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Randy Gold, CPA

Las Vegas city planners thought it would be a hoot to host the Billboard Music Awards the same week as 2011's ICSC RECon. While Taylor Swift, Beyonce, and Neil Diamond all gathered to be honored at the Billboards, real estate's best, brightest and legendary were gathered just up the street. In tribute to Rockers and Retailers everywhere, I thought I might strum a few chords about this years gathering of the music and retail real estate industries.

In Real Estate Like Music, Hard Work and Great Talent Pay Off

Most musicians have paid their dues and built a fantastic body of work like Larry Ruben of Plaza Properties in Columbus, Ohio. Larry has been going to RECon for 30 years – at first, lopsided with a heavy briefcase of brochures, not knowing anyone. "My father asked, 'What are you doing? We are in the apartment business not retail!' Today, our booth is across from Walmart's booth... we have come a long way."

Steve Cadranel of Ben Carter Properties in Atlanta is a veteran real estate guy who has been coming to RECon for more years that he cares to admit. His measurement of success? "If you are busy in Vegas but not productive, you haven't had a good show." Steve was both busy and productive. But of course, the ultimate is finding a way of being productive without being too busy.

Brian Broadbent and his father, George Broadbent of The Broadbent Company in Indianapolis own 30 properties, mostly in Indianapolis, Kentucky and Florida. "The economy in Indy is stable but difficult. Leasing has definitely improved but finding debt to refinance projects is still tough, and we are looking at private equity for the first time" Brian said. "We had a great first quarter, probably the best first quarter in 10 years, so that's a good sign. We are doing non-traditional deals with Garden Ridge and Latitude 51, a new entertainment concept coming into a vacant theatre." Their hard work is paying off as the market starts to rebound a bit.

Some Play More Than One Instrument

Marty Herzog, of J. Herzog & Sons, Inc. in Denver is one of those true artists. Marty does not hold any property in his own back yard. "We go where the deal is," Marty said. His chase for the deal has led him to build not only a strong real estate portfolio, but also an oil and gas company. "We have a 92% hit rate because we choose wells that are near existing reserves, so there is a higher chance of success. These are sites that are not yet proven which we may get at a lower price without real wildcatting."

Another example of an artist reaching beyond his genre, Andy Skipper with Evergreen Real Estate, says his sweet spot for 37 years has been single tenant net leased retail. Recently, Skip (to his friends) decided to use the company's skills to develop apartments. "We are also looking at land deals now that we previously would not have ventured into," said Skip. "A Tempe, Arizona multi-family deal, near the university with a built-in tenant base will be a new and exciting opportunity for us."

Rock and Roll, Real Estate and Technology Never Die

Of course the biggest technological advancement at RECon this year... one word... iPad. Leasing agents and owners are using them to show space, pull up sight plans, zoom in and out of project maps, etc... or are they just showing off their iTunes music libraries? Either way, the iPads were everywhere.

Over breakfast Bill Comeau of DLC Management Corp. in NY told me how the company continues to grow and leverage its opportunities. All of DLC's leasing team was equipped with iPads because technology moves fast and so does DLC.

Lenn Jewel of The Weiser Companies in Charleston, South Carolina, recently moved from Virginia. Lenn's muse is equal parts technology and geography. They say Virginia is for lovers. If that's true, Charleston is for lovers and opportunists. Lenn also was struck by the number of iPads at the show. Lenn said, "Our leasing team needs them to keep up with the growing demand for information at their fingertips." Lenn worked the show meeting with lenders and buyers as they continue to look for ways to grow and restructure their large portfolio.

The New Single and the Greatest Hits Album

You know that new hit single that you soon can't live without... the tune quickly becomes your favorite, ringing in your head for weeks. That's the way I feel about one of the best new retailers... who almost didn't have a booth! A last minute entry to the show is a longtime favorite of mine – Menchie's Yogurt from Encino, California. This self serve concept where you add your own toppings and pay by the ounce, had a line down the street for samples. Currently with only 80 stores nationwide, Menchie's is sure to explode next year. If you think the line is long for Auntie Anne's Pretzels, look out; there is a Menchie's coming to a shopping center near you.

Speaking of menches, Joe Sitt with Thor Equities is one of the good guys in the business. Joe's developments are across the country but his booth belted out the Jay Z and Alisha Keys hit song Empire State of Mind. "Concrete jungle where dreams are made of..." his projects in NYC and the surrounding areas continue to impress. With a top notch team of guys, the Thor booth was busy the entire show.

Innovation, Flexibility and Caution – Three Notes to Harmonize

I was fortunate enough to get a personal tour of the hottest development in Atlanta from Cathy Selig of Selig Enterprises. Cathy walked me through the map of the changing face of Midtown. By creating the Midtown Mile, Selig Enterprises is one of the leaders and most innovative developers in Atlanta today. Cathy said, "As the city continues to grow and evolve, this project, The Midtown Mile which includes new retailers to Atlanta like CB2 and new food concepts including STK, will continue to bring more life to a revitalized Midtown."

