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good morning everybody thank you again for joining us we'll get we'll give it a restart here we appreciate all of you that are participating in our breakout session regarding reconfiguring retail and vacant sites my name is mark abood and i'm with colliers international thank you again for joining me and this exciting 30 minute presentation as i indicated before let's grab our pencils i'd like you to be prepared to take some some notes if you like and please please please ask questions i'll be turning my head from time to time to check out any any questions that are in the chat room i would encourage it and don't be shy if you don't know the three individuals and their teams that are with me today you better get to know them i'd like to welcome joe curry uh senior sorry first vice president at cbre aaron masara with blue mark capital and chris salada chief operating officer for industrial commercial properties thank you thank you thank you to the three of you for taking time today to participate in our panel discussion i would love everybody to speak freely i'm only here as a moderator so i want you all to join in and participate as much or as little as you like but the more you participate the less i have to talk so thank you again for joining us um i'm going to kick right into it with with chris i think some of the most relevant or one of the most relevant projects progressing today in northeast ohio regarding the repurposing of an asset is is city view center in garfield heights which is now known as highland park i've had an opportunity to see some of the materials that you've put together and your team has put together on this project as it has progressed but tell me a little bit about that project how did it come about where did you get the ideas and i know it has been a long long time building so take us back in time for a few minutes if you could chris sure good morning mark thanks so much for having me and and good morning to everyone that's joined us today uh highland park is a great story um as many of you know it was originally developed more than a decade ago on a former landfill at the uh the confluence of i-480 and transportation boulevard our company industrial commercial properties as you may know has been rather active in northeast ohio and we've been rather active in reactivating retail sites similar to highland park we are the group that was behind the redevelopment of north randall in north randall randall park mall we're working actively right now in in cities like garfield heights and akron and elyria on other retail conversions clearly industrial is the bell at the ball right now and uh especially in the wake of the pandemic we've seen such a boom in e-commerce and distribution and logistics there is such a high demand for that type of space and that type of light industrial use particularly here in northeast ohio and so actually the way highland park came about we had acquired the former kmart uh in garfield heights on rockside and we're working through a redevelopment plan on that asset and in conversations with mayor colova and his economic development team at the city of garfield heights they said hey would you guys ever have any interest in taking a look at city view and um we did and he put us in touch with the with the note holder at the time a local developer by the name of george simon and fast forward nine months later mark and we are now joint venture partners with mr simon we've commenced a complete redevelopment of the former retail power center and we are now converting it and rebranding it as highland park uh it will now house you know light industrial and commercial office uses we've been able to secure a giant eagle to stay at the site and get them to commit to a long-term commitment a lot of people don't even know giant eagle's still there they've been uh operating there with kind of a boat anchor around their neck uh from the beginning but uh they're they're doing tremendous numbers there despite uh the the surroundings that they've had to operate in so we think at the end of the day look location location location right as it relates to what we do for a living but in this instance the location you can't beat it it's a it's an a plus location for any type of use but the way that the power center sets up and this is this is a point to make i think about retail conversion in general large square footage footage footprints of the buildings great column spacing high ceilings existing loading that you can either supplement or utilize from day one all of those aspects of these types of former large big box retail assets lend themselves beautifully to light industrial redevelopment so we have we had to go through a little bit of a process there because it was held in a federal receiver ship but happy to announce that we did take fee title here within the last couple of weeks if you haven't been out there to see kind of what we've done on the exterior of the buildings it looks remarkably different than what you probably remember when walmart and joanne and others were out there operating and we've been able to actually put forth a marketing plan that mark alluded to that will allow us to combine some of these spaces depending on the demand in the market so we are very close to announcing our our first tenant there our first industrial tenant there uh they're going to be taking 50 000 square feet within the former walmart space and i should mention that parking because as we think about you know folks like amazon who continue to grow and are looking for these last mile facilities parking is a key feature to these assets you know no one really needs to operate it for four to five per thousand any longer on a retail basis but it sets up nicely uh to park some of those trailers and vans and transportation vehicles that are required to get the products to the neighborhoods so we're excited about that chris when did you give me uh give me a a timeline when what was your first exposure to that asset from a business standpoint we've all seen it we all know about it for decades of course anybody who's driven on the bridge or or grew up in the area of course is aware of city view and and you know what's now highland park but when did you professionally get into the mix with a discussion so this was just a little bit over a year ago so jay talked about speed to market um for us to go through the process with the ohio epa with the federal receivership with the city of garfield and to have it activated with our first tenant within a year that's that's warp speed given the uh the history of the site and prior to that no it wasn't on your