Property Managers Must Be Flexible To Meet Tenant Demand, Maximize Revenue
The demands of property management can change like shifts in the wind. How do you keep on top of it? We asked the experts we've lined up for Bisnow's Chicago Adaptive Reuse Revolution and Property Management event, 7am Tuesday, Sept. 20, at Trump International Hotel & Tower to share their insights.
These days, JLL SVP Sylvia Payette (pictured with her son and granddaughter) says she’s focusing on looking for various ways to enhance a retail asset’s value and revenue generation. That could mean developing an outparcel, reworking inline spaces for short-term pop-ups or community events, and even working with companies that may want to make use of vacant window space at shopping centers for creative advertising. Sylvia and the owners of the retail assets she manages are looking for ways to be more sustainable and sensitive to the environment. They are also exploring how to use tech to enhance the consumer and tenant experience, make purchases easier, add interactive virtual elements to retail environments and gain efficiencies on the property management side.
Sylvia says vacant space in retail is holding steady and she’s seeing a lot of interest from restaurants and entertainment ventures, because a growing number of consumers are looking for experiential components with their shopping. Example: one Midwest shopping center did a deal with two unique entertainment complexes, Top Golf and Main Event, which enhanced the tenant flow because it added a different component to the center’s programming. Another example: Sylvia hears some QSR concepts are using drones to deliver food both in and around retail centers.
Sylvia sees a reduction in the amount of dark space in suburban shopping centers, thanks to interest from nontraditional retailers, as generational demographics evolve within the consumer dynamic. Retailers are responding by looking for the best fits within that evolution. The main drivers continue to be Millennials (who are starting to acquire more financial resources and are leading the charge in the experiential component) and Baby Boomers who are embracing some of the tech advancements the Millennials are bringing to the retail experience. But Sylvia says don’t forget Gen Xers. They aren’t as big or as influential as the Boomers or Millennials, but they have plenty of income power and also bring tech savvy to shopping.
Merit Partners partner Paul Fishbein says property management can be challenging with ambitious adaptive reuse projects such as Merit's 600 West Chicago Ave and The Fields (which we toured with Paul last year) because of all the different users under one roof. Paul says the toughest users to satisfy tend to be office and loft space, because of the detailed requirements in their spaces. Self-storage is the least demanding because it requires little service, and retail is somewhere in between.
Paul says Merit is applying many of the lessons learned repurposing 600 West Chicago to the Fields, but that building doesn't have the industrial component of the Fields. Luckily, Paul says Merit has plenty of experience across all of the asset classes.
Speaking of the Fields, Paul says progress on the project is falling into place, exactly as Merit master planned. A 70k SF Cermak Fresh Market opened in May and a 126k SF self-storage facility is opening next month. Merit is in the process of getting permits for 80 residential live/work loft units ranging from 800 SF to 2k SF, and expects to begin construction near the end of the year. The lofts will be available in late summer 2017.
Paul says there is significant tenant demand for The Fields' office component from high-density call centers. Paul says the property's HVAC is designed to accommodate the different asset classes. The system is designed for density, which is key when an office tenant is looking at providing air conditioning to workers occupying 110 to 120 SF/person. The Fields has all-new electrical systems running into the complex, and the building has significant fiber connectivity.
To learn more, attend Bisnow's Chicago Adaptive Reuse Revolution and Property Management event, 7am Tuesday, Sept. 20, at Trump International Hotel & Tower. Register here.