Commercial real estate crm software for Retail Trade

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the view shared on this podcast are those of Mike sours and do not represent those of commercial investors group the information shared is not investment advice please consult your financial legal and tax advisers before making an investment decision today I'm excited to bring on the show mark Robinson he is the retail guru here in the Twin Cities we're gonna talk about how to segment out the different retail areas his formula for evaluating whether a site is good or bad and then we're gonna get into specifics about tenants cap rates rents lease terms and things like that and I'm excited if you're considering getting into the retail commercial real estate investing game this is not an episode you're gonna want to miss thanks for tuning in for this presentation there are two kinds of people in the world those that worried sharing their ideas will hinder their success and those who are driven by the success of others the first kind view everyone as a competitor they guard their playbook tight to their chests rarely collaborate outside their inner circle and are reluctant to show their cards then there are the second kind the kind who have graduated from the first category they don't count the number of deals they've done what counts to them is the number of people they impact than the depth to which they impact them achievement is still important to them but it's subordinated to the depth of their purpose so they give freely of their time knowledge and expertise to build a bridge for those who follow in their footsteps these are the people who are called to change the world these are the people who develop people places and ideas this is the show where they do it on the creative commercial real estate podcast great well joining me today is mr. mark Robinson he is a colleague and Mark is one of the Twin Cities leading retail guys he's also a deal maker and we have a mutual friend Rafik Moore and I'm just excited to have you on the show today we're gonna have some fun mark love it looking forward to it so did you bring your radio voice you tell me I didn't practice in the mirror this morning so I apologize ah well you look sharp and I'm excited to jump into some retail discussions here so tell us who you are and what your company is and what you specialize it sure so again Mark Robinson I'm at the Mid America real estate in Minnesota so we are a full-service third-party management leasing and investment sales group that strictly focuses on retail shopping centers single tenant anything having to do with the the retail real estate world so our office handles all of Minnesota western Wisconsin and some in North and South Dakota so we've got four offices at mid-america so we had our original office in Chicago and they've been there about 40 years then we've got offices in Detroit Milwaukee and Minneapolis or Minneapolis office has been open just about 10 years now so basically what what we do is like I said it's all third parties so we don't own anything if you own a shopping center we will manage it we will lease it will do all the accounting we'll do the construction management what I do is investment sales so well we'll buy or sell and and then we've got our tenant rep department as well and our tenant rep department represents 70 national and regional retailers so they're representing anybody like TJ Maxx Dollar Tree Starbucks Walmart etc etc etc so a pretty good group we've got maybe about a dozen brokers on our brokerage side and our brokers split the disciplines typically so they've got the tenant rep team so we've got a group that just represents tenants all across Minnesota and western Wisconsin and North and South Dakota and then we've got the landlord rep team that just represents landlords finding tenants for the shopping centers etc and then what I do is the investment sales so I am representing owners of shopping centers as we go to market and in sell the shopping centers occasionally I'll do buy a representation representing an investor to buy a shopping center and that's it cool so let's uh let's jump into retail so what what do we need to know about retail what's happening out there in the market right now how are you seeing the market change with kind of the Amazon effect so that's a hot topic in recent years basically any any retail program you hear any conversation basically revolves around what's going on what's going on with the Amazon and how are things changing and you know my day-to-day on the investment side is where do I put my money that Amazon is not gonna figure out how to take it from one of my tenants and so it's been kind of funny because when I got into the investment side of things you know it was the hot sexy properties were the jr. box big large power centers drew a lot of traffic and you know all the investors wanted to own those Wall Street wanted to own those so you know you had the Bed Bath and Beyond and the Michaels and the Ulta and the you know list goes on and in the appetite for that it's really changed quite a bit and it goes down to what's going on with retail and so the internet and Amazon everybody else seems to be playing and that's an buy - trying to transact online in some form or fashion whether that's omni-channel retailing which is a term that basically states how how a retailer is going to market to you and sell to you on multiple channels so Walmart Target great examples hey we've got stores you can come in there we've got a great website we can we can deliver it to you we can have it ready for pickup you can