radar now we you know everybody drives by it just about every day and uh i think we all we all question something's gonna happen there it's just a matter of time and you know right place right time uh we happen to be the ones to step into it that's great joe you you've had experience um ranging from development brokerage um what are what are you telling your clients about some of these reconfigured property opportunities particularly from the retail big box environment talk about some of these opportunities what makes you get involved how is how are how do you get into the picture and and where does your representation lie and what kind of advice do you have on these matters mute mute there you go thanks to uh team neo and uh and everybody for inviting me today and i thank thanks for being here um my involvement you know as a broker is is really to try to solve a problem usually um and you know the asset classes that you know we're talking about whether it's malls or freestanding big boxes um you know the the challenges can range from you know antiquated building where the ceiling is too low and needs to you need to figure out whether it's a scrape or you need to figure out how to go vertical um you know what we run into what we're running into now is you know on some of the non-freestanding locations now let's take a mall for instance you know malls typically were built with three sometimes even four uh anchors right and uh these days we we don't see a place for that you know you're not going to see going forward you know i don't have a crystal ball but i would venture to say that you're not going to see a four anchor quarter million square foot per store mall you know and across with you know infill retail around it you're not probably not going to see that anymore the challenges there are um you know restrictions uh exclusives with tenants operating agreements you know um and then you you know you get into the whole you know physical aspect of the building um there are just a lot of challenges and then you you try to figure out you know how do you unwind or navigate your way through the ccr's you know how do you uh you know how do you how do you get around the operating agreements in the property and then how do you figure out the zoning uh and what the next life of the property is going to be you know i think um yeah there's so many different case study examples that we can talk about but you know indoor entertainment facilities for the saving grace to a lot of big boxes then so um you know the entertainment aspect in movie theaters and cramming as many people into a building as you possibly can for an activity uh you know it isn't uh isn't the isn't what's happening in in 2020 2021 so uh tell me what kind of things what what kind of things are you particular what's the hottest item that you're working on so so there's a lot of the communities of course have the properties the whether it be the malls or the or the vacant big boxes give me an example of a project that's of course a public record that that you're that you're jumping in the mix with and what what particularly are you doing and and how are communities uh getting involved with you on these projects um well i mean we could go through you know as a broker obviously it's not as it's a more micro but higher frequency right like the nature of our bits right icp we're so lucky to have them in town they do these massive transformational projects we do smaller ones right but you try to do a lot of them um you know everything from um you know the r d uh land for sherman williams in brexville we listed that property and closed it last year um you know we took a medical mob and brunswick on 303 we recently sold that land to meijer they're building a new 160 000 square foot grocery store um everything down to expanding aladdin's bakery and moving them to richmond heights to you know expand their facility uh recently sold the uh audi dealership in willoughby on mentor avenue to jack prince you know land next door to topgolf or saucy brew works to build their new um uh brewery and uh restaurant um and you know municipalities have been you know uh for the ride on most of those um most of those projects so and those those are some critical projects that are to me you've dotted a lot of communities those projects don't get anywhere off the ground you know without without aaron so aaron i'm going to bring you into the mix a little bit you know a lot of these repurposed properties do lenders look at these changes more favorably less favorably you know what what magically happens uh to get a capital stack in place um from your perspective and and what do the cities want to see from that perspective as well what gets you into the mix and tell me about something you have going on i know i know you have some some projects as well sure um it's a great question and first and foremost like joe and chris i want to thank team neo because this is really exciting i think a really important dialogue that we all want to be involved in and are fortunate to be involved in um high level on down so blue mark capital for those unfamiliar we represent 20 to two dozen or so life insurance companies exclusively semi-exclusively and for those thinking life insurance companies they're really debt providers who like to think long term and like to go long term so your standard bank deal that might be five years perhaps 10 years our life insurance companies like to match their debt with their actuaries due like to match their debt with longer term debt options or excuse me longer term life insurance policy options that may go 20 to even 30 35 years so that long term debt is really where we play in addition to those life insurance companies we represent quite a few other capital sources that like to be involved up and down the capital stack so where do we get involved how do we get involved is really i think bifurcated into two different buckets i think developer experience is absolutely key and that goes of course for a city as well as it does for our lenders um take in the first bucket an extremely experienced developer with whom we've been fortunate enough to work and that would be chris you know an icp i think for an extremely experienced developer particularly when operating in and around cleveland they have by and large access to acquire the asset you know take a vacant asset take a piece of land whether it's highland park or another one they have either the capital at hand or they have the relationships to come in acquire that vacant asset apply their secret sauce if you will whether that's you know land entitlements lease up renovations and then ultimately we'll step in to provide