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Richard Crenian Talks About Retail strategies to survive, and thrive, in 2018

As I’ve written earlier, covered malls are at risk unless they entice shoppers through their doors to spend money rather than shopping online. That means major retailers have to be willing to change their business models to survive.  There is no holy grail waiting to be discovered but being innovative is a starting point. Don’t be surprised if we see more consolidation in the Amazon–Whole Foods mould.

For those of us involved in community plazas, it is paramount to focus on retailers and services that cannot be offered online and require walk-up traffic. Until recent years, that included banks as a key anchor tenant but that may be changing. As lease renewals come up, banks are now considering smaller premises or stand-alone pads as they become less about bank tellers and more about online services. It is likely the traditional 15-year tenancy agreement will be shortened as the banks try to figure out their future in each community landscape.

As the banks try to reposition themselves, we are seeing new companies emerge as principal players in local communities – the most notable has been those offering child care services.  The key to success is becoming more than a single-service outlet. Instead, they are facilitating evening and weekend courses, such as English as a Second Language and cultural awareness nights.

These outlets are operating more like old-fashioned community centres. As a result, they increase foot traffic in the plaza, which in turn boosts potential sales opportunities for other outlets.  Some say we will look back on 2018 as a year of slow-and-steady growth as we deal with interest rates inching higher.

For some tenants, this could be the best time to lock in a lease as it will provide cost certainty. For landlords, having plazas near to capacity, or full, is the best advertisement to attract new tenants.

This year will be great for those who pay attention to details and are prepared for the next upturn. What we are experiencing is a “New Normal” that remains cyclical, but with fewer extremes.

As always, the best measure of your decisions and hunches will be hindsight. On that, some things never change.

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Building better communities – Richard Crenian

Higher density through high-rise living is changing skylines across many parts of the country and turning suburban areas into more exciting places to live and work for many Canadians.

One of biggest challenges for ReDev Properties is finding businesses and services that reflect the diversity and needs of the neighbourhood for our existing properties or in potential new developments. Therefore, a lot of time is spent studying the local area and understanding the emerging trends so we can best serve the residents.

This is very much a partnership involving municipalities, local businesses and ourselves. One of the main reasons we decided to move into the construction of neighbourhood plazas was to help shape the conversation on how best we can serve local communities.

Higher density = better services

While the pace of migration to the suburbs remains high, some areas presently find themselves below certain minimum transit service thresholds, making it difficult for people to move there because it has a poor public transit system.

Higher density is important because it draws in more services – when an infrastructure network is more dispersed, it is going to be more expensive to maintain. Building one structure takes time; creating a neighbourhood takes a lot longer.

The decisions made today may not take shape for another decade or even longer, so developers and planners are always in an anticipatory mode. They have to understand demographic trends to marry supply with demand.

Nodes and corridors are part of the strategy many of us are committed to seeing flourish because they offer a great opportunity for communities to grow organically. Nodes are higher-density areas where pedestrians, transit, residential, employment and essential services are all readily available. These locations are ideally suited to the expertise at ReDev Properties.

The corridors are the transportation routes that link the nodes and may be areas for greater development in the future. As I’ve mentioned in previous articles, we have sought to integrate the unique aspects of each community, as much as possible, into our projects. For example, local libraries have become an important component in the reconfiguration of neighbourhood plazas. Canadians care deeply about the environment and expect to see a careful balance between development and greenfield sites.

We should all be striving to create dynamic areas that offer opportunities to live, work and shop for future generations. As many younger Canadians appear less interested in owning a car, neighbourhoods, to proliferate, will need to have readily available services and a viable transit system.

It was the emergence of this cultural change that prompted ReDev Properties to move into retail construction. We believe a new type of plaza, that will be more in tune with the diverse nature of our changing neighbourhoods, is starting to emerge.

 

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ReDev’s Stance on The Fluctuating Commercial Real Estate in Canada – Richard Crenian

Commercial Real Estate is Being Molded by Cultural Preferences

Keeping a finger on the pulse of the real estate market will help identify opportunity and convert it into sales. Studies have shown that lifestyle retail malls haven’t experienced the same upsurge in popularity in Canada as they have in the United States. Canadians pride value over luxury and opt out of shopping at speciality stores. Canadian consumer culture is inclined towards off-price brands and outlet malls. These cultural consumer preferences heavily inform how the retail landscape restructures itself.