return it in our stores all of this stuff how we're how we're touching and servicing you that amazon can't do yet that's going to change as Amazon gains traction and continues to roll out more stores but I guess I'm going down a little bit of a rabbit hole here as far as you know what's going on in in retail and what's going on in the Amazon so I think the the gist of it is that you know most everybody that wants to buy right now is is looking at more service oriented retail comparative to the the jr. box power centers that were in flavor a few years ago and you know a while well the smart money you might have seen the writing on the wall that hey things are changing and your money's at risk let's say majority the masses really didn't see that there was going to be this this huge shift and so as an example we might have sold a power center to somebody two three four years ago at a six or seven cap deal and and that's where we've seen the biggest shift in cap rates and pricing because now those same power centers are anywhere from seven and a half eight - you know nines and tens so pretty dramatic shift I mean when you put it on on an Noi that might be millions of dollars that's that's multi millions of dollars in value kind of wiped away sure on a lot of these shopping centers so let me let me jump in there real quick not to cut you off but for our novice listeners who don't understand cap rates and value so cap rate is simply how we translate net income into evaluation on the property right you got and sold the higher the kappa rate the lower the same net income would sell for right so it's an inverse relationship the higher the cap rate the the lower the value and the lower the cap rate the higher yeah so for the same income stream two years ago it would the property would sell for quite a bit more than than it would now so people are devaluing these properties and expecting higher returns it's based on risk right it's right now that's the risk premium and whether that's right or wrong you know will remain to be seen right sure I think there is there is some good value in some of these well positioned power centers because they sit on acres and acres of land that hey maybe that's maybe that's a mixed-use project or you know some other sort of use that you can buy it at a reasonable price today gain some income and and redevelop it when the time's right if the fundamentals of real estate are good sure can we take a quick step back since you're probably the guy I would call for any of my retail deals that kind of view you as the retail guy here in the Twin Cities can you help our listeners can segment out retail kind of into its sub segment so you're throwing around the term power center I don't think everybody understands that can can you just give us a quick step back on what are kind of the key sub asset class categories for retail and you know sure so you know I should know this is actually categorized by icse the International Council for shopping centers which is a trade organization and in icse has different classifications for what you know justifies each category of shopping center so I'm not going to name all of those because I can't remember them but basically you've got different food groups so you've got a junior box or power center like I've been talking about that would include boxes from retailers in spaces maybe 15 to 40,000 or 50,000 square feet so might be a Hobby Lobby Bed Bath Old Navy what-have-you so that's that's the power center category you've got a regional mall which is an enclosed mall like we've seen Ridgedale mall Southdale mall isn't large and closed malls with large anchors that's a whole other discussion and then you've got your kind of bread-and-butter neighborhood grocery anchored Center and so that's gonna be anchored by a grocery store likely here in the Twin Cities it's its Cub Foods IV London Byerly's etc and so that's that's still in demand today and after the neighborhood grocery Center you've got basically unanchored neighborhood retail and that is probably the highest velocity in in trades and just you know volume number of trades because there's just more of that unanchored neighborhood retail strip and that's basically what we focus on I'd say 60 or 70 percent of our transactions are in that category and when we say on anchored is that without a national tenant or can you define on anchored so anchored would say that it's got a traffic driver there so might be anchored by a grocery store might be part of the project and so of course your store might be there it could be a movie theater it could be a home-improvement store could be a large box large retail use or something that's drawing traffic into the center that all of your small shop retail spaces are going to feed off of that traffic and visibility to that traffic so yeah that's so let's say like Rockford and 494 in the northwest corner there there's that little strip mall with Quiznos in it would you consider that and unanchored even though has like a great clips in it yeah so it doesn't necessarily have to do with the the credit or the you know the tenant being national or regional really has to do with the size of the of the box or size of the the anchor of the shopping center that's drawing traffic so that can be really good well positioned you know all national tenants at an intersection but it's if it's not anchored if there's not a grocery store right next to it or as part of the project it want to be considered so typically anchors would be a grocery store do you see a lot of pharma anchored strip malls like pharmacy anchors like Walgreens which anchors yeah