News Briefs

X Team Retail Advisors, a national organization of more than 350 retail real estate brokerages located in nearly 50 markets across the U.S. and Canada, has added a New Jersey affiliate.

The Phoenix-based company has added Pierson Commercial Real Estate, a leading retail real estate brokerage and advisory firm, to its national platform. Headquartered in Marlboro, N.J. with an additional location in New York City, Pierson Commercial’s client base includes approximately two dozen regional and national retailers with growth strategies targeting New Jersey.

“Pierson Commercial brings to our organization a best-in-class affiliate with skills in marketing and property consulting, retail leasing and sales, as well as tenant representation,” said Dave Cheatham, president of X Team Retail Advisors. “The firm will not only boost our East Coast presence for our platform and our clients but will be a well-suited complement to our newly created Retailer Services platform. This addition gives X Team an important gateway to serve the New Jersey market.”

Founded in 2011, Pierson Commercial’s retail leasing and property marketing assignments span over 6 million sq. ft. of retail space across downtown redevelopments, ground-up new construction, and existing retail shopping centers.

“We have an outstanding brokerage team and I’m confident the X Team platform will extend our relationships, resources and open up business development opportunities with other brokerage firms with similar values and cultures across North America,” said Jason Pierson, president of the firm. “It’s an exciting opportunity for us and we are looking forward to being a partner to our X Team counterparts and are delighted and grateful for the opportunity to serve as the X Team’s partner in Central and Northern New Jersey.”

(Photo: Jason Pierson, president of Pierson Commercial)

The nation’s biggest owner of neighborhood centers, Kimco Realty has expanded its roster of tenants in Oregon.

The company has added four new tenants at two shopping centers in the Beaver State. Milwaukie Marketplace, a 185,760-sq.-ft. center in Milwaukie, has added an Ace Hardware (16,389 sq. ft.) and a New Seasons Market (42,630 sq. ft.) to its tenant list.

At Tanasbourne Village, an open-air center in Hillsboro, Kimco has added western apparel retailer Ariat (3,100 sq. ft.) and Sunset Liquor (5,973 sq. ft.) to its tenant list. Each of the four new tenants is already open.

As of March 31, 2024, Jericho, N.Y.-based Kimco owned interests in 569 U.S. shopping centers and mixed-use assets comprising 101 million sq. ft. of gross leasable space.

Earlier this year, Kimco acquired RPT Realty in a $2 billion all-stock deal. In March, it announced the sale of 10 of those former RPT centers for $248 million. Located in Florida, Indiana, Missouri, Michigan, and Wisconsin, the properties total 2.1 million sq. ft. of gross leasable area.

Trust in a home improvement retailer is a major factor for wallet share.

Customers who have "complete" trust in their home improvement retailer make 80% of their purchases there, compared with 69% when the level of trust in the retailer is "good," according to the J.D. Power 2024 U.S. Home Improvement Retailer Satisfaction Study.

Family-owned, Wisconsin-based Menards ranks highest among home improvement retailers in customer satisfaction with a score of 678. Ace Hardware (676) ranks second, followed by Home Depot (665). Lowe’s came in just under the study average (665) at 660.

"Only 58% of customers indicated the store was very clean and 52% indicated product information was clear and helpful,” said Michael Taylor, senior managing director of retail intelligence practice at J.D. Power. “These two factors play a vital role in overall customer trust in the retailer and as customers are spending an average of $1,786 a year on home improvement products, these are areas in which the retailer can improve to increase share of wallet and overall customer satisfaction.”

The J.D. Power survey comes as retail sales rose slightly in April, led by building supply and garden supply stores, indicating the return of home project season for consumers.

The study is based on responses from 2,157 customers who purchased home improvement-related products from a home improvement retailer within the previous 12 months.

Restaurant Brands International Inc. has completed its acquisition of the largest Burger King franchisee in the United States.

In January, the company entered into a deal to acquire Carrols Restaurant Group for $9.55 per share in an all-cash transaction with a total enterprise value of approximately $1.0 billion. With the close of the deal, RBI has added the largest Burger King U.S. franchisee to its portfolio. Carrols operates 1,023 Burger King restaurants in 23 states as well as 59 Popeyes restaurants in six states. 