ReDev’s Stance on the Fluctuating Market

Taking over a commercial plaza and upgrading it delivers many significant advantages such as time to market, access to historical data and instant cash flow. This is our business objective and in 2018-2019 we will continue to identify such opportunities, invest, upgrade and increase the value and cash flow of our assets.

ReDev collects data around business operations and individual preferences in order to develop new commercial real estate strategies and adoption of new technologies. Some of the market drivers can be witnessed through market data like the fact that Toronto and Vancouver recorded the lowest downtown office vacancy rates and industrial availability rates in North America in 2017. National industrial average net asking rents reached an all-time high of $6.97 per sq. ft. and that Canada recorded the highest commercial real estate investment volume in the nation’s history at $43.1 billion, setting back-to-back annual records.

Discussing data collection and analysis, with over 310,000 new permanent residents in Canada in 2018 and estimated 340,000 in 2020, the go-to option for a large percentage of those new to Canada will be commercial real estate, indicating we are on plan and on time with a clear and well-defined commercial real estate strategy.

There is tremendous potential to enhance your portfolio by investing, managing, developing and financing real estate assets at the right time. Knowing the fundamentals of the market, identifying valuable investment opportunities, allocating capital, managing an asset’s life-cycle and developing a realistic understanding of the risk tolerance is something that takes an expert eye. With almost two decades’ worth of experience under its belt, ReDev is adept at making strong investment choices and converting those into lucrative prospects.

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Retail Property Owners Can Maximize Occupancy Rates Now – Richard Crenian

Occupancy rates are a vital factor in retail property performance. There have been some shake ups in tenants and the types of tenants who are expected to perform. Yet, with an experienced and well-connected asset management team, retail property investors can find this is a spectacular time to acquire underperforming assets and add a lot of value and cash flow potential to them.

What moves and strategies can help retail property owners keep their investments full of paying tenants?

No matter how great a commercial investment property appears in advance, real returns are going to rely on daily property management. This is especially true to maximizing the extremely important occupancy rate.

High occupancy rates are vital to achieve and maintain for overall attractiveness of a shopping plaza to consumers. Other factors include tenant performance, the negotiation of new leases and securing the most profitable tenants. This will strengthen your NOI and ultimately the value of the property for refinancing or resale.

Pre-empting vacancies by negotiating renewals early, or marketing for new tenants early if a tenant is set on leaving or hasn’t been performing well is a great start. This will minimize any vacant days and reduce turn times. Building relationships and waiting lists of tenants, especially franchise tenant who wants to open multiple locations possibly at each of your retail properties is what really differentiates the high performing retail assets as well.

Improve forward performance by securing tenants who are better suited to survive and thrive with emerging trends. Right now, that may include cannabis and tech-savvy retailers versus overpriced and non-tech savvy boutiques.

Maintain a well-rounded tenant mix that can keep performance and occupancy rates up through different economic phases. A good example of this type of tenant includes drug stores, banks, gyms, coworking spaces, coffee shops, gas stations, wine distributors and discount stores.

Be creative with empty units when you can’t avoid them. Pop up stores, seasonal stores and short-term retailers all can help generate premium rents without having to take big bets on unproven tenants. This can include test locations for startups, temporary event spaces, distribution centers for online orders. You may even wish to divide up spaces for smaller tenants so that less square footage is vacant at any one time.

Further, try taking a holistic approach to your shopping plaza. Hosting events, building community, harnessing consumer loyalty and even adding in mixed use elements for a greater variety of tenants can all be helpful. These are all ways to maximize occupancy rates now. 

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Adding Local Shopping Plazas To Investment Portfolios – Richard Crenian

Although direct investment in this asset class may float under the radar of many individual Canadian investors and families, it comes with many critical benefits. Those benefits may be even better for those getting in right now, given new investments in related enterprises and the strong demand for Canadian real estate from the investors around the world.

