We invite you to check out our new redesigned site http://www.milhausdevelopment.com today along with a new built-in blog. The domain http://www.thinkmixeduse.com will now land you there. The new site solves some navigation issues as well as updates information on our company services in Development, Consulting, Brokerage and Capital. The new blog allows more efficient communication with our clients and readers. It also allows sharing of posts and provides a more customized look for us going forward. Thank you to all who have read and participated here. We’ll be ending this WordPress blog in the next 30 days. Please join us on the new site. We’re looking forward to more discussions.
Milhaus is pleased to sponsor ULI Indiana and are excited about the upcoming Emerging Trends event taking place this Thursday, November 18th (register at http://indiana.uli.org/). Every year this is an event that makes you reevaluate your own business plan and methodology. It also reaffirms or disarms your thoughts on the economy and the trends our industry is taking, not only nationally, but locally. This year we are fortunate to have Jeffrey D. Fisher, Ph.D. and Director of the Benecki Center for Real Estate Studies at Indiana University moderating an panel of high caliber executives. Christie Kelly, CFO at Duke Realty Corporation and Steve Sterrett, CFO of Simon Property Group lead the panel, along with Senior Vice President of ULI Dean Schwanke. It is not often that you get together top executives from two of the largest real estate owners in the world, and have both the retail and office/industrial perspective on the markets from the financial catbirds seat. In addition, Dean Schwanke will be unveiling the Emerging Trends report compiled by ULI/Price Waterhouse Cooper and discussing what the current status of our industry is, and some of the trends that seem to be coming in the future. This looks to be a truly exciting and informative event in addition to the always lively networking.
Winter Farmer's Market at the Maxwell this year
Milhaus is excited to announce the Indy Winter Farmers Market taking place on Saturdays beginning this weekend at the Maxwell. It will run November 13th – April 11th, at 530 E. Ohio Street in Downtown Indianapolis; from 9:30 – 12:30.
As the Indy Star reported earlier this week, “Visitors will find locally produced food and products from regional farmers and food artisans. The new site is on Indy Go bus routes and a few blocks from the Cultural Trail. The market will have 6,000 square feet of floor space, compared to 4,800 at its previous home at 901 N. East Sreet. Customer seating and a children’s area are new this year. There is also a 30-space attached garage for parking.” As a neighborhood resident and business owner, we are pretty excited to help bring such a great event and gathering to our neighborhood, and hopefully people from outside the neighborhood will join us and we can show off how great of a neighborhood we have here. The market is open to the public, and all are welcome to attend and purchase the freshest organic fare you will find in Indianapolis during the cold winter months.
Recently in Oklahoma City there was yet another example of the need for public participation in downtown redevelopment in mid-tier markets. It doesn’t matter what city. Downtown Indianapolis has its own current financing decisions to make. It’s been almost 10 years of parking lots under the old Market Square Arena site. Now, the largest employer in the state has asked the city to loan it $86M so that it can build on its own parking lots. It seems in Oklahoma City the economics are not much different. In these mid-tier markets, the land prices and rents just do not allow new development to pay for itself in the short term. It is obvious to most observers that it is much cheaper in the short term to build far away from existing infrastructure. Until it becomes clear what the long term benefits of compact development will be, how they can be valued, and what the trade-offs are going to be in each affected community; there will be parking lots downtown.
I was fortunate to have a very engaging meeting in Shanghai with the CEO of Lifestyle Centre’s in China a few weeks ago. Regardless of the difficulties of development in the “wild west,” Brian has created a very unique environment not often found in China. American real estate professionals in American can relate to the old phrase “its always bigger in Texas,” and in China the majority of projects are of mind boggling size and scale, to the point of intimidation for even the largest American developers. Many projects are so large and so massive, they almost seem fake (even thought the population and the demographics make them very real).
However, Brian has created a unique neighborhood that feels comfortable, safe and enjoyable as soon as you walk in, a scale that solid developers in America can digest and understand. Maybe it is just that everything around it is so big, but as you walk in the office space or into the bar/restaurant, you immediately feel as if you are at home. This is a neighborhood where you know all your neighbors, know the bartender, etc., as well as live work and play. This is definitely a model and product type that I could see being a huge niche market for LifeStyle centers throughout China, and the entry point for many developers and the development business in China. It also may be a way for “expats” to enter the market who are often dissuaded by the overly large intimidating structures often found in the Chinese markets.
Milhaus Development has been selected by the Local Initiatives Support Corporation (LISC) to assist the Fostering Commercial Urban Strategies (FOCUS) program with revitalization projects in urban areas of Indianapolis. Milhaus will provide advisory services to help accelerate the progress of meaningful commercial development opportunities and reinvestment in the city’s urban neighborhoods.
“We are excited about the real estate development, finance and marketing expertise that Milhaus brings to the table. We’ve already seen how it has succeeded in key neighborhood commercial redevelopment projects,” said Bill Taft, executive director, LISC. “Combined with the hard work of community organizations, this new partnership can create some great wins for our neighborhoods.”
The FOCUS program, which is led by LISC, is an innovative collaboration of the Indianapolis Coalition for Neighborhood Development, the Greater Indianapolis Chamber of Commerce and the City of Indianapolis. FOCUS already has multiple projects underway within selected neighborhoods and community development corporations, including the East 10th Street project led by the East 10th Street Civic Association, the LISC Sustainable Communities Initiative and the Indianapolis 2012 Super Bowl Legacy Economic Development Committee.
“Milhaus is an avid advocate for revitalization of the urban core of major cities and has already played a large role in the development of the Cole-Noble District on the east side of downtown,” said David Leazenby, vice president, predevelopment services, Milhaus Development. “There is a tremendous opportunity for neighborhoods in Indianapolis to become national examples for urban livability and we are excited that our new real estate services division has been chosen to partner with LISC in its redevelopment efforts.”
Steve McLinden stated in his 2006 Shopping Centers Today article, “Once landlords get past the roughly 35 percent of national retailers that ratings agencies dub investment grade, the pickings get slimmer and the credit decisions grow more crucial.” If the picking got slim after only 35 percent of the national retail stage in 2006, today’s definition of credit is surely an enigma. This is a troubling fact for the retail and mixed use development industry, as these credit tenants have been the anchors and building blocks allowing the industry to develop, borrow, build.
So what is a credit tenant today? Only time will tell! However, I encourage emphasis be placed on local/regional tenants as a potential “credit” alternative. Quality local/regional tenants are transparent, hand’s on managers, with strong work ethic and a well thought out business plan. These tenants often provide products unique to the market, and have integrated networks and relationships not available to national retailers. Most importantly however are that personal guarantees (a term from history) are often attainable, providing a valuable collection/bargaining chip. When individuals face losing their home, amazing creatively ensues to produce cash or sales. The US was founded on the back of small business, and continues to be the driving force of the US market. If underwritten and managed appropriately, consideration should be given to the local/regional retailer as a replacement for if not the new “credit tenant.”