you see some of that I'd say it's typically it's not typical I guess because typically those those Walgreens CVS are single freestanding deals and then maybe there is a shopping center next to it as an example and they those would be quasi anchored but the really neat more neighborhood in nature so you know anchor for our purposes that we talk about is you know a larger grocery or box Home Depot Menards Lowe's movie theater some other large draw traffic drawn got to the center and when you're valuing these for a listing presentation are you guys segmenting out based on the the size or the credit of the tenant and applying different cap rates there's all streams of income you know that's a fair question I would say that we do sometimes does the investor probably not yeah well that's that's one of the ways that we'll value as we talk to an owner of a shopping center was just doing that on a deal we're looking at right now where there is a a large credit tenant with seven or eight years of lease term left and very you know Double A rated credit and then it's got a couple of tenants that are probably B or C credit tenants and so in this case we say well they've got shorter leased but we've got long lease term with this group so I might sell a free-standing national tenets like this with this much term at a six or six and a quarter cap rate so I'll apply a six and a quarter cap rate to that income and then maybe an eight or eight and a quarter cap rate to the other tenants there and then blend that cap rate to come up with something I think that makes sense on the surface whether that transitions in and transforms into how the market perceives that is a whole nother ball of wax and so it's defensible on one end but on the flip side I'd say most investors are looking at it as well let's compare this to another shopping center that that is sold with similar tenets or similar real estate fundamentals sure so retail is kind of its own little its own little dog when it comes to valuations because industrial it's like lease rates are you know 450 475 anywhere in the metro kind of net right that rates right but retail is like you can have one corner and four different complete markets on the corners talk to me about how do you evaluate a particular site in retail and since it's so volatile to traffic patterns and things like that like what kind of strategy are using to kind of figure out the marketability of some of these so get asked that question all the time but I've got a lot of clients that are industrial office retail multi-family kind of anything where there's a deal and they'll call me and say well you know hey look at this deal does this make any sense and usually I'll tell them no because retail is so fickle and while to your point there might be four four properties at a particular lid intersection all four of those have different qualities that make them good or bad from a retail perspective and so the what we use is really an acronym or what I use I guess is an acronym called pasta V so it's basically all the fundamentals of retail I took it from some book L I'll get to you and give credit to but so now pasta V so it's an acronym for what makes a good retail center so P that's for parking as the parking convenient is it easy to get to is there enough of it for the uses their access so how easy is it to get in and out so access in Minnesota is often a challenge compared to some other states where they've got less traffic laws so so something that we often get challenged on here in Minnesota but how easy is it to get access from an intersection from the morning side from the PM side and then ask for signage so what kind of signage do we have is it is it tall and big signage on the building is it do we have pylon signage monument signage directional signage how good is the signage here T's for traffic so that's that's a big fundamental how much traffic is at the intersection and on the roads so you can get that's all public information that MnDOT shares and there's a few different resources that will that all catalog that and show you any intersect or any road when when was taken and how much traffic is on that road so I would say at a bare minimum I like to see 15 to 20 thousand vehicles per day VPD and and you know great sites are closer to 50 thousand or more and then a the last day is for anchor so we kind of talked about this but what is the draw into the shopping center is there an anchors that are a grocery store that has as daily trips there is there a drug store is there a movie theater is there a hardware store why are people going in in passes property and then V lastly is for visibility so also something that we sometimes get challenged on in Minnesota with the amount of trees and hills and buildings and whatnot and so V how how can i how good can I see this property if I'm driving by at fifty miles an hour do I not see it do I miss it am i stuck at the intersection and I have to stare at it how easy is it to see the you know the storefront for free no that's super helpful so that's how you determine good versus bad so if you're evaluating for sights on the corner those are kind of the metrics you're looking at right and like I said why I like retail really is because unlike an industrial or maybe office building where all four might be created equal basically for retail properties are going to be all different because one or two of them might be anchored one of them has access challenges one of visibility challenges that's that's kind of a fun part of retail um I'll come back to the cap rate spreads so that I can make you over commit to something perfect