that longer term debt which i think mark to your question really adds to what a city is looking to do which is expand that assets longevity over the 20 to 30 year potential life expectancy of the economic benefits that one could see from that type of project so again to put you know five years of financing with a local bank on might be a little bit shorter focused than what we can provide in terms of you know maybe a 30-year fixed rate low rate financing on that type of asset on the flip side i think that when developer experience might be when we might have a developer that's not quite as experienced as icp or a developer that is just not in the cleveland market we can step in with capital sources who can provide that initial acquisition financing for a vacant project for land you know very creative sorts of capital and then ultimately on the tail end of that expand that over again a 20 30 15 year period to really again fix in those economic benefits the latter bucket has become a little bit more prevalent these days as i think lenders whether it's a life company or a traditional lender doesn't necessarily want to play as aggressively in the permanent debt space at two and a half percent two and three-quarter percent interest rates they want a little bit more creative types of capital that's great aaron i'm going to jump into questions a couple have popped up um chris how did garfield heights handle the rezoning of highland park did it have to go to the electorate did it was a referendum are your tenants going to operate on conditional use permits i think that's a pretty straightforward question that one's pretty easy when we got there it was already zoned mixed use so our our uses were already permitted but every every municipality is different of course you know more sure another quick question a local small town mall is trying to organize reorganize its business beyond just retail what industries are finding good homes right now in those kind of locations light manufacturing medical offices indoor entertainment you know chris and joe you could that's a pretty pretty uh straightforward one as well what are you seeing yeah joe i'm sure you're seeing uh like us all of those uses are are readily adaptable to a former interior mall location you know our head of development came from a group called cerritage development which actually had taken a large portion of sears portfolio and redeveloping those across the country and the uses they they were you know putting in place their mark ranged from everything from industrial to multi-family to office so it all comes down to the attributes of the asset the physical plant as well as that location yeah to expand on uh chris's point um sa heritage is a client of us and we are in real time working with them representing them on the sears box at great lakes uh mall and mentor and uh i'd like to you know highlight that where uh mentor took a proactive a proach towards um zoning charter and being able to uh in on an administrative basis modify zoning based on a case-by-case basis without referendum vote so we are hopefully uh moving towards a multi-family redevelopment of that 20 or so acre site so that that's a great question and a great example of a municipality you know really being proactive and flexible and having open arms to new development um things it's it's an excellent point mark too for all of the you know the municipal leaders that are on this call today you know if you have these types of assets within your communities and can be proactive um on that zoning front recognizing and sometimes it's very tough given the history of these sites but recognizing maybe that it's no longer a retail asset um taking those steps and and and working with folks like like joe or myself and mark and your team at collier's about how how how and what type of zoning should be in place what are the demands what what is the market driving for that location you know we've seen that we're going through that right now with mayor whitfield at the city of the city of illyria and uh his economic development team led by don calvert they're they're right now out in front of the redevelopment of midway mall thinking through a zoning overlay there that would permit some of these uses to come in immediately because we've heard all morning speed to market is so key and when that rfp comes out you know for that for that big logistics provider you've got to have an asset that you can act on quickly so very similar situation played out in bainbridge township recently went with our development of the giaga lake district there uh jeff markley and christine o'brien and and uh the rest of the uh uh laurie laurie benza the the trustees of bainbridge were very forward-thinking and visionary and how they could work through their existing zoning to bring that project to life they were those leaders were a key reason why those projects are going on chris makes a really good point i think for anybody you know in a city council mayoral seat that's sitting here listening to this you know we as clevelanders and being in the real estate business might have a really good idea what type of asset might go in a particular location and our lending sources who are very aggressive and particularly multi-family and industrial really might want those two assets and oftentimes they fit but nobody really knows a city like those sitting you know probably again out there in the audience now listening to this they also know what it takes to get done what it takes to get these projects done and from that it's you know it's important to have that dialogue backing and forth so you know i i've worked in the law departments of of three different cities over the years i'm a former councilman in my community um i've worked a lot with economic development groups and and with planning commissions so so you know the fumbling around that often happens um is something to jay's point earlier about having the ability to be nimble and as a community you know what what are you what are you looking for from the communities and and and and also what what are you walking away from what what what is the biggest stumbling block is it referendum is it uh you know age-old history of a community where their things aren't maybe moving as nimble as as jay recommended in his presentation um and and do you revisit your nose if you if you cast aside you know even though a a community is coming to you uh chris and joe and and and they're looking for the funding sources aaron when they come to you begging you know take a look at this take a look at that and you and you pass because there's other communities that you're involved in other than northern