Grocery shopping in 25 square feet or less!

Convenience store shopping not a new concept.  Its actually been around for over 80 years.  The basic art of vending has been around for nearly thousands of years.  However, the 24-hour, vending grocery store is an innovative concept that has been experienced in Europe for several years.  In the US for much less.  

A company based in Belgium, called Shop 24 is rolling out these grocery store vending machines across the US.  The photo to the right is one of a proposed 150 that will be installed at Kroger Grocery stores across the US.  

Basically, these vending machines have approximately 150 products available from milk, lunch meat, soda and pain relievers.  Each location can accept credit cards, coins or bills as payment methods for the items you choose.  The items can be selected in the same manner as you would any other traditional vending machine.  Push different buttons for the corresponding item codes and your items are selected by a robotic arm inside the machine and placed in the "selection bin" for retrieval.

This concept can be used in a number of locations from office buildings, stand along sidewalk stores, malls and in remote outparcels of shop power shopping centers.  Obviously Kroger has bought into the concept as they are going to roll them out across their North American grocery stores.  Consumer convenience will always be important not matter your industry.  What I like about this is that the presentation is clean, professional and can be used in so many applications.  

This machine was placed on a college campus in upstate New York.  I don't believe the machines are capable of holding alcohol, nor do I believe this is legal.  However, students and residents are impressed with the convenience of the concept and the variety of the product offerings.  No word on what income potential is available from these machines as its an new concept to market.  However, in a era where retailing is extremely stale, this variation on the traditional staple is impressive and won't have too many barriers to entry in appropriate settings.

The vending world is changing with consumers habits and needs.  Are your properties receptive to these units?  What would you want to see at your properties if you could have or want one?

What are your exterior walls worth?

Real Estate Ancillary Revenue can take the forms of mulitple different streams.  One lucrative revenue stream is advertising.  Yes, I've discussed this topic before.  However, does anyone know what their walls are actually worth?  Property managers are challenged with tenant signs, vendor signs, etc... on a daily basis.  

What if a media company approaches you about placing a wallscape (billboard on a building wall) on the side of your building.  Wallscapes can be interactive, static or digital projections. If a wall can be seen by thousands of people per day, odds are that it has appeared on the radar screen of a billboard or out-of-home media company.  

  

      

Take a look at this interactive wallscape that was done in Columbus, Ohio for Nationwide Insurance.  Not only were the building walls used, but the parking lot was incorporated into the message as well.  This is one of the best wallscapes I've seen as it conveys a strong message and is undoubtedly memorable.  

Wallscapes or spectaculars (as known in the media world) can take many forms as you can see.  Solid walls aren't the only canvasses available.  Messages can be incorporated into windows, furniture, staircases, etc...  If you have a creative mind you can propose placing messages on any surface.  Also, because this advertising type can generate significant media attention, the revenue potential is also significant.  In some cases, annual rents can equate to several long-term tenant leases.  While this gets some attention to your building, there is little or no impact to the building itself.  Any windows that would be covered, are still usable by tenants.  Most of the time, tenant employees won't be able to tell that a sign is "pasted" on their window.  

Therefore, I ask the question.  What are your exterior walls worth?

Tenant Storage: What are your options?

In my experience, tenant storage has been a major issue for property managers,  leasing personnel and risk managers.  When tenants seek out additional storage on a permanent or temporary basis, odds are they are considering their own interests in their decision.  In reality, tenants taking additional storage in a facility where they operate, can be a major headache for those running the property.

Unless specifically acknowledged in a lease, taking additional storage space is trespassing.  While the majority of us would never accuse a tenant of “trespassing” for taking storage, there are significant risks to the property manager / owners if  not handled correctly.

Storage spaces can take the form of a number of uses.  

•        Storage Trailers placed behind stores or in parking garages
  
•        Use of unrented space in or around a building
  
•        Dedicated storage area used for property management
  

The use of these spaces can put property managers / owners in very difficult positions.  The most importantis that lessees are using the real estate for purposes other than what their lease dictates.  What if an employee or worse a customer was hurt working inside the unapproved storage space?  I can tell you (from experience) the injured person will not seek damages from the employer or business.  They will come after the landlord or property management company responsible maintaining the common area facilities.  Lawsuits, court dates, damage control, public relations remedies would be necessary to correct the situation. 

The situation could have been avoided had the tenant simply leased / licensed space from the landlord.  The agreement doesn’t need to take the form of an existing lease nor are you going to charge “commercial market rent” when quoting.  You also need to obtain a separate certificate of insurance protecting ALL parties involved.   This reduces the risk to the managing party.  You may also ask, what do I charge the prospect interested in storage space.  I simply contacted a few area off site storage providers for rates and then made a determination.   Be prepared that tenants are not going take kindly to your solution of the situation.   Some tenants will say they can seek storage off site.  If so, that’s fine too as they won’t use your space illegally anymore.  You can present your solution as a cost-effective way to avoid a very expensive problem in the future.  Speaking in terms your tenants’ attorneys are going to understand should end the conversation.

Landlords are not looking to squeeze every dime from their tenants.  In reality, they are trying to provide the safest environment possible to conduct business.  Leasing storage space is no different than leasing commercial space.  You need have to document to protect all parties involved in the transaction.  

