciting.

Which markets excite you?
San Juan, Puerto Rico, and Hawaii are both very exciting markets to work in. Although San Juan has a very challenging economy, there is still a strong upper middle class, which is driving new retail into the market. We see this particularly at the Mall of San Juan, where we just completed overseeing the tenant coordination.

What talks or topics are you most interested in learning more about?
We are particularly looking forward to the sessions discussing how urban retail is impacting the over­all marketplace, and to topics cov­ering technology and social media.

SPENCER BOMAR
Avison Young

What are the hot RECon topics on the agenda this year?
Urban revitalization is a big one, especially how this phenomenon has contributed and continues to contribute to big-box evolution and right-sizing. I believe we’ll hear more about how many landlords are reevaluat­ing category killers and their perceived advantages and disadvantages. New FASB accounting standards for lease transactions are also likely to be on the agenda.

What markets are particularly active and exciting right now?
The Southeast remains strong, and both Virginia/D.C. and Florida’s growth and appreciation continue to amaze. Despite plunging oil prices, Texas remains strong, and anything on the West Coast is in high demand. I also expect a great deal of new activity in rapidly evolving secondary markets.

What speakers/sessions are you most excited about?
Magic Johnson for the kick­off is something special to look forward to. But I’m excited about “Increasing Income through Superior Customer Experience” on Sunday, “The Future of Retail” on Monday, and Tuesday’s
“Leasing Outside the Gateway Markets.”

JASON BAKER
Baker Katz

What are some of the headline topics we can expect to hear about at RECon 2016?
I’ve talked to brokers from all around the country, and the general consen­sus is that the market is improving. Retail strength and activity will certainly be a major topic, particu­larly as multi-family and office continue to struggle in some mar­kets. Continued urban development is also maintaining momentum. It’s all about urban living right now, and the cre­ative re-use of buildings is prevalent.

How is the low price of oil affecting Houston?
We hear a lot of buzz about $35/barrel oil nega­tively impacting retail. In Houston, while retailers are expressing an under­standable level of concern, store sales have not been negatively impacted due to a lack of consumer con­fidence thus far. Multi-family and office, however, are different stories – both of those sectors have been hit really hard.

What retail concepts are on your radar that are likely to be discussed in Las Vegas?
Sporting goods stores, entertainment con­cepts and restaurants (and not just fast casual) are all hot right now. Retailers like Field & Stream and Dick’s Sporting Goods remain robust. Active entertain­ment concepts are also thriving, including Pinstripes and Momentum Indoor Rock Climbing.

JONATHAN LAPAT
X Team International

What are the big topics you think we’ll be talking about at RECon this year?
The complex and evolving relationship between brick-and-mortar and online remains a key issue. I also think we’ll be hearing a lot about food and the notion of QSRs as the new anchor. I think we’ll also hear about the importance of developers and landlords to have the ability to reinvent themselves in order to keep the shopping experience fresh. In Boston, two of the big projects in the city
(Seaport Square and Millennium Tower) are quintessential mixed­-use projects that are able to accomplish this feat.

What external factors do you see currently impacting the industry? I think it’s a constellation of factors. The presi­dential election looms large, as it always does – both consumers and Wall Street are leery of the changing of the guard. Oil prices inevita­bly have an impact on con­sumers’ disposable income. And I think there’s continued uncertainty around interest rates. They remain low, but there is a lot of uncertainty how many times The Fed will raise rates this year.