but help me understand the mind of a retailer so you guys all you're not on the tenant rep side but I'm sure you're privy to it so regional tenants and things like that what they have very specific metrics on what they're looking for traffic counts things like that talk to me about the am/pm side you had mentioned that in your last thing right so so as I mentioned we do Starbucks work or my partners to Starbucks work and so that's an interesting dilemma for a coffee user versus maybe food lunch dinner users so the coffee user really will only be on the morning traffic side so typically not in all trade areas sometimes they've you know traffic can go both ways and it's not a big issue but I'd say a majority of the time your traffic is funneling down the street towards maybe an interstate or highway system and you want to be on the morning side so where all the house households are going down towards the interstate you want to be on the morning side of that if you're a caribou or Starbucks or some other coffee user and then on the you determine that that usually towards the central biz that's district yeah I'd say for the majority of it tort towards employment right so yet towards towards the the business district or towards a major employer or employers or Business Park or something like that where people are going on a daily basis or at least Monday through Friday maybe it's on the way to the mall maybe it's on the way to school whatever is there a resource you guys use to figure that out can you look at traffic counts in the a.m. versus the p.m. that's a good question I don't know that you can or can't sometimes I think on some roads it'll show you where where it was taken now hypothetically the traffic is you know hopefully they're going to you know to work and then back to home so it should be about equal either way but you know I guess honestly comes down to getting out on the site and and seeing that sometimes if you don't know it already a lot of our tenth reps if they're not going when they're sending somebody and they go to the site at 7:00 or 8:00 in the morning go to the site at noon and go to the site at five count cars see where the traffic's going and what the traffic pattern is I'm just thinking like all right so 169 in the morning obviously southbounds your a.m. right right northbound kind of your p.m. up to 394 and then it reverts on the south end of town probably right but it gets a little hairier let's say like Rockford from 169 to 494 which sides a.m. which side to p.m. you know yeah you can debate it for sure interesting salt so we have your pasta V formula that's for evaluating a site so you said like 50 to 15 to 20 thousand vehicles per day is kind of the minimum for most of your stuff that you'd like to see typically yeah 50 thousands pretty sweet pretty sweet okay any of the other metrics like let's talk about parking ratios what are you looking for there so depends on the use or the users they're typically more is better and I think as things evolve as driverless cars or mass transit or bikes take shape you need less parking in reality but I'd say a majority of the retailers like to see a ratio depending on the use for per 1000 or five stalls per 1000 square feet if you're a restaurant it might be 10 11 12 stalls per thousand square feet if you're a large sit-down restaurant you might have a formula in fact often the municipalities or cities have a formula that says for every X amount of seats might be 4 8 or 2 X amount of seats you need a parking stall what would you say for office users you know office I would say typically it depends on what type of office and my experience I've seen four or five pretty similar 45 per 1000 ma'am okay talk about traffic signals and how that provides challenges for access so typically you want to be if your retailer you're investing in retail property you want to be at a lit intersection reason being let's give it its making me stop and look around and be able to get into the property easier cuz traffic slowing versus if I'm driving 50 60 miles an hour by the by the property it's a lot harder to get in and get out of the property sure so when you say let you mean like traffic light yes yeah as opposed to like this stop sign right you know the ones with the white border optional yeah I've heard that too telex everybody [Music] we've been talking to Mark Robinson about retail commercial real estate and we'll be right back after this message today's shell sponsor is national property inspections Steve cuentas my guy he does all my commercial inspections in all asset classes industrial retail office and multi-family Steve's the best of the best here in the Twin Cities what I love most about him is he goes the extra mile to give me an itemized one-page list of all the major renovations to be done and the cost associated with them he even gives me a list of all the mechanicals with serial numbers model numbers and expected remaining useful life so that I can plan out my annual budget for capital expenditures if you want a free quote from national property inspections to inspect your next investment call or text him directly at six one two two four two four five six eight I guarantee that you're going to be happy with the results I'm Mike's hours your host of today's show and we will return with Mark Robinson on retail real estate [Music] nice alright so signage what kinds of issues have you ever had to be involved with you know going to the cities and applying for signage on behalf of your tents and things like that can what's that process look like so signage is very very very important to tenants right you don't