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Year: <span>2018</span>
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Macy’s is Our 2018 Retail Most Valuable Player

Author: Barry Wolfe
Categories: The Wolfe Pack Retail Rating

Macy’s is Our Wolfe Pack Retail Ratings 2018 Most Valuable Player

 

Macy’s has had a rough last couple of years but they didn’t give up and have fought tooth and nail to make their way back. To do so, the iconic retailer has:

  • Gone all-out with its store-within-a-store concept and partnered with leading digitally-native brands, including Facebook 
  • Hired employees to be influencers
  • Acquired disrupter Story
  • Launched a new partnership with b8ta for a brand-agnostic tech store within its store 
  • Tackled the look-and-feel of its stores and invested approximately $200 million this year on 50 of its best stores to add new lighting, flooring and other fixtures (via CNBC)
  • Diversified into the healthy off-price trend. Macy’s has opened about 165 Backstage stores within its stores. The company reports 2x more shopping trips, with basket sizes up an average of 30%. (via CNBC)
  • Accommodated for omnichanneling by creating BOPIS (Buy Online, Pickup In Store) lines in the hopes customers that pickup their online purchases in-store will also add a few more items to their purchase
  • Updated and upgraded its app and rewards program which now allows non-credit card holders to earn points, and offers other cool things like an augmented reality furniture shopping tool

 

The results seem to be paying off. Macy’s:

  • Expects its mobile sales will reach $1 billion by the end of the year
  • Reduced its debt in the last seven quarters from $6.9 billion to $5.5 billion
  • Has experienced growth at the same-store and company-wide levels (see graphics below)

Sales at Macy’s stores open for at least 12 months (on an owned basis, as a %)

 

(Data source: eMarketer; Graphic: Wolfe Retail Group)

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The Time/Money/Risk Benefits of Triple Net Leases

Author: Ashley Anaya
Categories: Blog

The Time/Money/Risk Benefits of Triple Net Leases

 

Investors will often hear that there are many benefits to triple net leases but for those who may be exchanging from multi-family, land, or manufactured home parks—or new investors that may have inherited property—the benefits of the triple-net, may not be clear.

A net lease is a type of commercial lease between a tenant and property owner.  The three most common types of net leases are:

  • Single Net Lease: Tenant pays Rent + Taxes
  • Double Net Lease: Tenant pays Rent + Taxes + Insurance
  • Triple Net Lease: Tenant pays Rent + Taxes + Insurance + Maintenance/Operating Expenses

For the purposes of this article we will conduct a Time/Money/Risk analysis on the triple net lease, which is where, in addition to paying the rent, the tenant-–and not the landlord–-is responsible for paying some or all of the building’s operating expenses such as insurance, taxes, maintenance, repairs, and utilities.

TIME:

Freedom

  • The triple net lease, whether on a single-tenant or multi-tenant property, affords the property owner the most freedom in terms of time and flexibility thanks to its hands-off management structure.

Hands-Off Management

  • With NNN properties, landlords can avoid the typical property management obligations and hassles to enjoy more time to dedicate to things they prefer to do. As noted earlier, in a triple net lease, also known as NNN, the tenant pays for and manages all of the building’s operating expenses, real estate taxes, insurance, and maintenance, freeing the property owner from the responsibility and hassle.

Assets That Hold & Grow Value

  • Triple net lease properties often attract corporate-backed credit tenants. Long-term leases with credit tenants allow your investment to grow and weather economic cycles.

 

MONEY:

Steady & Predictable Passive Income

  • Triple net properties allow property owners to receive a steady and predictable stream of income from a reliable source every month with minimal management and attention.

Reliable Source of Income

  • Single-tenant net-leased properties attract an array of corporate-backed credit tenants that provide greater long-term reliability.

Owner-Friendly Leases

  • Triple net leases often have built-in increases that offer opportunities for better planning for both the tenant and landlord, and provide a hedge against long-term inflation risk. In addition, they also often have options to extend in five or 10-year increments.

Defer Taxes at the Time of the Sale

  • When a property owner is ready to sell, 1031 Exchanges allow them to defer the capital gains on the property

 

RISK:

Less Risk

  • Triple net-leased properties tend to offer less risk than other commercial real estate investments that have tenants with non-investment grade credit profiles, although no investment is risk-free.

Longer Leases / More Stability

  • Triple net-leased properties have longer-term leases that provide greater stability and reduce risk and worry.

 

Ready to invest in a triple net property? Contact us at: 954-245-3416.

 

Learn more about NNN and single-tenant net-leased properties. Watch our video

 

 

All real estate investments carry risks. Nothing in this post shall be construed as tax or investment advice. A buyer and their tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any property to determine to your satisfaction the suitability of the property for your needs.

