25 minute read
Industry News
from CCR Issue 7.22
AroundtheIndustry
Retail
Walmart
Walmart will spend $57 million to revamp its 25 namesake and Sam’s Club stores in Puerto Rico with tech-centric improvements, including new checkouts and order pickup facilities as well as infrastructure upgrades.
Kohl’s
Kohl’s plans to open about 100 small-format stores over the next four years as part of a plan to enter markets where it doesn’t have a brick-and-mortar retail presence. The retailer also will invest $850 million this year to open 400 more in-store Sephora shops and update stores with features including zones to highlight emerging and women-owned brands.
Lowe’s
Lowe’s has cut its direct and indirect greenhouse gas emissions by 42% over the previous five years, ahead of its initial goal of a 40% reduction by 2025. Incorporating more renewable energy sources helped the retailer cut its energy use by upward of 10% in 2021. The retailer has set a new emissions reduction goal of 60% by 2030.
Chef’stores
Foodservice distributor US Foods will expand its retail presence with the opening of four brick-and-mortar Chef’stores, which cater to consumers and culinary professionals. The stores offer restaurantquality ingredients in individual packages and cases as well as kitchen equipment.
Evolution Store/7-Eleven
7-Eleven has opened the fifth Evolution Store in the Dallas-Fort Worth area, establishing the ninth location nationwide for the concept, which includes in-store eateries and digital features. At the latest location, customers can order food and drinks from Laredo Taco, choose from various kinds of grab-and-go coffee and pay for items through the 7Rewards app, rather than using regular checkout.
Circle K
Circle K will install self-checkout machines that use artificial intelligence to automatically ring up items at 7,000 locations over the next few years. After testing the machines in 500 of its convenience stores, the retailer partnered with California-based startup Mashgin on the machines.
Forever 21
Forever 21 will open a brick-and-mortar store in China with operating partner Lasonic Electric Xusheng Co., which also operates the US-based fashion retailer’s online sales in the country. The new store, slated to open in the third-tier city of Taizhou, marks the third time Forever 21 has tried to break into physical retail in China.
Restaurants
Panera Bread
Panera Bread aims to double its presence in urban markets with the rise of its new To Go format, which focuses on digital orders for offpremises dining. Panera launched the concept in Chicago, and plans to add locations in Southern California and Washington, DC.
Popeyes Louisiana Kitchen
US fried-chicken chain Popeyes Louisiana Kitchen will open six new restaurants in the UK, where its first location has become the brand’s best-performing restaurant globally since it launched last year.
Chipotle Mexican Grill
Chipotle Mexican Grill continues to evaluate the possibility for adding drive-thru Chipotlanes at more of its 3,000 locations and now it has begun testing walk-up windows at units where drive-thru isn’t possible. Walk-up windows will work better at urban locations that are smaller and see significant foot traffic.
Nomoo
Plant-based quickserve concept Nomoo plans to grow beyond its single Los Angeles location through franchising. The brand, which signed on as Fransmart’s first plant-based partner, features an indulgent menu of burgers made with Beyond Meat patties and other vegan versions of quickserve favorites including chicken sandwiches, shakes and fries.
Beef-A-Roo
NEXT Brands and Development is on a mission to turn 55-year-old Illinois-based Beef-A-Roo from a regional icon into a national name. NEXT, which acquired the franchise rights last year, aims to grow the chain from its current nine locations to about 50 in the next few years with two formats, one of which will be drive-thru only.
Tim Horton’s
Tim Hortons is offering two new models of its restaurants, including a 900-square-foot drive-thru-only version in West Virginia. The new model also features a mobile pick up shelf and VIP mobile order parking spots. The first drive-thru-only model will open this summer. The company said additional Tim Hortons units are planned throughout 2022 across Michigan, New York, Ohio and West Virginia.
AroundtheIndustry
Jim ‘N Nick’s
Alabama-based full-service chain Jim ‘N Nick’s Community Bar-B-Q has launched “fast casual plus” service at four existing eateries and one new restaurant. The model calls for customers to order at the counter and grab their own drinks, followed by table service for the rest of the meal.