ohio we all know that but what gets you back into play if you do get back in so i'll i'll take the first shot of that guys i think i think one of the things that is first of all it's got to be about the product right so the location is important what what is the market driving there but if you have a cooperative electorate if you have a cooperative set of leaders within a particular community that have have some of that vision for what that site can be those are the those are the communities that we want to work in um and we're and we're doing that all over northeast ohio now a good example of kind of a a project that was a no and is now back online is uh our recent acquisition of the former gm plant in ontario uh just uh just outside of mansfield there um you know we took a look at that five years ago and uh actually they told us no and they went with an out-of-town developer from miami um that developer came in tore down the plant sold the scrap and never developed an ounce of square footage there and so we revisited that when that relationship fell apart and within the last year we've now put that 270 acre site under control that's a that's an incredible site that's you know obviously got a ton of infrastructure power rail everything you need there for industrial redevelopment but it was sitting there but that was an instance mark where mayor randy hutchinson and his team they went and acquired the site so they went and bought the site and the city owned the site when we got there and now they've entered into a long-term option agreement with us so that we can work with a group like team neo and jobs ohio to find ways to bring incentives uh to activate new industrial development there which is another key that i think was touched down earlier not only the zoning having the foresight and the zoning but also to have that incentive package put together um retail rents as joe will tell you are significantly higher than industrial rents and the cost of construction especially ground up right now is extremely high so in order to bridge that financial gap you know i i'd encourage all of the municipal leaders today to start start to think through an incentive package that could help drive some of that development i see we you know we have a couple more minutes because i know uh we started a couple minutes late so i'm going to keep going until someone tells us we want to we want to hold back or return to the to the to the main main room um quickly give me an example of a community outside of ohio that you might consider to be a trendsetter or or a model for development progress i know jay had an opinion from his experience but um i'm particularly punching this out to chris because i think you do do projects you know well beyond our borders and i know joe you're aware of projects that that are well beyond our borders give me an example that our leadership can look to to say hey i need to learn more about what they're doing to be a progressive nimble et cetera maybe a quick answer yeah big example for me is detroit michigan it is uh it we believe it's it's the industrial capital of the world right now um people think of detroit being you know much smaller than chicago but it's really just more of a horizontal chicago and right now you know the demand for industrial space there is through the roof and what the the various communities are doing there is twofold mark they're they're putting you know things like a gpud in place that permits this mixed use including manufacturing and industrial uses but they're also working not just with in their individual communities but they're partnering let's say with the detroit regional partnership they're partnering with the state of michigan to put an incentive package that it's actually a uniform incentive package that now rises from the community to this to the county to the state um and it's almost like an a la carte menu depending on the type of use and the number of jobs you're bringing to the community that you can tap into as a developer joe do you have a do you have a an opinion on us on a location that you're seeing in the in the country outside of ohio right now that's really that that's a good model do you have any thoughts on that you know i i know most of your stuff focuses on ohio yeah not not really i mean i i think you know just because we do some some business in in pittsburgh um you know pittsburgh has done a really good job of you know all of a sudden there's facebook and google and you know and and i make a great point i mean that's a that's a nearby neighbor that's doing a lot of big projects yeah we should you know we should be you know and i think we'll i think we're gonna get there in part because we've got guys like chris and nicp we're fortunate to have those guys drive uh these uh these initiatives on those redevelopments but yeah i would i would say i would say pittsburgh pittsburgh's got a lot of really surprising things happening uh and they have been happening sure i i do think mark it's worth noting um the the incentive packages and and the and the types of programs that team neo and jobs ohio have provided to us as developers here in the state of ohio are they're first class and so whether it be the osip program that you heard bill kaler talk about earlier whether it be the vibrant communities grants there are a multitude of programs that team neo can offer and can help some of uh you know our local municipalities think through and how they bring those dollars into their community so i would encourage everybody to you know reach out connect with that team because uh there's a lot to tap into i love it i just got the approval to go to eleven i know you all saw that some of that message um so i'm gonna keep going until they they shut us down and i hope that's okay and thank you for the questions that are popping up we're getting quite a few and and i'm trying to get to some of them in in a summary in the best way i know how um for all of the the the community leaders out there you know what what gets what gets your attention right now what what it what can they what can community leaders do um i'm sure everybody's throwing projects at you and ideas and creativity at all of you all three of you what what can a community leader what can they do collectively they really capture the attention of others of you outside of the others that also might be trying to win your win your love and and attention and and development and um and and capital capital expenditure tell me what you what your what the number one thing is you're looking at i think chris can really dig in hard there but i will say that we as well as our lenders look for cooperation i mean