Yes there are many charities to support around the world. There are also nice-looking, cheap condos to retire to abroad. Yet, when it comes to investments and establishing a business why not do it close to home?

Canada’s shopping plaza outlook is positive, especially if Canadians continue to invest and support their local economies. As stated by provincial Alberta based grocery chain Freson, “there’s really nobody championing Alberta products, Alberta producers. We’re Albertan. We’ve been here for 63 years”. The Freson Bros. and other Canadian investors believe the outlook is bright for small businesses and home grown products, if their given the attention they deserve. That investment comes back to us in many ways, financially and in community.

Ask billionaire investor Sam Zell the secret to making money and smart financial moves. He’ll tell you it’s all about supply and demand. The world loves Canada, the investment opportunities and the future it offers. It only makes sense that we see that benefit from being involved in supplying the demand, and not just giving it all away. Foreign homebuyers just can’t get enough of our properties nor can commercial real estate investors. Even Peter Thiel’s new venture capital firm Atomic VC is focused on Canada and its talent with its investment in Terminal.

If there is one thing we all need, and will only need more of in the future (besides air and water) it is passive income. Too few investments offer reliable streams of truly passive income with good returns. Shopping plaza investments can offer the passive income that we need.

Commercial property investments in these assets are also great for facilitating wealth growth. This can be organic or controlled by redevelopment, improvements and smarter leasing and management.

Real estate is a hard, tangible asset. While global markets may boom and bust, and even individual assets may fluctuate in value over time, these properties have concrete value and income potential. In tough economic times local shopping plazas are typically the last to take the hit and first to bounce back. This can be critical for those looking for reliable retirement investments.

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Richard Crenian – Supporting Our Community

For over a decade, Mr. Crenian has participated in supporting the Scotiabank Pro-Am Hockey Tournament in the fight against Alzheimer’s disease. In 2015, Mr. Crenian created and funded the Baycrest Match My Gift Campaign with the Baycrest Foundation. The campaign allows every donor to give generously and see their donations doubled through Mr. Crenian’s support.

Currently part of the YPO Ontario GOLD Chapter, Mr. Crenian is involved in various activities within the organization.

He is devoted to sharing his experience and developing the next generation of great minds. He has served as a Governor for Junior Achievement Saskatchewan and formerly sat on the advisory board of the University of Saskatchewan, College of Commerce. He helped launched and is currently mentor of the Entrepreneurs’ Organization, formerly the Young Entrepreneurs’ Organization in Saskatchewan, Edmonton and Toronto. He is also a mentor for Next Canada, a non-profit organization supporting Canada’s new entrepreneurs.

Mr. Crenian’s philanthropic support extends to include the Daily Food Bank, Sunnybrook Hospital Toronto and the Covenant House to name a few.

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Richard Crenian | President of ReDev Properties

Richard Crenian is the Founder and President of ReDev Properties. Ltd, a private real estate asset management company with its head office in Toronto, Canada. ReDev Properties is engaged in the development, acquisition, ownership and management of retail and mix-used income properties predominately located in Western Canada and Ontario.

ReDev is an active leader in the industry, taking a hands-on approach to real estate investment, development and management; with a highly-experienced management team, the Company focuses its operations in Alberta, Saskatchewan, and Ontario. The Company’s core strategy is to provide partners with long-term stable income producing assets and investments. To achieve maximum value for partners, ReDev primarily focuses on assets that has value add potential.

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Richard Crenian – Future of Retail and Commercial Real Estate

Richard Crenian and the Future of Retail and Commercial Real Estate richard-crenian.online Discover why it’s the BEST time to invest in retail space and commercial real estate from Richard Crenian of ReDev Properties!

Watch the video and see how Richard Crenian discusses the benefits of commercial real estate investments in Edmonton today and see why commercial real estate is your best bet as it provides the HIGHEST returns on your investment! See how Richard Crenian and his team at ReDev Properties can guide you towards high-profit commercial real estate investments in Edmonton, and how you can further grow them to earn maximum returns! Ready to get started? Get in touch with Richard Crenian richard-crenian.online/ for more information!

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