Moderator: Matt Hendy, Vice President, Market Officer, Regency Centers
Panelists: Patrick Anderson, Vice President, Crow Holdings | Marc Panzer, Senior Vice President, Real Estate, Williams-Sonoma, Inc. | Tim Phair, Co-Founder and Principal, L3 Capital
Tim Phair (L3 Capital)
- L3 Capital focuses in top 7 markets
- Retail market remains ‘binary’ with a sharp divide between strong and weak submarkets, tenants, and centers
- New demand has been recently driven by tenants looking for smaller space (1,500 to 3,000 square feet) in more affordable submarkets
- High cost, prime, high street locations such as Lincoln Roads have seen tenants unable to afford ‘out of control’ rents and vacancies have allowed rents to drop by as much as 60 percent from the peak.
- Strongest centers are located in areas with a mixture of drivers including residential and office. Tourism related traffic appears more risky of an investment.
Marc Panzer (Williams-Sonoma, Inc.)
Current Retailing Strategy:
- Williams-Sonoma is focusing on developing customer experience centers with design centers and more cooking classes to drive traffic
- Focus on making access as easy as possible for consumers
- Current preference is for lifestyle and power centers over malls
- While continuing to grow its smaller West Elm brand, the real estate strategy for its more mature brands remains right-size and balance
- No longer necessary for centers to be pure lifestyle type tenants as consumers shop across the spectrum. Projects with a value component, such as Nordstrom Rack or HomeGoods, works well for Williams-Sonoma.
- Local tenants help provide a center with a unique experience that improve the attractiveness of the opportunity
- Occupancy cost and sales must work for the brick-and-mortar store ignoring e-commerce. Not currently factoring in e-commerce halo into store performance metrics.
Matt Hendy (Regency Center)
- Retail apocalypse is overblown, but we remain over retailed
- Currently remains a tenant favorable market with aggressive TIs for new tenants and even for renewals depending on the space category
- Larger tenants (10,000 sf +) currently have leverage given the number of those spaces available and the limited number of retailers of that size.