November 1, 2017
Gene Parker Discusses Value Creation Strategies For Multifamily And Retail Assets
The CRU Executive Series offers training and insight into current commercial real estate practices. The course offerings provide a behind-the-scenes view into investment thesis, strategy, and practice while providing networking opportunities to CRC’s investors, business partners and their team members. Gene Parker, President of Continental Realty Corporation (CRC) and David Donato, Senior Vice President, recently presented a seminar on Value Creation Strategies for Multifamily & Retail Assets held at the International Council of Shopping Centers (ICSC) headquarters in New York City.
The day started with a presentation suggesting that “Retail Armageddon” has not impacted every shopping center category, despite these frequent claims in the media. This is of course, despite the growing pace of consumers utilizing e-commerce for shopping, led by the popularity of Amazon.com. “This can best be demonstrated in the restaurant category,” Parker pointed out, citing a recent Forbes.com article. “While it is true that nearly 1,600 restaurants have closed this year, another 1,850 have opened, providing a net increase of approximately 250 new sites. Many have closed due to poor locations, over-saturation or over-expansion. Retailers are also growing, especially in the discount category. There are thousands more store openings planned in 2017 than store closings. While rapidly growing, it’s important to understand that e-commerce represents 8%-9% of all retail sales, leaving plenty of opportunity for brick and mortar retailers.”
Parker continued by explaining the due diligence process that CRC employs when evaluating a shopping center for possible acquisition. “Among the first things we examine is the rate of population and job growth in the immediate area, the available signage and visibility of the center, the tenant mix, parking and whether there exists any functional obsolescence in the project. We also examine the barriers of entry for new shopping center development.” Parker stated.
“Even though consumers visit our centers and leave with a shopping bag, 50% of our shopping center revenue is from non-retail tenants such as medical, health, fitness, restaurant and entertainment. This diverse tenant mix helps insulate us from those retail categories which are experiencing online rapid competition” he added.
Parker provided additional insights by reviewing several case histories on CRC-owned shopping centers in Maryland, North Carolina, South Carolina and Florida. “Anchors are hard to come by, and while we have no reason to believe we are at risk of losing any, it’s comforting to know that the per square foot rents for our anchors are very low. At these rents, our leasing team can more easily find suitable replacement tenants if the need arises.”
The CRU Executive Series is an offering of Continental Realty University (CRU), CRC’s in-house university established in 2013. The CRU Executive Series is also approved to offer continuing education credits for CPA’s. If you are interested in attending an upcoming CRU Executive Series course, or arranging a specialized course for your team, send inquiry to Gene Parker, President of CRC.
Continental Realty Corporation (CRC), headquartered in Baltimore and founded in 1960, is a full-service commercial real estate investment and management company. The privately-owned firm owns and manages a diversified portfolio of retail centers consisting of over 3.5 million square feet of space, as well as apartment communities featuring nearly 10,000 apartment homes. Positioned throughout the Mid-Atlantic and Southeast regions, the value of the portfolio exceeds $1.5 billion.