know they're there unless there's a sign that says they are so you know certain tenants have certain different signage requirements but I'd say anybody any retailer any property owner you want to maximize the signage there so storefront signage I'm talking big individual lit letters lets everybody know they're there some some tenants large tenants might have you know a 48 inch minimum height or a certain amount of square feet that that they want to have that that allows the sign it should be visible then on top of the storefront signage they're also going to want any and all pylon signage that might be more visible to the intersection or the highway or anything like that so yeah they want they want as big or as much signage as possible in the city typically once as little signage because it clutters your community and and so that's often a battle as you're doing any new development or putting a new tenant in that that might not have been there previously and you've got to change some things so typically signage is covered somewhere in a city zoning code that says you know you're allotted in this zoning or based on this many square footage you're allowed this many square feet of signage on the building in this many square foot of signage on a pylon or monument sign now you do some investing personally you got it okay and so I'm curious as a retail expert how do you look at opportunities and kind of say alright this is a deal or this isn't a deal how do you evaluate if there's an opportunity to increase Noi on a project because you're looking at doing like value add type stuff yeah totally yeah so how do you how do you quickly look at retail deal and uncover if there's opportunity there so yet typically what what I'm looking for is is there you know if there's some vacancy there to add some value what does the vacancy look like is it is at least able space is it you know does it does it cover the pasta V is it doesn't that parking challenges is the space you know hard to see why why is it you know why is it not least and if it's a functional problem where you know you get to some properties and the parking lots full but it's only sixty or seventy percent full of the building well you at least those last spaces it's gonna be impossible to park and that's gonna be a challenge leasing any space for retailers so you know what we're looking for is yeah value add that that you can easily lease the space maybe there's a problem with the existing ownership maybe they have different expectations how does the existing rent compare to the market and that's something you're only going to know talking to brokers and looking at other properties and and so you know there might be a property you look at that the market for rents is twenty five or thirty dollars a square foot and and you know the market or the the rents in this property are really fifteen sixteen seventeen dollars okay well as the leases roll I know I'll be able to increase value by adjusting rents or releasing the spaces to higher paying tenants let's talk about retail leases are those how are you typically seeing those for a multi-tenant strip mall type of scenario are those typically like a triple net yeah triple net leases so you know I think that's fairly unique to to retail you know I know office leases and industrial uses can be triple net but not all not as common as retail sure and so it's it's the standard it's the norm on pretty much any decent retail strip you know you know some smaller properties or now as well-managed properties might be on Carosa leases but I'd say for the most part everything we deal with is on a triple net lease what's typical for duration and renewals on a regional strip so most tenants depending on the amount of tenant improvements that the amount of investment the landlord might invest are gonna be a five-year lease with one one or two five-year options you try to do try to get them to a ten-year lease if you're really investing money so I'd say any new construction project is it pretty much requires between the investor and their lender typically requires at least a 10-year lease to to get some value out of it sure longer the better in most cases but not ours mm-hmm right um and if you're representing the landlord and you're filling a vacancy are you helping underwrite the credit of the tenant how do you figure that out is that a moody's check or who actually determines the credit of the tenant number of different ways you can go about it kind of depends on you know is it a national credit tenant okay well then you can go to Moody's or you can go to a number of different areas online you know it just takes a quick google of you know hate show me best buys credit rating or you know if it's a public company pretty easy to figure out what what Wall Street's saying about them if it is you know a regional group gosh you know maybe you go to you can go to the Better Business Bureau and look up some things you can there's a few other resources that you can kind of look up and it'll give you a guesstimate based on what they've found online for their credit rating I'd say you know majority of our deals where its franchised based or mom-and-pop credit are going to be a simple financial statement that says hey show me your balance sheet show me how much you've got for assets liabilities what do you got for income maybe you've got other locations that are doing X amount and sales volume and thrown off enough cash I'd say you know the more locations they have typically the better got more security and more cash flow if if they do this store and it doesn't take off as quick as they thought it's