There's no telling why some songs make it and some songs don't, but here is a sure fire rule. Ron Krausz of The Krausz Companies, Inc.. in San Francisco says "There's no magic answer to this real estate cycle... well maybe one magic answer, be flexible." Ron along with a strong team including Don Russell the company CFO, manage projects from Hawaii to Alaska and everywhere in between... ok not exactly in between, but you get the idea. "We are looking to grow the company through private equity JV's and will soon be developing in Phoenix," said Ron. This is a straight shooting family owned real estate company with a long history of success. In today's market, remaining flexible is advice we can all use.

David Selberg of Poag & McEwen in Memphis wants everyone to know, "Memphis is doing great. The floods haven't washed away Beale Street or Graceland, so come and visit." David has noticed an air of confidence at this years show, and that causes him to be cautious. "There is debt available at 40-60% loan to value with guarantees for existing projects. There is a lot of optimism at the show this year. Not irrational behavior yet but CMBS is aggressive – acquisition is getting aggressive. I hope we have learned from the past few years, but we're probably headed to 80-85% LTV for CMBS markets, so look out."

There are Some Great International Acts

Germany wants in on the party and Michael Sauer of BVT Real Estate Development in Atlanta is working to make that happen. Michael is a German syndicator of real estate projects. His clients look to grow in first tier markets, as second tier markets are harder to sell to German investors. "Historically, multi-family or retail deals have been our targets. Our portfolio includes 59 centers and 4,500 apartment units," said Michael. "Things haven't really gotten moving yet, but capital is available again – some at reasonable prices – but demand is still lacking in the syndication market."

Rafi Zitvar of Global Fund Investments is bringing capital from Israel to the U.S. The company is thriving as Israeli investors have a huge appetite for U.S. property because, as many of you know, Israel is smaller than New Jersey so prime real estate is at a premium.

Charlie Hendon of Hendon Properties in Atlanta is also feeling the international flavor. Charlie has a foreign investor in one of his projects, further proving that everyone wants to be "Comin' to America, Today." But Charlie doesn't let real estate get in the way of his music. At his Tuesday night party at Hard Rock Hotel, Charlie was banging out drum beats, chasing down new guitar plugs and Rockin' Into The Night. Now there's a real estate guy who knows how to have a good time!

The Hardest Working Men in the Business

Charlie shared the headline act at his party with long time friend Ken Bernstein of Acadia Realty Trust in New York. While Ken didn't take the stage to show his musical prowess, he was plenty busy on the show floor and was booked with meetings nearly every 15 minutes. Acadia's strategy is focused on multi-channel retailing using internet sales and regular bricks and mortar sites to maximize the number of touch points with the consumer. "We think our urban retail portfolio is a great match for this strategy," said Acadia Chief Accounting Officer Jon Grisham. "We are always looking for good sites that have a high barrier to entry. Sales volume and lower occupancy costs are the key to why our portfolio is better than a traditional mall." According to Jon, sales volume in their City Point project is twice that of average mall traffic, so the strategy must be working.

Now check out this story of the hardest working man in Vegas. Paul Krough has tended bar for 22 straight years at the RECon booth of The Richard E. Jacobs Group from Cleveland. Paul told me how much he enjoys being invited to tend bar for 3 days each year for the company. Now what does that say about the group's CEO Judd Smith, how he runs the company, and how people are treated? One word, loyalty. Who has the same bartender for 22 years? They may have revamped their portfolio but some things are constant. Richard E. Jacobs was previously focused on regional malls, but as their founder Dick Jacobs would say, regional malls is a one generation business. You can't put a regional mall on every corner, and now that malls are almost everywhere, what should developers do next? Judd elaborated that now there are fewer department stores than there were 20 years ago and retailers don't try to be in every mall like they used to, so he has helped reinvent the company. "We have divested most of our mall portfolio and are working on a large land portfolio with 1,000 acres in northern Ohio and Florida."

Hard work also means getting a little dirt under your fingernails, like Isaac Metzger of Syndicated Equities in Chicago. Isaac is always looking for opportunities in projects that others just don't want. "We don't mind management intensive projects and are thrilled with our latest purchase of a single tenant government office building," Isaac said. "It's stable and our 1,000 or so conservative investors like these projects." Isaac also noticed much more energy at this year's show than in the previous two years, and as a result is excited about his company's growth.

In real estate as in music, it takes more than just talent to be great. It takes patience, adaptability, technology and creativity to reach the top. This year's RECon was a new and welcomed release, and as the market continues to right itself, we can all look forward to some new hits.