Anything can be found on the Internet today. If you want to buy a computer, you start your research online. If your child has to research Western European history, you go online. If you need to know which tenants are present along Orangewood Avenue, the answer is easily found online in a matter of seconds.
The commercial real estate industry is constantly evolving and new technologies are being presented every day to help make jobs easier. Internet tools and applications should be embraced as they enable real estate professionals to act quicker and more efficiently. However, regional expertise does not start and end online.
As the tools become ever more accessible, professionals get lured into a false sense of confidence about market knowledge. It is easy to pull endless pages of data and get an up close look at a property through live satellite imagery. However, while data might be easily accessible, first-hand knowledge of how a property fits into a community, what the optimal tenant mix is, and how that tenant mix aligns with an owner’s objectives can only be gained through true regional expertise.
In academic circles, regional expertise is often referred to as a unique understanding of the physical environment, social landscape, and local economy. Commercial real estate is no different.
UNCOVERING A DIAMOND
A diamond in the rough cannot be discovered on the Internet. Such was the case with Imperial Promenade in Anaheim, Calif. Well-positioned along Imperial Highway, the property was impacted adversely when Cal-Trans re-routed Imperial Highway over an adjacent railroad track. In the process, a wall was constructed, substantially blocking the center’s visibility. This 50,000-square-foot property sat 30-percent vacant primarily due to the perceived limitations of its environment.
It quickly became evident that national tenants were not going to consider the property with these challenges as it did not meet their well-defined criteria. However, being on the ground allowed Coreland Companies’ leasing team to discover that the area’s strong demographics and very active daytime population made it an attractive and viable option for local, regional tenants.
One-by-one, the team sought out the best in local flavor – a popular juice bar, the latest fitness trend, and a boutique clothing store. Even a new location for a popular Indian restaurant was signed after the team personally visited a variety of local eateries that expressed interest in the space. By working to thoroughly understand the social landscape, the team made this center relevant again. More importantly, deals were being done at $0.25 per square foot, per month higher than at the competing properties – all done without national tenants, and despite the apparent obstacles.
The Internet is also unable to re-envision a space. If you have a vacant 10,000-square-foot space, all the images and data found online will show you exactly that – a 10,000-square-foot space. However, a leasing team that frequently canvasses an area, talks to local businesses and closely monitors changing trends can look beyond the existing condition.
At 5970 Orangethorpe in Buena Park, Calif., the site of a vacant former 9,000-square-foot Marie Callender’s, Coreland’s leasing team discovered that the area did not need another sit-down restaurant. The surrounding area, including 1 million square feet of nearby office space, was actually grossly underserved by quick-service restaurants, and quick-service restaurants were rapidly growing in popularity.
By identifying this void, the team addressed a local economic demand that supported a repositioning strategy. With Coreland’s recommendation, ownership agreed to redevelop the site to accommodate multiple restaurant tenants. Rather than find one replacement, the team secured three, including coveted national brands such as Starbucks, Chipotle and Jersey Mike’s that executed leases and helped ignite interest in the center.
So, before you read your next downloaded demographic report, ask yourself, “does your leasing team have the necessary regional expertise?”