Hospitality
Gaylord Hotels
Construction of the $1.35 billion Gaylord Pacific Resort and Convention Center project in Chula Vista, California has been approved by a $275 million public bond deal agreed upon by the city and the Port of San Diego. Mortenson and McCarthy Building will build the venue, which will include a new park and various other improvements along with the 1,600-room hotel.
Choctaw Landing
Construction is set to begin on Choctaw Landing in Hochatown, Oklahoma, the Choctaw Nation’s new $165 million casino complex. The four-story venue, which is expected to open in late 2023, will feature 600 slot machines, eight table games, a 100-room hotel, a pool and a variety of dining options.
Circus Circus
Circus Circus is in the midst of a $30 million facelift meant to bring the Las Vegas casino-hotel back to its “glory days” and give it more of a circus feel. The renovations, which have been going on since 2019, range from a brighter, more vibrant paint job and a larger, modernized pool to a refresh of the red-and-white striped tent-top.
Fairmont Hotel and Residence
Just a couple of blocks from the sports and entertainment district in downtown Phoenix will soon be the new home for a new Fairmont Hotel and Residence. Fairmont Hotels & Resorts, along with Thunderbird Legacy Development, recently announced plans for the development and management of a new building. The Fairmont Phoenix is scheduled to open in early 2025.
Potawatomi Hotel & Casino
An extensive renovation project at Potawatomi Hotel & Casino in Milwaukee will feature an exclusive high-limit room, 1,800 slot machines, multiple 4K televisions and a Rock & Brews restaurant that will include a stage for live performances. The 120,000-square-foot project will cost $100 million and is slated for completion next spring.
Hyatt Hotels
Hyatt Hotels and local upscale developer Gencom propose to build a three-tower complex with a 615-room hotel and 1,500 residences on the site of the city-owned downtown Miami Hyatt Regency. The partners say they hope to begin construction in 2025 if the Miami River Commission approves the privately funded venture.
Joinery Hotel Pittsburgh
Curio Collection by Hilton labels its new Joinery Hotel Pittsburgh as “the place to be” for people who call the city home and those just passing through. The 185-room boutique hotel will open its doors in June, in the Downtown building that currently houses Distrikt Hotel Pittsburgh at 453 Boulevard of the Allies.
Grocers
HMart
Lyndhurst, New Jersey-based specialty grocer HMart will open two new stores this month—one in the Aloha State and the other in Massachusetts.
Whole Foods Market
Whole Foods Market is taking more of Manhattan with a new store at 63 Madison Avenue. The location in the NoMad (short for North of Madison Square Park) neighborhood opened in June.
Amazon Fresh
Amazon Fresh has announced its entrance into the metro New York market with two stores—one in a former Fairway Market site in Paramus, New Jersey, and another in a former Waldbaum’s supermarket location in Oceanside, New York. The Oceanside location also will be the retailer’s first of three stores slated for the Long Island suburban market, with stores planned for Plainview and East Setauket.
Kroger
Kroger customers in South Florida can now place delivery orders despite the grocer having no physical stores in the area. The new service is made possible by a 60,000-square-foot e-commerce fulfillment facility in Miami, one of 10 planned fulfillment facilities powered by technology provider Ocado.
It’s a Elle thing
ELLE Magazine is adding a hospitality arm (ELLE Hospitality), and two boutique hotel concepts (Maison ELLE and ELLE Hotel) to its array of offshoots. This is the first new venture for the French global media French Lagardère Group, which says the properties will play a strong role in immersing guests into everything ELLE demonstrates throughout their iconic magazines. The first hotel will be the Maison ELLE, slated this fall in the company’s hometown of Paris.
Making diversity a priority
Capital and operational support. Outreach and education. These are the tenets of Wyndham Hotel & Resorts’ BOLD (Black Owners and Lodging Developers) initiative, which will help boost African-American participation in hospitality development, franchising and transactions. According to the National Association of Black Hotel Owners, Operators and Developers (NABHOOD), fewer than two out of every 100 US hotel owners are Black. That statistic contrasts with a McKinsey survey that found that about one in five Black Americans is starting or currently running businesses.