not going to sink them so you want to make sure that they've got enough operating capital do you guys under write all that yourself typically or you you have your clients do it or do you guys sometimes go to like your lender and say hey you know look at the global cash flow for this person so typically will ya our leasing agents will assist in that process we've got a form that that you fill out and we can run credit we can run different reports depending on the tenant and will assist with the landlord ultimately you know it's our agents job to bring the landlord all the all the information and the landlord then decides on you know is this a risk I want to take or not sure yeah I appreciate you talking on that can you kind of give me a range obviously I think retail has a pretty large range depending on you know the type of product and things like that so again let's let's just talk about you know a neighborhood strip center or something like that anchored or unanchored what kind of range in rents are you seen here in the Twin Cities for nat rents so i'd say net rents on a majority of the strip retail is probably going to be on average twenty bucks a foot you know and some in some cases it might be twelve to fourteen in in kind of lower trafficked areas and then on really high high-traffic great quality real estate we've seen lease rates right now and particularly on new construction higher than we've ever seen ever so fifty sixty seventy eighty dollars a square foot is wild what kind of are do you see what the construction costs are to build one of those things yeah it's not cheap it's not cheap you know no secret on construction prices going up double digits year over year you know construction prices might be 300 to 400 a foot all in that you know that's including a lot of your soft costs and hard costs and tenant improvements etc so you know very expensive to build and thereby you need an expensive rent but then what what goes on top of that three or four hundred bucks a foot to build is the land costs and the land costs have gotten very expensive because these retailers are demanding a plus locations only so if it's not at that lid intersection with great real estate I don't want it you know down up one block over down the street might hey I can get you this deal and and I can only you know only you know only need to pay twenty five dollars a square foot and they say no I don't want it I want to be at that intersection and it and it makes sense for me to pay forty or fifty dollars a square foot to be at that intersection because I believe that the sales I can I can get from being here versus there will justify the difference in in rental house yeah it makes sense what kind of cap rate range are you seeing these things trading at so we've seen still pretty good cap rates for well-positioned good fundamental real estate so brand-new construction retail multi tenant assuming you know national and franchise credit might be a six and a quarter to six and three-quarter cap rate kind of depends on location I'd say other than brand new 10-year lease deals I'd say it's probably more in the seven and a quarter to 8.0 range again totally depends on location length of lease term and credit attendance and and just the fundamentals sure no I appreciate that what are the clauses that you think we should have as landlords in our retail leases that are kind of specific to retail tenants so I always like to include a sales reporting clause so very very important for me to understand how well does the tenant is doing and no tenant wants to share that information because it's private and hey as long as I pay you the rent why is it any of your business but my rebuttal to that is always hey you know I keep that information confidential I want to make sure that you're in a position where this rent is affordable for you and and you know if sales are trending down I can see that and hey maybe there's something I can do at the property to improve your sales and help you as a as a partner to your business so I always like to get sales reports if I can get them a lot of a lot of these tenants particularly national and franchise have put in loads of landmines in the leases in the last 10 years so that's something that you have to really be careful about in retail comparative to certain what do you mean by that like little hey if we don't hit this sales number we can cancel at least kind of stuff right so I'd say the most common lease clauses are going to be sales terminations you know hey if I don't hit a million dollars in sales here in any given year I've got the one time right or the ongoing right to terminate the lease that's obviously a major concern for any investor and their lender so it makes it almost impossible to to get a loan on Co tenancy clauses so they might say hey I'm only here because it's a shopping center that people go to and I feed off of the traffic at the shopping center that all these other tenants brings so if the shopping center isn't at least eighty percent leased or 90 percent leased then I can pay an alternative rent which is much lower than than the face value rent or I can also have a right to leaf so that's a pretty common one that you need to be careful about also goes with you know a lot of them tag them to specific retailers so if it's in a Walmart parking lot they say hey if Walmart leaves I have the right to pay minimum rent and you know alternative minimum rent or terminate and that is a major problem a lot of these new developments because you don't own the Walmart you don't know in the grocery store you don't know in a lot of these anchors and and