The transaction is part of Restaurant Brands’ multi-point rejuvenation effort, called “Reclaim the Flame,” to accelerate sales growth and drive franchisee profitability. Launched in September 2022, the plan includes a $250 million investment for a "Royal Reset" modernization program, which includes remodels of approximately 800 locations to a more modern image. (In April, the quick-serve hamburger chain announced an additional $300 million investment to accelerate the modernization of its U.S. restaurants.)

Restaurant Brands will invest a further $500 million to accelerate the reimaging of more than 600 Carrols restaurants before refranchising the majority of the acquired portfolio to new or existing smaller franchise operators over the next seven years.

Restaurant Brands International is one of the world's largest quick service restaurant companies with over $40 billion in annual system-wide sales and more than 30,000 restaurants in more than 120 countries and territories. In addition to Burger King, which has more than 19,000 restaurants, it owns Tim Hortons, Popeyes and Firehouse Subs.

Here’s what two experts had to say about April’s retail sales (as reported by the U.S. Census Bureau).

 David Silverman, senior director, Fitch Ratings:

"No major surprises as April retail sales, except auto and gas, were up about 3.5% relative to 2023, suggesting flattish volumes given a similar CPI reading also this morning. A modestly lower than expected CPI print does provide some hope that inflation is moderating, which could eventually improve consumer sentiment.”

"In April, discretionary goods categories and channels like electronics, home improvement, furniture, and department stores continue to underperform, driven by consumer spending pullback, shifts in spending priorities and comparisons to pandemic-era trends.” 

“Fitch expects the Q1 retail reporting season to be characterized by generally tepid revenue performance, although operating margins across the group could benefit from decelerating cost inflation and sharper inventory and expense planning. We also expect continued retrenchment from weaker players, particularly in competitive categories like apparel, similar to recent wide-scale closure announcements from names like Macy’s, Rue21 and Ted Baker.”

Claire Tassin, retail & e-commerce analyst, Morning Consult.

"Today’s retail sales report reflects a pullback in consumer spending that retailers have called out in recent earnings reports. Spending is unchanged from March to April, and the increase from April 2023 is just 2.7%, while the CPI for the same period is 3.4%. That indicates that the sales gains from a year ago are entirely attributable to inflation, not increased consumer demand.” 

“Home furnishing stores and sports and hobby retailers continue to struggle with large year-over-year declines. Even online retail — a bright spot in last month’s report — shrunk from the previous month (down 1.2%), though e-commerce is still up 7.5% year over year."

CBRE is predicting retail foot traffic to fully recover from the post-pandemic lull later this year.

The real estate investment firm says that according to its latest data, foot traffic in prime trade areas is expected to fully recover to pre-pandemic levels by the third quarter and surpass those levels by 2025.

By the fourth quarter of last year, foot traffic in 10 prime trade areas tracked by foot traffic analytics firm Placer.ai had reached 81% of 2019’s levels, demonstrating a strong recovery. Recent data from the firm showed that visits to major retailers were largely up in the first quarter of this year compared to 2023 levels.

Record-low availability and increasing rents are leading to a rise in street-retail districts. CBRE says rents in prime trade areas have seen an increase of 9% in the Americas and 5.8% globally since 2021.

“Retailers face numerous obstacles to finding the prime space they desire, including record-low availability and rising rents,” said Laura Barr, Americas retail leader for CBRE. "These market conditions are already inspiring forward-thinking retailers and investors to creatively solve for retailer growth targets despite a lack of space.”

Despite a rise in omnichannel shopping, retailers know the importance of having a physical store alongside their online presence, as almost 70% of retail sales are digitally influenced. According to Forrester’s 2023 Retail Competition Tracker, in-store sales accounted for 78% of sales growth in 2022, a significant increase from 46% in 2019. 

The shopping center industry association ICSC estimates that opening a store can boost a retailer's digital sales by nearly 7%. Conversely, closing a store can suppress digital sales by 11.5%.