2004 Corporate Sponsors Adolfson & Peterson Construction The Avalon Group Benson-Orth Associates, Inc. Bremer Bank, N.A. Brookfield Properties (US) LLC news The Business Journal Cambridge Commercial Realty CB Richard Ellis Volume 18, Number 12 December 2004 The Collyard Group Commercial Partners Title, LLC Construction 70, Inc. CSM Corporation Feature Cuningham Group Architecture, P.A. Evolution, Not Revolution, Dalbec Roofing Exeter Realty Company in Retail Trends Faegre & Benson LLP General Growth Properties, Inc. by Betty Ewens, CLS, Kraus-Anderson Companies Glimcher Properties/Northtown Mall Gray Plant Mooty ost retail trends currently look like business may be beginning to dissuade some Great Clips, Inc. classic evolution-at-work, survival of from that genre, however. H.J. Development, LLP the fittest, driven by competitive M Tax-deferred exchanges have also fueled Heitman Financial Services LLC market forces. What’s ordinary, what’s new? buying activities; investors looking for 1031 J.E. Dunn-North Central And, what about the next revolution? Where exchanges continue to push into the market. J.L. Sullivan Construction, Inc. might the next one of those come from? Jones Lang LaSalle Like-kind exchanges are expected to continue KKE Architects, Inc. Despite continuing concerns about the economy, to be immensely popular, with Tenants-In- Kraus-Anderson Companies job growth and the national debt, the retail real Common (TIC) generating interest. estate market overall is continuing to thrive. LandAmerica Commonwealth A newer trend, likely brought about by Investors are overwhelmingly selecting retail Landform economic necessity, is a greater movement product types as a preferred sector, with Larkin, Hoffman, Daly & Lindgren, Ltd. toward secondary markets. As urban markets grocery-anchored retail and big box leading as LaSalle Bank become more difficult for renovation/ the favored investment, and neighborhood M & I Bank redevelopment and with outer-ring Madison Marquette centers and lifestyle centers a popular choice The Marshall Group as well. The recent stresses in the grocery Messerli & Kramer, P.A. Evolution in Retail Trends continued on page 2 Midwest Maintenance & Mechanical, Inc. Minnesota Roadways North American Properties, Inc. NorthMarq Capital, Inc. Snapshot Oppidan, Inc. Big Lake Town Square Opus Northwest LLC Park Midwest Commercial Real Estate Location: Paster Enterprises, LLC Highway 10 & Reliance Development Company, LLP County Road 43 RLK-Kuusisto Ltd. Robert Muir Company Opening: Summer 2005 Anchor Tenants: Coborn’s Grocery – 50,000 sf Robins, Kaplan, Miller & Ciresi LLP Ridgedale Center Owner/Managing Agent: Oppidan Market Area Served: Highway 10 Corridor RSM McGladrey, Inc. Investment Company between Elk River and St. Cloud RSP Architects Leasing Agent: George Bestrom, Park Additional Facts: Big Lake Town Square is Ryan Companies US, Inc. Midwest Commercial Real Estate the first step in the long-term plan to provide a SuperValu Inc. Target Corporation (763) 847-6668 significant retail base to serve the expanding northwest corridor. Coborn’s new store will TCF National Bank Minnesota Architect: Wolfgram Knutson Architects, Ltd. Towle Financial Services replace the small convenience grocery, filling a United Properties Construction Contractor: Kraus-Anderson void that formerly resulted in grocery customers U.S. Bank Building Division traveling outside their market for major shopping. Leasing is underway on the tenant Venture Mortgage Corporation GLA: 66,600 square feet Weis Builders, Inc. building, positioned with maximum visibility Wells Fargo Bank, N.A. Number of Stores: 11 spaces in the 16,600 sf to the 25,000 vehicles per day on Highway 10 Welsh Companies, LLC tenant building and convenient to Coborn’s generated traffic. Westwood Professional Services EVOLUTION continued living to an urban condominium or multi- Watch this area for more innovation. family high-rise apartment is driven The next revolution could likely come development subject to more competition primarily by convenience and a 24/7 from this sector. and regulations, forays into developing the lifestyle. Downtowns are experiencing a Another mega-trend is the opportunity to smaller markets has blossomed. Rural renewed interest in upscale city living, and develop shopping centers and to open retail communities are luring developers and will attempt to make the most of this trend. major retailers to underserved areas. stores internationally. China, South America, These new customers had previously Mega-retailers are making headlines. Apple Mexico and Canada are key markets to driven up to 250 miles to shop in larger Corp. is setting the pace with its successful watch. European markets have been targeted markets. Many middle markets