What they’re saying...
— Chef Jean-Georges Vongerichten on the continued growth of the fine dining sector
“Our city has made significant strides since its darkest pandemic days, and our industry continues to lead the way forward. We must find ways to keep that momentum going and avoid an outright housing crisis in New York, and that includes find innovative ways to repurpose existing misused space and increase affordable housing stock. This is no time to ease off the pedal of progress.”
— Carlo A. Scissura, President & CEO of the New York Building Congress on the progress the New York area continues to make in construction
— Tractor Supply CEO Hal Lawton on how the retailer is adjusting to supply chain delays
Total construction starts slide 5% in June
Broad-based weakness in the building sectors dragged down construction starts Total construction starts fell 5% in June to a seasonally adjusted annual rate of $932.3 billion, according to Dodge Construction Network. Nonresidential building starts lost 14% during the month and residential was 6% lower. On the contrary, nonbuilding starts gained 13% in June due to the start of several large solar projects. Year-to-date, total construction was 5% higher in the first six months of 2022 compared to the same period of 2021. Nonresidential building starts rose 13% and residential starts gained 3%, while nonbuilding starts were 2% lower. For the 12 months ending June 2022, total construction starts were 7% above the 12 months ending June 2021. Nonresidential starts were 17% higher, residential starts gained 5% and nonbuilding starts were down 2%.
MONTHLY CONSTRUCTION STARTS
(Millions of Dollars, Seasonally Adjusted Annual Rate)
Jun 2022 May 2022 % Change
Nonresidential Building $300,977 $351,408 -14
Residential Building 428,306 453,730 -6
Nonbuilding Construction 202,978 179,842 13
Total Construction $932,261 $984,979 -5
YEAR-TO-DATE CONSTRUCTION STARTS
Unadjusted Totals, in Millions of Dollars
6 Mos. 2022 6 Mos. 2021 % Change
Nonresidential Building $160,954 $142,182 13
Residential Building 224,670 218,059 3
Nonbuilding Construction 99,144 101,587 -2
Total Construction $484,768 $461,829 5
Source: Dodge Construction Network
The numbers game 4,328
The number of announced store openings in the first half of 2022, according to Coresight Research. There also were 1,912 announced closures. Analysts point to signs of moderate softening and others are seeing continued strength.
5,220
The historic number of new US hotel projects slated for Q2, according to Lodging Econometrics. The number is a 9% increase over the year before.
422
The number of new building filings in New York City during Q2, a 19% increase year-over-year, according to the “Quarterly New Building Construction Pipeline Report for Q2 2022” by The Real Estate Board of New York (REBNY). Proposed construction square footage in Q2 2022 totaled 15 million square feet.
Addressing the Workforce Skills Gap
Construction Ready partners with Goodwill Industries of the Southern Rivers in Georgia
Construction Ready has partnered with Goodwill Industries of the Southern Rivers to expand its adult construction training program in Columbus and Albany, Georgia. The 20-day adult program provides eligible participants with the training needed to gain the skills required to obtain and retain a living wage job in the construction industry. Goodwill Southern Rivers plans to bring at least eight Columbus and Albany residents to each training cohort. The goal of the program is to help close the workforce skills gap. Since expanding into the Columbus region in 2021, Construction Ready has graduated 14 students placing them in jobs across western Georgia. The need for skilled workers has continued through the pandemic. Closing this skills gap and educating more people about careers in the skilled professions is Construction Ready’s primary goal. “We are excited to partner with Goodwill Industries of the Southern Rivers to strengthen our efforts in Columbus and Albany,” says Construction Ready President and CEO Scott Shelar. “When we hear their success stories and see new graduates entering the construction industry, it confirms we are making a difference for so many Georgians who are looking for a new career.”