there's nothing you can do if they decide to close the store you're just Sol right yeah we evaluated several retail opportunities and I did find in doing the lease abstracts that process of reading the leases super fun by the way great way to fall asleep if you can't it's funny when I get when I get in the industry you know I thought the leases were long they were 20 or 30 pages long with all the exhibits it was mind-numbing and now it's not crazy with all the exhibits that they put in these things to be 50 60 70 100 pages long for release yeah it's insane so you can get yourself into a lot of trouble if you're just getting started hitting this business and you go do a retail deal and you don't have somebody who's competent like mark on your team to be able to help you weed through those leases and help you basically abstract them and kind of pull out the key things that you need to know you know it's not realistic somebody's gonna read 10 100 page leases and be able to fully digest it all but if you have somebody who's trained on how to scan those leases and kind of abstract them out and kind of put them into a format that you can understand quickly that's worth its weight in gold so make sure you're working with a professional good well I thought we had a good discussion on retail let's transition to doing deals what kinds of deals you working on well what you talking about listing deals or absolutely what yeah we can go through both um can we talk about aid is there any deals that you're willing to talk about that you've done recently on a personal level you know on a personal level I got involved in a handful of those in the last couple years and I'd say you know there's a as an example an old friend of mine convinced me to buy this old Pizza Hut with them which isn't you know a typical investment but was interesting because he owned the apartments next door and I knew the real-estate pretty well because I for invited a million times and and used to lease product nearby and he just kept asking me hey what do you think what do you think what do you think and I told him no no no no no and not at that price anyways I guess what I said and and finally just got to a point where we could pick it up for such a affordable price one of those you know you can't afford to say no deals and and I liked the the function of the building I didn't love the real estate from a retail standpoint so I said hey you know I don't think it's worth buying this and trying to put in a retail restaurant tenant that's gonna rely on the traffic and the you know the retail fundamentals here because you're gonna keep cycling through tenants I've seen a number of my clients through the years have those buildings and restaurants are risky risky businesses and not something that I want to invest my money into so we said well you know the nice thing is this is basically a commercial kitchen that's got the hood it's got all the infrastructure plumbing etc we can afford to buy this and lease it to a commercial kitchen catering company and that's what we ended up ultimately doing so they do a little bit of a you know retailing storefront you know at the front door but I'd say 80 or 90 percent of their business is is catering and out the back door so that's been a nice reuse of a restaurant building that's awesome so so you're able to create the value by rethinking the tenant that's in place right right so that's that's where you add value right is and I'd say that is that's where a lot of my clients are finding value in the retail world or maybe not in the retail world and maybe as another example I had a client that bought an office building I put him into this office building because I liked I like the fundamentals of the real estate and and as we got into it I said you know I think this parking lot this office building is big enough it's over parked this is a really good retail area why don't we develop a pad site there and so that's what we are in the process of developing right now is a 6,000 square foot retail building in this office parking lot and so I think that's where you can find some value in rethinking what what should this real estate be I know it's an office building or industrial building in a retail building today but maybe that's not what it should be highest and best use you got it interesting what are some other ways you've seen or added value to buildings or pieces of real estate you know I think it's a pretty typical you would buy a under leased and undervalued piece of real estate that was tired maybe they hadn't put a facelift on it for quite a while maybe you know needed some capital and you you you remodel it you reposition it and instead of this tired old shopping center dog it is now a you know beautiful looks like brand-new construction deal and you know maybe it was vacant or partially vacant and had some mom-and-pop tenants and you can upgrade the credit of the tenants if you've got a beautiful new looking shopping center that you know functions well has a nice parking field has all of those all of those things we talked about but maybe it was underutilized or under tended because tenants didn't see the value in and the way it looked so let's say I find a tired old shopping center and I evaluate it and get my offer accepted now I want to reach out to corporate and I want to say hey I got a new opportunity I've got this remodeled building we'd love to have you as a tenant how do you let me inside the black box of how you actually talk to retailers and get them interested in your property well you call us everyone know it so you would call the tenant rep who and how would