that is that is one of the biggest things and you know to going back to nose turned yeses and yes's turn knows one of our more recent projects is uh richmond town square in the richmond town mall and seeing as that project has developed it's it's truly taken a village and i think everybody whether they're on the city side or on the developer side or on our side would say that you know it's taking a village it's taking collaboration it truly is a conversation and i think similar to a lot of other instances really in life i mean you come in you do your job and everybody comes together towards that same goal um there are of course incentives um you know for example we've worked a lot with the sponsor for today bricker eckler on that very project and seeing how there are many creative ways to get a project done and just being open to those ideas i think remaining open and we're not not remaining too steadfast and what an asset used to be is particularly poignant as we look to repurpose some of these assets that need new life today yeah i think market go ahead joe let me i'll just jump in really quick i was excited to be invited to this because of the topic of conversation because i just happen to be involved in a lot of these these situations as a retail broker um i've sort of morphed into you know redevelopment of big box to multi-family and it's you know it's become um an area of interest for a lot of developers so i would say chapter six of mark of i'm sorry mr jay gardner's book um say yes um i i can't i can't stress enough that you know the opportunity to talk to um the folks on this on this call was um you know i wanted to just say you know there's i think at this point around 8 000 mortgage loan defaults on hotels in the country some of these hotels are are nearby office space thereby interchanges they're big gateways to communities focal points of community when you get off the highway exit um obviously we know big box we know big box stores we know the the evolution of what those sites uh are going to be they're not going to be retail so i would just say please work with us uh have open arms uh when when it and if a tenant wants to go into your community the developer wants to come in to your community you know you know plea please be try to be flexible and be cooperative within the administration as much as you can as long as the use is appropriate and there's a um and there and there's a good case behind it so so quick question here is there a project uh too small for your consideration for instance uh elementary or educational on the commercial main street as far as i'm concerned um one thing i tell i tell everybody is and and for those of the those community leaders that are on the call that we've worked with you know we'll get we'll give you a quick no if it's not something that that fits uh i don't i hate long maybes everybody's time is is way too valuable but if it's a no it's also going to come with some thoughts on how we you might redevelop it or or perhaps introduce you to some other you know peers of ours in the industry that that may do that type of project so um happy to talk on any project in any community whether it's a right fit for us we'll be able to tell you that real quick but i think just uh just to add on to to joe and aaron's comment about uh to your original question mark you know i think communities can't be afraid to activate a portion of a site first you know i think everybody wants to see this grand master plan everything's tied up in a bow and we know exactly what's going to happen um you know my career working on projects like the flat east bank and pinecrest i get that that's a that's a master plan community everything's got to fit but when you're talking about reconstructing a site like richmond town square or randall park mall or midway mall or chapel hill mall you can't be afraid as a community to activate maybe just the sears former sears box first um that's exactly what uh mayor horrigan in akron is doing that's the type of thing that mayor whitfield and o'leary is is looking at and it's what mayor david smith did in randall what most people don't know is that that consolidation of the property there at randall that took three to four years to put all those anchors together and when everything was was done the first project that kicked off there actually was the redevelopment of the sears not the amazon fulfillment center and the reason that was critically important is because uh you know a lot of our colleagues will hear me say a lot activity breeds activity and that's first that first project does a couple of things it changes the narrative for the location and it tells the market that this is no longer a retail site and there is a government here that is open and flexible to new uses um and that i think honestly and kudos to mayor smith there in north randall that drove amazon's interest um some of these things it's like you know i believe it when i see it that's that's unfortunately that's kind of a that's a that's a mindset that we have in cleveland you know the browns are going super awful i'll believe it when i see it you got to believe people there's there's and there's so there's components of these projects like the sears um and and some of these anchors at these malls if you're able to activate that first anchor that can do wonders for the rest of the development so i would i would encourage the municipalities to be open to that process even though it's a little uncomfortable because you don't see the full picture that can sometimes be the catalyst to blow the site wide open chris makes a really good point and i'll take 30 seconds i know we have to cut into time and i truly apologize that um i know that the groups are now rejoining um the main the main um room so and i'm so sorry aaron i i loved this conversation i could sit here and talk to you and listen to you all day all three of you i know our audience had some good questions many of you can see those questions on the chat so um i think we got to most of them there's one or two that i did not was not able to get in because i i loved listening to all three of you um so please if you have the uh the author is on there so feel free to communicate directly with them if you'd like to answer those questions i promise we'll get all of them answered thank you to the three of you um truly an honor to moderate and be a part of this conversation um and and great work to team neo and having these breakout sessions as well as the main sessions um stay tuned right now for some final thoughts from team neo's uh ceo bill kohler thank you again we really appreciate everybody's questions and and uh and participation today