Since 2014, the Construction Ready adult education program has trained more than 1,300 workers of all ages for a successful career in construction. Successes of the program include: > 97% job placement by end of training > Average starting salary of $13-17/hour > 70% of participants employed with the same company one year later
Jack Warden, CEO, Goodwill Industries of the Southern Rivers, says equipping people with the skills they need to provide for themselves has been our core mission for over 125 years. “Partnering with Construction Ready continues our tradition of helping people change their lives through the power of work. We are excited to help individuals launch a sustainable career.”
Are you an Innovator or a Commander?
First CCR webinar shows the mindset and skill sets needed to solve problems
It is not all about the product. Businesses new and old need to solve problems in environments where their talents and services are both known and needed. That is how Zachary Green introduced the importance of warrior skills in business during his recent Commercial Construction & Renovation webinar, “Are You an Innovator or a Commander?” The webinar was sponsored by Pivotal Retail (https://www.pivotalretail.com). The former US Marine, firefighter, CEO and the best-selling author of “The Warrior Entrepreneur, spoke extensively about his military training and its invaluable role in growing a successful business and overcoming challenges—which nearly Zachary Green derailed the company that eventually earned more than $30 million in revenues. Green said that most small businesses fail within the first six years and that nine in 10 are out of business within 10 years. "I’m sure this is no surprise to the millions of contractors who have tried to launch businesses, no matter their expertise or skill sets. Unfortunately, the journey and miscues are typically the same over and again—a continued emphasis on the product rather than marketing, sales and distribution." Green says these were among the many lessons he learned while growing MN8 LumAware/Foxfire, a leading manufacturer and supplier of photoluminescent firefighting and building evacuation safety equipment that he grew from the trunk of his car to a multimillion-dollar organization. “I went from $5,000 in sales over six months to $100,000 in orders after attending my first trade show,” Green said. “The problem is that I had no way to fulfill the requests. As a result, I nearly lost it all after refinancing my home, borrowing
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against my 401K and maxing out my credit cards just to keep up.” Thankfully, his military training gave him something he needed exactly for situations like these—grit and drive. “This includes the will to never give up until the mission is accomplished. The truth is most businesses fail because their leaders simply give up in tough times.” Armed with the mindset of a US Marine and years of business research, Green penned "The Warrior Entrepreneur" to voice his learnings and help business owners turn hardship and adversity into growth tools:
Solve problems in unique and elegant ways
Contractors should always look to partner with customers to fill voids and provide long-term services. Offer remedies that improve production, reach and safety through products and skills that are novel to the marketplace and their clients
Work toward unfair competitive advantages
Nothing illegal or unethical. Because most entrepreneurs start out smaller than many established players in the marketplace, they must leverage the advantages they do have. This includes cementing client relationships with exclusivity agreements that benefit customers with the steady access to hardto-get materials, talent and services
Focus on robust sales, marketing and distribution efforts that reach key, target audiences
Remember the Pet Rock from the 1970s? The concept made millions of dollars. It was a rock. Great sales support, marketing and distribution drove the mind boggling sales of a product you could pick up in your own backyard. Never underestimate the value of these three components. No one can buy your product or services if they do not know you exist and your services are not readily available
Know your role
Are you an innovator or commander? Innovators normally start businesses with great ideas and the need to be involved in the entire decision process. However, the bandwidth of successful companies can soon become far too overwhelming for one person to handle, no matter the vision. And that is where the separation between church and state must come into play. Good commanders should be allowed to work “in” the business dedicated solely to the organization’s successful, day-today operations, while innovators will be left with the unfettered opportunity to focus on the external growth of the company. This includes relationship building, new business development and the ongoing expansion of goods and services to fresh markets. For a recast of the webinar, visit https://youtu.be/ifd9yhGIioo.
To Boston with networking...
RCA members take on the Harpoon Beer Hall in Boston’s Seaport District
What could be better than a guided tour and networking with some old friends? If you ask members of the recent RCA Networking Regional Event in Boston, well, you know the answer. The networking event, held at Harpoon Beer Hall in Boston’s Seaport District, included the aforementioned 25-minute Guided Tasting tour, which included a walk through of the brewery, along with samples and background of each beer flavor. Upcoming RCA network events are slated for Denver (September/October), New Orleans (November) and CenterBuild in Phoenix (November 30). For more information, contact info@retailcontractors.org.