you figure out who managed I mean that's not public data right so you got to be asking around right so the answer is call mark rather yes or someone at my company but you know happy to help but I would say if you're not in the retail world know you know you need to find somebody that is and and you know I again I've got clients that call me all the time you know what do you think who can I put in here and I'll get him in contact with the right person and generally anybody any broker developer in the retail world knows kind of who represents who what broker to talk to a real estate rep to talk to so you know I would say just expand your network and make sure you you've got some retail brokers or owners that could give you some ideas on hate you know go talk to Johnny about Starbucks sort of or go talk to Mike about some other tenant you know everybody knows kind of who who represents who in the brokerage world and if if they're not represented that's you know who to contact it tractor supply or Dollar Tree or who you know wherever gotcha good any last remaining tips that you would have for beginner investors that are listening to the show on when it comes to retail investing retail investing has gotten trickier for sure retailers are getting pickier as to what you know what real estate they'll go into and so you really want to make sure that you read up on you know and understand what makes a good retail property and and bounce you know build your network and bounce ideas off of you know like-minded folks are people that know what's going on in the retail world talked to those tenet reps talked to those tenets or talk to the other investors and developers what you know what makes sense here is this a good deal or not and you know just expand your networking and meet everybody don't don't jump into retail without doing any of that because it's a very dangerous place good you ready for the personal question in the day mark oh boy go on yeah what is a favorite quote that you have favorite quote hmm you know there there's probably a load of them in fact I probably have a handful of them on my wall in my office that now that you put me on the spot I probably couldn't even recite um so I'll leave it I'll leave it the movie I just watch with my son Ricky Bobby would tell you if you ain't first you're last and all joking aside it's a fairly true in the world of sales so if you read in Grant Cardone book I think he's got a book you know if you're not first you're last and you know kind of sounds silly but but in in sales you know if you're if you're not there you're last you know there's only one one place to be and that's at the top so that's that's where you should operate on anything right operate your best yeah a certain level of excellence if you had one day left to live Marc how would you spend it wow that's deep only the easy ones right okay so I think what I would do is be with my family so I've got get three kids and my wife an extended family and I would probably be on an island in the Bahamas and hanging out at the beach doing a little fishing and relaxing good and my final question for you is what advice would you give yourself when you were having just got started in this business good that's a that's a great one so what I just before I came here I was I had an interview with with a young guy that wanted to get in the industry and I'd say what I tell anybody that particularly wants to get in the brokerage side of the business bite the bullet and start do a year or two in property management and understand the nuts and bolts of how how about property works I think that's invaluable data that that you can then add value when you're selling a building leasing a building owning a building if you understand the different HVAC systems and the roofing systems and what to look for you know where water might be draining and will become an issue all of these different aspects of a building or a property that you know when you're young and you're trying to sell something or at least something you got no idea but had you done a year or two in property management you would understand you know what how a building ticks and what to look for I think had had I taken that advice I'd be worlds ahead as I go to invest in and look at properties ya know that's super sound advice kind of taking a step back and being cognizant to learning some of the things that will pay dividends over the long term you got it yeah good well thanks for coming on the show today Marc it's been a blessing and I'm honored to have you on the show we talked about a lot of different stuff I'm just gonna kind of summarize you know retails tricky every sites different every building is different and the economics of those buildings can vary greatly you gave us the formula pasta V parking access signage traffic counts anchor and visibility make sure you're thinking about those things when evaluating a site but most importantly is make sure you get a professional involved so if somebody wants to reach out to you for advice mark how can they get ahold of you can feel free to give me a call or an email my email address is M Robinson ro bi NS o n at mid-america GRP calm or call me at nine five two five six three six six six four well there you have it we got the ringleader retail guy mr. mark Robinson and we are signing off with the creative commercial real estate show thanks Mike [Music] thank you for listening to our show creative commercial head over to our website at creative dot real estate or find us wherever you listen to podcast and please if you like the show leave us a review it really helps us out [Music]