have pent bricks-and-mortar locations. According to for retail and development for some time up demand and their residents are Retail Traffic, by the end of 2004 Apple now, and should also continue to grow. will have more than 100 stores in its rewarding the retailers and developers who Once upon a time, these trends were portfolio—including sites in Japan and the venture into their communities. REIT’s revolutions. Now we are seeing evolution, U.K. Apple stores generate $1.2 billion in and private investors appear to be the not revolution. Today’s evolving trends sales; 50 percent of the U.S. population is strongest contingent of buyers for these are more intensified versions of what we within a 15-minute drive of an Apple Store. particular markets. have seen in the past few years. What will IKEA is a prime example of the global be the next revolution? Lifestyle centers as a category appear economy. With big box stores in major destined to grow substantially in the near markets, IKEA appears to be a major success future. Currently, developers are here in Minnesota, after opening in July. Bookmark expanding the once narrow definition by Wal-Mart and Target march on, continuing Become a mentor. Here are a few encompassing more aspects, including to expand. The K-Mart/Sears merger resources to get you started: overall size, differing types of retailers and signals a potential mega-retail move to experimenting outside the confines of compete. Certainly, we will see more of Mentoring: How to Develop previous models. Originally seen as the this trend. Successful Mentor Behaviors by domain of a few upscale communities, the Gordon F. Shea. Technology is affecting retail real estate, as broadening definition allows for more The Mentor’s guide: Facilitating variety. Open-air, leisure-based and it is affecting most all sectors. Retailers Effective Learning Relationships by upscale continue to be important, while are moving toward RFID inventory and Lois J. Zachary. shopping and dining experiences set in checkout systems that may ultimately replace the majority of checkout clerks… The Manager’s Pocket Guide to Effective aesthetically pleasing environments are a Mentoring by Dr. Norman Cohen. key component. Incorporating the concept part of the relentless drive to lower costs, of a town center is yet one more aspect while having more information to make Making Mentoring Happen: A Simple that is blending into the lifestyle category. effective business decisions. “Extreme and Effective Guide to Implementing a Successful Mentoring Program by Expect to see many hybrids as developers automation” will likely change our lives Kathy Lacey and retailers attempt to entice shoppers by over the next ten years. Smart cards, in creating inspiring fresh and different use at stores and shopping centers, will visual designs. impact the way we park our cars and 2005 Event Schedule purchase our goods. Retailers such as the General Growth is credited with the new new fitness “boutiques” are providing 24/7 Our monthly program meeting date is the first Wednesday of every month term “retail resort,” describing their new two access cards for customer convenience. (with the exception of December). million square foot project, Jordan Creek Many such retailers may then use on-site All meetings will be held at 8:00 a.m. Town Center, in West Des Moines, Iowa. personnel during peak hours only. (registration at 7:30 a.m.) at the The center consists of an enclosed mall area, Sheraton Bloomington Hotel unless an open-air big-box and lifestyle area, a Wireless fidelity, or “WiFi”, provides otherwise noted or publicized before group of restaurants around a man-made access to the Internet, and is now available in a number of high profile shopping the program. Program topics and lake and a hotel. How do you top that? By location are subject to change. incorporating more and more elements of centers. A newer trend for shopping what it takes to be that “demand” destination. centers, it has been readily available at Wednesday, January 5 – Finance many coffeehouses, copy centers, & Investment Mixed-use projects maximizing the bookstores and fast food restaurants. potential for limited amounts of space in Look for WiFi to be used not only as Wednesday, February 2 – Technology urban areas are a key target for developers an enhancement to lure customers to Wednesday, March 2 – Legislative/ and favored by city planners. Urban stay longer, but also to incorporate Business Day at the Capitol at Four lifestyle developments that feature high- more automation in retail properties, Points Sheraton St. Paul/Capital Hotel rise condominiums with luxurious features such as door locks, security systems and lots of amenities are catching on with and utility controls. Wednesday,