Wind Power

On my recent trip to Houston , I picked up a copy of the Houston Press.  What caught my attention was the cover of magazine with an artists rendering of T.Boone Pickens in front of several wind turbines.  More and more companies are jumping on to the alternative energy bandwagon as it relates to promoting their "green initiatives".  However, to break into the pursuit of wind energy will require time, persistence and capital.  The time and determination needed can come from our industry.  The capital can be federally subsidized if approached correctly.  Our properties can benefit and generate some additional revenue from these resources.

T.Boone Pickens, an oil tycoon that lives in the panhandle of Texas is single-handedly financing a national energy policy.  He is working building a wind farm across 200,000 acres in Texas that will provide landowners a two-pronged revenue source.  Who would have thought that an oil tycoon would get into the wind business.  He is a businessman after all and he realizes there is significant money to be made by pursuing these alternatives.  Land owners can lease their land for the right to place a wind turbine.  As the wind farm begins producing power, the landowner will receive royalty payments as power is generated and distributed to the market. This is very similar to the transaction that is made between and landowner and an oil and gas company that want the resources below the ground.  The benefits of these new alternative energy sources are well documented.  

The problem we all face is convincing our political leaders that focusing on energy sources closer to home must be a priority.  Regardless of your political affiliation, putting more money in the pockets of real estate owners is a good thing.  While open wind farms are the wave of the future, those in commercial real estate must also take action on pursuing these alternatives. Many companies would be excited to enter buildings powered by energy alternatives.  The public relations benefits would be extreme.  Most commercial properties are in areas where wind is prevalent and the potential to transfer that wind into energy is a possibility.   The revenue potential is available and can make a major direct impact to your bottom line.

Wireless Technology

The explosion of cell phones, smart phones, digital networks is well known and now a part of our everyday lives.  How many people stop and think how all of this information is transferred from point "A" to point "B"?  The "network" that every cell carrier describes and explains is so superior to their competition, is used to transfer messages, phone calls, data.  The network is comprised of thousands of receivers across the world.  Each being hit thousands of times per second by your calls, emails, internet searches, data transfers, etc...  

Where are these receivers?  

These receivers can be placed in many different areas on vacant land towers, rooftops, inside buildings, flagpools, trees, etc...  Technology has helped mask the dreaded towers that are all over the country.  Also, in order to keep up with rising demand for expansive networks, carriers are looking at all different types of real estate to prevent unpopular dead zones.  While Verizon has branded the phrase, how many times have we been on a call when we ask:  Can you hear me now?  

As always, location is key to determining a cell tower viability.  That will determine if a carrier needs stronger signals for increased demand.  Also, the positioning of a building, topography and accessibility also play an important part in positioning a site.  Zoning requirements will also play a role into a cell site development.  Receiver types, aesthetic requirements, ingress/egress opportunities will be questions asking by zoning officials when allowing sites.  All landowners want these sites to be as attractive as possible not only for the cities where they are placed but prevent to prevent eyesores for the public, tenants and visitors.

Casinos, malls and high-rise office buildings in large cities are leasing their interior corridors to carriers as well.  In some cases building walls are too thick to allow signal penetration.  Therefore, the carriers need to transmit signals inside the buildings to allow customers easier communication.  These receivers are more discreet than the traditional towers or rooftop units.  Typically they are placed in the ceilings of common areas and wired between each floor.  A central signal distribution hub is used somewhere inside the building to power the interior network.  This way, all patrons in the basement to the highest floor can have the same amount of "bars" and can communicate just as effectively.

This use must not be confused with any temporary use.  While non-traditional in nature, cellular agreements are traditional leases in everything but name only.  Terms typically run for approximately 10-15 years with option periods included.  Therefore, this brings in significant revenue for a long period.  

When considering a lease, make sure you are working directly with the carrier.  There are many brokers in this business that have their own interests at heart.  Not only, will your negotiation process be much shorter, you will also be sure you have a potential site.  Brokers have been known to tie up multiple sites together to negotiate the best deal.  

Typically you can find more online by googling "Cell tower leasing".  It is a good business to be in considering the wireless community is not going away.

Parking Stripe Advertising

Advertisers are faced with a daily challenge of cutting through the clutter to expose their products to as many people as possible.  Land owners and property managers are being approached by media companies of all types in hopes of using their locations to promote their products.  One such innovative and clean technique I've seen is advertising on parking lot stripes. 

More information can be found at: http://www.parkingstripe.com/

I have used this concept at several properties in the Caribbean as well as the Midwest.  

Basically, the product is a decal that can be placed or stuck onto the parking stripe on the ground.  Any advertising message can be printed on the decal.  The durability of the stripes is what surprised me the most.   They withstood Caribbean summer days and Ohio winters and everything else in between.  

There are several benefits to landlords.  

1. Ancillary Revenue - Landlords can earn upto $2/stripe that is placed.  

2. Cost savings - A strong advertising program can save a on striping of the existing stripes.

3. Tenant Relations - Provide your tenants with a cost-effective and timely promotional campaign immediately in front of stores, buildings, etc...

4.  Call to action - The medium is perfect for providing a call to action for consumers.

A minimum print run is 500 stripes which is significant and can cover a large parking area.  While the concept is still in its infancy, major advertisers such as MasterCard, Pepsi, Home Depot, etc... are pursuing the medium.  The only issue I've experienced is a lack of attention given towards the concept from the creator.  While an advertising company created it, they aren't selling it to major agencies on Madison Ave.  Therefore, in order to get something placed, you will need an advertiser that will commit to using them at your property before you see anything at your facilities.

Interesting concept that has significant potential if the mainstream catches on.