#NetLeasePro #NNN #CRE #Retail #Single-Tenant #NetLease #CREInvesting #STNL #BarryWolfe

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4 Paws Up for Dunkin’ Donuts!

Author: Ashley Anaya
Categories: bakery cafe,Blog,Restaurants,Retail

It’s 4 Paws Up for Dunkin’ Donuts!

Dunkin’ Donuts has been on fire lately stepping up to the challenge and firing on all cylinders. They’ve taken their, “BLUEPRINT FOR GROWTH” 2018-2020 initiative to heart  and been mega-strengthening their in-store menu as well as their to-go offerings while staying fresh with topical items. But the fresh, fun, and familiar brand isn’t stopping there. In the past year alone, Dunkin’ Donuts:

 

  • Opened their next gen store that includes a beverage bar tap system with Nitro Coffee and new Double Drive-Thru with the first On-the-Go Lane; kiosk ordering and uniforms designed by Life Is Good

  • Announced they plan to eliminate foam cups by 2020

The chain has also announced it plans on 1,000 net new restaurants by the end of 2020, with 90% built outside the Northeast.

These changes are producing results. Second quarter highlights include:

  • Dunkin’ Donuts U.S. comparable store sales increase of 1.4%
  • 64 net new Dunkin’ Donuts in the U.S.
  • Revenues increased 4.9%

Dunkin’ Donuts has done a great job of playing to win. We think they deserve the Wolfe Pack’s Retail Ratings’ Four Paws Up!  Do you agree? Let us know here LINK to LINKEDIN Post

See our available Dukin’ Donuts property for sale here: https://wolferetailgroup.com/properties/dunkin-donuts-7/

#CRE #RETAIL #Dunkin #Donuts #QSR #Restaurants #Coffee #RealEstate #NNN #STNL #RetailRealEstate #Retailing #RealEstate #Dining #DunkinDonuts

 

Images Courtesy of Dunkin’ Donuts

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Macy’s Gets 2.5 Paws Up!

Author: Ashley Anaya
Categories: Blog,The Wolfe Pack Retail Rating

It’s 2.5 Paws Up for Macy’s!

While Macy’s has gotten a bad rap in the last couple of years, we think they’re on their way to making a comeback. Ignoring the recent data breach, Macy’s has been making an effort to reposition itself and play on at least some of its assets.

For example:

  • They’ve recently started to work more closely with influencers, well-known ones with established followings and even more interesting, using its store employees and stylists as Instagram influencers to drive sales.  Read more here.
  • They’re extending their store-within-a-store concept to include pop-up marketplaces which are meant to drive traffic back repeatedly to view what’s next, similar to Story which they recently acquired. 
  • Although they’re still trying to figure this out, Macy’s also jumped into the popular off-price segment by opening Backstage. 

While they’re stumbling in some of these initiatives, we give them credit for making a go of it and for being willing to fight to stay in the game. They’re choosing interesting trends, tapping into their biggest assets–such as beauty, an audience, and real estate–and seem to have stopped looking back to look toward a brighter future for the brand.

We look forward to your comments on LinkedIn here.

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Walmart Vs. Amazon – The Battle of The Retail Giants

Author: Ashley Anaya
Categories: Blog,Retail

Walmart Vs. Amazon – The Battle of The Retail Giants

What’s their next move?

Post by Barry Wolfe

Did you see this one coming?

Sam’s Club is building a small-format concept that will be “centered on convenience and a digital experience” stocking only 1,000 to 2,000 skus. (Read story here: http://www.supermarketnews.com/retail-financial/sam-s-club-develops-small-format-concept)

On the same day, it was revealed that the company opened the first of its new e-commerce fulfillment centers in Memphis, TN.

Interestingly, both announcements were made by Jamie Iannone, CEO of SamsClub.com and EVP of membership and technology.

I see this as a sign of things to come as e-commerce, fulfillment centers and brick-and-mortar locations merge in an omnichanneling landscape. In so many ways, Walmart is ahead of the game on this one. They have 660 Sam’s Clubs ands 4,672 Walmarts in the U.S. for a total of 5,332 sites. Amazon has 75 fulfillment centers and 412 Whole Foods.

This tells me that Walmart is in an excellent position to achieve penetration across a broader spectrum of markets, those that are e-commerce-friendly to slow adapters, from the coasts to rural areas. And, it also tells me that Amazon isn’t likely to sit by on such an unbalanced equation. They are likely to make a move that will allow them deeper market penetration, faster deployment, and access at a localized level. What will give them that advantage?

