Big Box, Little Grocer: A Guide for Keeping UpBisnow, August 2012
Hopefully you've been storing dry food and iPad apps in the office bunker so you'll be prepared when the new retail normal comes.That means different store configs and cutting-edge tech, according to Timberline Construction prez Steven Kelly, who spoke at last week's Bisnow Boston Retail Summit.
We snapped Timberline's Nicole DeBenedictis and Megan Lewis with Steven, also an event sponsor, during the pre-game schmooze.The GC, now working in all six New England states and New York, continues to expand throughout the Northeast to accommodate retail clients seeking broader regional coverage. As the industry adjusts to shifting economic conditions and the ascent of online shopping, some retailers are leaving big boxes in favor of creating unique, downtown spaces. Steven is all for the challenge; it’s fun and interesting to build one-of-a-kind spaces. He grew up in the industry and change keeps his work exciting, he says.
Sean Selby and principal Bob Lowe of event sponsor Arrowstreet say they’re working on Chestnut Hill Square for New England Development, which includes a new Wegman’s under construction.The Somerville-based architecture and design firm also has done several LL Bean stores the past few years (hope they got some free Allagash-bison hand sewn oxford moccasins) and recently completed Magic Beans, a boutique children's toy store at the Pru. Arrowstreet principal Scott Pollack says that since it’s more difficult than ever to predict the size and type of tenants 10 years out, Arrowstreet is helping clients find new approaches to design and construction to create space that’s more flexible than ever.
Colliers EVP Ted Chryssicas, a long-time retail broker who stopped by our event, cautions against underestimating the challenge of reconfiguring big boxes. As smaller tenants seek to replace giant stores in spaces that were designed to last-generation specs, it can be difficult to split utilities and relocate HVAC, restrooms, and loading docks. His team is working on floor plans that can be puzzling at first. But the changes are good for some retail submarkets, like Newbury Street in the Back Bay, where the vacancy rate is low and rents are close to peak and likely to rise.
Ackman-Ziff's Adam Steinberg says that he sees strong demand for retail from lenders and investors. Ackman-Ziff recently closed a series of stable shopping center loans around the US, as well as a transitional loan for a mall in the Southwest. On the equity side, investors are most interested in grocery-anchored centers (they must want to take full advantage of raspberry season) and opportunities in primary and strong secondary markets.
Goulston & Storrs real estate partners Karen O’Malley and Andrew Zelermyer are with Harry R. Feldman CEO Michael Feldman (who just happens to be Karen's husband). Michael tells us his survey company’s business is up 15% over last year. He’s working on the Chestnut Hill Shopping Center and Chestnut Hill Square. Karen's also working on the leasing with WS Development for Chestnut Hill Shopping Center, with New England Development on Chestnut Hill Square, with Federal Realty on Assembly Row, and with WS Development and National Development on Market Street at Lynnfield. Andrew is involved in permitting, development, financing, leasing, and construction.
RW Sullivan’s Paul Sullivan (along with brother Mark) is taking the engineering company into the 21st century. That’s light years away from its humble beginnings in 1945, when granddad launched the firm. Now with 95 employees and in-demand engineering work all over the East Coast and beyond, specialties include healthcare (laboratories, biotech), colleges, and more. Current projects include Children’s Hospital's 100k SF mixed-use facility in the LMA, to be completed in 2013. The project it did for Yale New Haven Hospital's Smilow Cancer Center (497k SF) achieved LEED certification, which is rare for a hospital of its size. Northeastern University International Village (480k SF) is also LEED certified and includes a mixed-use space of residential, retail, office, and dining.