Get ready to budget
Why you need to do the work before the spreadsheet
By Melody Frcek
The budget season is quickly approaching. For some property managers, it is filled with anxiety and dread, while others embrace the process. Regardless of your heart rate, the approach to budgeting needs a “pivot” as we weather the effects of the Pandemic.
Today, real estate continues to evolve. Owners of office and retail assets are seeking opportunities to attract tenants and activity back to the properties, while owners of medical and industrial facilities are identifying ways to partner and support tenants dealing with a surge of activity. Regardless of the real estate sector, the challenges are new, but adding value is still top priority. To do this today, discard what worked in the past and welcome new possibilities.
To usher a new era to your property, consider these tactics: No. 1 — Survey Your Tenants
Really, the only starting point. Most management companies provide a survey tool as part of the work order system. If not, Survey Monkey is a good alternative. It is time to learn about tenants’ short- and long-term plans and how you can support them. What do they need? What can you provide and how can you plan? For example, is your tenant requiring its workforce to return or is a hybrid model at play? How does that affect its space needs? How has the business changed since the pandemic? Are additional or different utilities needed? What amenities would make employees feel safe and secure? Is a new sanitation protocol needed? The answers to these and many other questions create opportunities for you to provide services that tenants need and create additional revenue streams with an administration fee. Be creative. Ultimately, it is a win-win for the tenant and the owner.
No. 2 — Know Your Competition
Walk beyond your walls and see first-hand other buildings in your area. What are they providing that your building doesn’t have? How can you make your building top-choice among potential tenants? Take a look at the parking lot—is it full? What condition is it in? Take a look at the lobby. Make note of what amenities are offered.
EST 2010
Read and listen to the experts. What trade associations are active in your market? What programs can you attend? What events will give you the opportunity to network (and learn from) other managers? You always should know what your competition is doing. Otherwise, you may be late to the game.
No. 3 — Develop a Three- to Five-year Capital Budget
Here is where you will spend the largest dollars. Work with your engineers to review all systems and maintenance schedules and plan for repairs and replacements. But there is more. Go beyond infrastructure to ensure the asset remains relevant within the market. The tenant experience begins the moment a tenant enters the parking lot. Is it clean, safe, smooth, painted? Then to the lobby. Is it open and bright? The entrepreneur is on the rise, and these companies want amenities—fitness centers, conference rooms, grab-and-go markets, lactation rooms, lounge areas, flex space. Budget and plan for upgrades and improvements to create value for the asset, the owner and the tenants.
No. 4 — Develop a Leasing Plan
Leasing is critical to building operations, and the leasing agent is your best resource. Know when leases are set to expire and the intentions of the tenant. What are the projected leasing and tenant improvement (TI) costs? (And do not forget the fees absorbed when deals die.)
No. 5 — Rebid Recurring Service Contracts
Do this now. Don’t assume you are getting the best value. Benefit from a competitive market and think like an owner. Do a cost analysis. By doing the due diligence, you add value to the property and strengthen your partnership with the owner.
No. 6 — Meet with the Asset Manager or Owner
It is important to understand the investment strategy and where the asset is in the investment cycle. Come equipped with the information you collected above and recommendations on how to create value. A solution-oriented approach to reduced occupancy, capital expenses and other challenges makes you a vital team player. Now you are ready to create a budget. But let’s do it without the anxiety and dread. Have fun. Tap your team. Order lunch and brainstorm. Dream big and then plan real. Take a tenant to lunch each week to pick their brain. Connect with other property managers at trade events and meetings. Hopefully, you will be inspired by others to think outside the box. Property management is a balancing act. Your job as the manager is to balance the needs of the tenants with the needs of the owner. It is not easy, but it is rewarding. You are the greatest asset your owner has, and a well-informed, well-planned budget is the most important tool. CCR
Over two decades of property management experience shape Melody Frcek’s role as VP of Property Management at OA Management Inc. She oversees the staff and operations of the property management division, which manages sister company OA Development’s 2.1 million-square foot portfolio. Melody’s strong financial background and problem-solving approach ensures OAM remains competitive and proactive in its management style positioning tenants for long-term success.
