I just returned from the National Restaurant Association Financial Officers and Tax Executives Conference in Las Vegas. I participated on a Real Estate Leasing Trends panel with Adam Schwegman, head of the eat/drink department of General Growth Properties and George Galloway of Next Realty Mid-Atlantic, with Ryan Cupersmith of Ernst & Young as our moderator. While there, I was able to soak in some knowledge myself. Here are some of the highlights of what I learned:
- Restaurants may be the new anchor in retail developments. A center has to provide an “experience” to motivate consumers to shop at the center as opposed to sitting home and buying over the internet. Restaurants have become a great way to create an experience and draw customers in.
- Restaurants are immune to internet competition. Last time I checked, you can’t buy a prepared meal over the internet that comes with a server and clean-up crew, so restaurants appear to be safe from internet competition, at least for now.
- GGP has a separate eat/drink department dedicated to restaurants. As head of that department, you would have to spend a lot of time trying new restaurants, right? Now that sounds like an ideal job.
- The mobile food app is the new critical feature for the fast casual sector.
- While most people agree that there is simply too much retail space, it may be more accurate to say there is too much antiquated retail space.
- The new accounting guidelines regarding capitalized vs. operating leases will not have any impact on most retail tenants.
- There’s a lot of great restaurants in Las Vegas. To confirm this, I ate at the Hot & Juicy Crawfish The hot & juicy sauce on my shrimp dish was unbelievably good and addictive. Additionally I had tremendous sushi at the Aria.
- Many tenants are paying too much for their legal representation on leases. Several people in the audience seemed to like the fixed-fee arrangements we provide, and the other tips I shared on how tenants can reduce their legal spend on leases were well-received.
If you would like to know more, give me a call and we can grab lunch. I know this great shopping center that has a wonderful restaurant right in the center of the action.