Technology Replaces ‘Shower Conversation’
Like a lot of people, I do some of my best thinking in the shower. It’s when the spray is at full volume that, suddenly, I will come up with a headline that had been eluding me, or realize I missed a parent-teacher conference the day before. And during the years I worked in retail, the shower was inevitably where I remembered that I had forgotten to renew a lease.
If you think I’ve gone over the edge, then there are dozens, maybe hundreds, of lease administrators who jumped off with me. The “shower conversation” is a common one among those who deal with retail leases. (Although I was told by one lease administrator that her kick-out epiphanies almost always occurred while she blow-dried her hair.)
I’ve heard every story—leases tracked on index cards, string tied around index fingers, sticky notes affixed to a computer for months, or years, at a time—about the creative ways lease administrators will tickle an important lease action. Manual reminders continue to run rampant in an industry that relies on high tech to run stores.
But recently, the evolution of great real estate technology has started the extinction process of index cards and twine.
A 2007 study, sponsored by real estate performance-management solution provider Accruent, conducted by Retail Systems Alert Group (RSAG) and called “Retail Winners: Real Estate Performance Management,” found that the top retailers are increasingly seeing true value in lease-management applications. For this report, RSAG interviewed three leading retailers, identified only as “Retailer 1, one of the largest discount retailers of men’s apparel in the U.S., operating more than 700 stores in 44 U.S. states and Canada, with annual revenues exceeding $1.5 billion; Retailer 2, which operates about 2,300 specialty stores in the U.S. under three specialty apparel banners and has more than $2 billion in sales per year; and Retailer 3, a $16 billion company operating four separate apparel divisions and more than 3,100 stores worldwide.” Rather than getting bogged down in guessing who’s who, it’s what the report found out about each retailer’s real estate challenges that’s important.
RSAG found that Retailer 2 has had difficulty ascertaining pro forma revenues for new locations. Retailer 3 is challenged by adding stores without negatively impacting revenue. All three historically administered leases—tracking escalation clauses, common area maintenance requirements, et al—via spreadsheets, but are now shedding the old ways in favor of upgraded technology. According to Retailer 1, “Only good things will happen when you have that technology present…and nothing good will ever come from not having that information.”
We packed plenty of good information into this expanded real estate edition—from results of our 18th annual Fastest-Growing Developers, Acquirers and Managers surveys (pages 62-92), to profiles and previews of projects you’ll see at the International Council of Shopping Centers’ Spring Convention (May 20-23) in Las Vegas, to an entire section (starting on page 155) devoted to the real estate technology and solutions that are supplanting the index card and returning twine to the utility drawer.