Give me shelter
How you can protect your buildings from climate change
By Andy Simmons
Editor’s Note: This is the final installment in a three-part series on what commercial construction professionals should know—and do— when it comes to insuring their projects amid today’s ever-changing climate.
As extreme weather and storms become stronger and cause more property damage, now is the time for building owners and property managers to secure their facilities and bolster their protections. Through updated building codes, advancements in technology, and meaningful infrastructure improvements, businesses can make a difference in protecting their property and reducing losses.
Stronger Building Codes to Withstand Storms
It is not uncommon to see the destruction that a hurricane or tornado leaves behind. From torn roofs to collapsed buildings, weather catastrophes have the potential to cause a large amount of damage. But stronger building codes are one of the best ways to make sure property can withstand catastrophes. Florida for example implemented changes to its building codes after Hurricane Andrew, and then again in 2007 after the Hurricanes of 2004 and 2005. New construction since then has made houses and buildings significantly more hurricane proof. Buildings constructed 30 years ago were likely built with codes that may have neglected the impact of strong winds from an extreme hurricane or significant rainfall that a storm can bring, especially along the Atlantic and Gulf coasts. One way that states can strengthen their building codes to reduce losses is by simply addressing roofs. For example, sealing the roof deck can help prevent water from entering the building if a roof tears off. It is a small expense during installation, but it can save tens of thousands of dollars in the long run.
Using Technology as a Proactive Measure
Advancements in technology also have led to devices and building materials that can help protect a building in severe storms. Connected devices can monitor buildings and identify problem areas with leaks. As usual, after a storm passes, it always is good to check and document any initial damages. Sometimes, storm damage can lead to large property losses because of water. By installing water sensors in a building, owners and managers can get alerts of water intrusion or leaks. This is particularly important if the building or facility has had a history of water damage because these kinds of devices can capture an issue before it becomes a major loss. The difference in damage costs from being able to quickly respond to a leak compared to not realizing something happened and letting hours go by is significant. Given the potential cost-savings, it also is practical for businesses to install water sensors even if the building is newer or has not had a history of claims.
Meaningful Infrastructure Improvements
While many existing homes and buildings may not have been built to withstand storms or water damage, owners can make them storm hardened. This means improving the infrastructure to better withstand these kinds of losses. By storm-hardening a building, owners can help prevent potential damage from heavy winds and water. While it can be a nominal upfront cost, the return on investment can be significant. For example, improving the framing inside a building can make a facility stronger and reduce the amount of potential damage during strong winds from a hurricane or tornado. Building owners can also ensure that there is proper drainage and flood protection during construction to help reduce the loss of equipment or inventory. It is a good idea to conduct a storm-hardening assessment of the building to provide a starting point of what areas to address and what can be done. Some structural areas to look at include building envelope evaluation, wall types, roof types, windows, doors, exterior drainage, and landscaping. In addition, it is prudent to note the location of air handling units, water supply, critical electrical or mechanical equipment, and whether an emergency generator has enough capacity to deliver the necessary power during an outage. Other considerations for building owners and property managers include installing stronger walls or shatter-resistant windows in their facilities, which can help prevent water from ever entering the building. In addition, they can keep the people inside the building safe during harsh weather because if a window were to break, the glass won’t scatter all over.
A Partner with Experience
While it is difficult to predict what the future will look like when it comes to storms and extreme weather, it’s important for building owners, property managers and developers to partner with an experienced carrier that can help protect facilities and mitigate losses. It is expected that hurricanes, tornados, and wildfires will only increase in severity, and the risks and challenges that building owners will face requires innovative technology with specialized insurance solutions to help protect businesses in many industries. CCR