My inclination is toward drugstores. They’ve tackled food through Whole Foods, whose consumers mirrored their own customer profile and gave them grocery market entry via a physical location in a demographically-aligned trade area.

Next, would be medicine/drugstores/beauty. I’ve said this before as it gives them entry into a growing market segment (beauty) while gaining a foothold in a recession-resistant category (medical/drugstores). I’m not the only one thinking this is their next move. CVS is rolling out delivery for prescriptions and some over-the-counter medicines as it is said to be bracing for Amazon’s possible disruption. (Read more here: https://www.cnbc.com/2018/06/19/cvs-starts-drug-delivery-as-it-braces-for-expected-amazon-disruption.html) The drugstore’s merger with Aetna makes it an even more interesting player as Amazon has been making various supply-side moves.

Interestingly, Walmart just recently filed for several patents including a patents system for accessing medical records stored on a #blockchain, and just last month, Walmart was awarded two patents; one for a digital marketplace system that customers may use to resell items and the other geared towards facilitating customer deliveries to restricted areas using autonomous ground vehicles. Read full story here: https://www.ccn.com/walmart-patents-system-for-accessing-medical-records-stored-on-a-blockchain/

What will be Walmart’s next move? What will be Amazon’s next play?

Let me know your thoughts here: https://www.linkedin.com/feed/update/urn:li:activity:6415976467259224064

 

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Panera Bread Four Paws Up

Author: Ashley Anaya
Categories: Blog

We’re giving Panera Bread Four Paws Up for their commitment to continuous innovation and evolution while staying true to who they are as a brand.

 

 

As an example of their willingness to innovate, Panera recently grew their omni-channeling capabilities by expanding its delivery program to ~13,000 drivers and employees, up from 10k in 2017, making delivery available from 1,300 locations, in 897 cities, in 43 states using their app or website. 

Delivery is driving their digital sales which currently account for 30% of total sales, including kiosk orders. Unlike other chains that have turned to 3rd party delivery partners, which can take a significant cut (up to 30%!), Panera has developed their own fleet to control the process and profit end-to-end. (Think, pizza delivery but for bakery-cafe set.)

In addition, they’ve extended their technology to include mobile ordering and Rapid PickUp®, have a commitment to 100% clean food, and have one of the largest loyalty programs in the industry with over 25 million members (APR ’17).

As a result, Panera has been one of the most successful restaurant companies in history. Before the JAB acquisition in July 2017, Panera was the best-performing restaurant stock of the past 20 years, delivering a total shareholder return up 86-fold from July 18, 1997, to July 18, 2017, compared to a less than twofold increase for the S&P 500 during the same period.

Panera’s vision isn’t solely focused on technology and delivery.

In late 2017, Panera further enhanced its brick-and-mortar commitment by acquiring Au Bon Pain Holding Co. Inc., parent company of the 304-unit Au Bon Pain bakery-café chain. The acquisition reunites Panera and Au Bon Pain, and enhances Panera’s positioning and growth opportunities in new real estate channels, including hospitals, universities and transportation centers.

Excluding the Au Bon Pain acquisition, Panera grew its brick-and-mortar footprint through franchise and company-owned location growth with:

2017 Franchise-Owned*:

  • Outlets at the Start of the Year:  1,099
  • Outlets at the End of the Year:  1,112
  • Net Change:  +13

2017 Company-Owned

  • Outlets at the Start of the Year:  901
  • Outlets at the End of the Year:  931
  • Net Change:  +30

(*Source: FranchiseChatter.com)

In their last public quarterly report in APR 2017 (the same month in which they entered into an agreement to be acquired by JAB), the company reported that company-owned comparable net bakery-cafe sales increased 5.3%, franchise-operated comparable net bakery-cafe sales increased 0.3%, and system-wide comparable net bakery-cafe sales increased 2.6% compared to the same period in fiscal 2016.

 

Be a part of the Panera success model. See our extraordinary selection of single-tenant Panera properties from across the country here: https://wolferetailgroup.com/available-properties-for-sale/

 

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Amazon’s Next Brick-and-Mortar Move

Author: Ashley Anaya
Categories: Blog,Retail

We can all agree that Amazon has been a trigger in the evolution of the retail landscape. This infographic offers a quick look at Amazon’s acquisitions. We think Amazon’s purchase of brick-and-mortar Whole Foods will not be its only foray into physical stores. It was a strategic move that gives them an advantage into a segment which they can service online and offline to maximize their purchasing power and economies of scale in a category which everyone on the planet buys from: food. Plus, it strengthens its Amazon Fresh division and investment. We predict one of its upcoming brick-and-mortar moves will be into another must-have category: drug, health, & beauty. 

Graphic via The Visual Capitalist and Business Insider

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