RMC Ramps Up Retail Tenant Rep Division
RMC Property Group is a full-service real estate firm headquartered in Tampa, FL that provides retail leasing, property management, development and financial and real estate advisory services. The company's portfolio consists of 50 retail, office, mixed-use and storage properties totaling 4.2 million sq.ft. throughout Florida. RMC specializes in the leasingand operation of grocery-anchored and community shopping centers, and also hasa reputation for its skill regarding shopping center renovation and redevelopment, said chairman Mitchell Rice. He added that the company’s ability to optimize income and a deep knowledge of the costs of both developing and operating shopping centers are what set it apart in the field. “At RMC, we hold the key to running the most successful community strip centers in Florida: The combination of designing the optimal tenant mix, effectively leasing up a property and reducing operating expenses, in conjunction with a hands-on approach, has enabled us to get through these tough economic times and continueto grow our portfolio,” Rice said. “Our solid reputation is a product of our experience,our proven capabilities, our track record and, perhaps above all, the integrity that has defined us over the past 22 years.”
During the past several years, RMC has suffered along with the rest of the industry: Following a halt to development during 2008, the company was forced to reduce both overhead and staff, and endured a substantial drop in leasing activity during 2009 and 2010. Rice said, however, that this difficult stretch afforded the company an opportunity to examine itself and improve upon its methods. “Someone once told me, ‘In good times, one can run a bad business and still be successful, but in bad times, you either run a good business or you fail,’” he said. “Our internal department examinations resulted in many adjustments in order to increase efficiency and operate more cost-effectively.” The company has capitalized on the recession by providing distressed asset services for banks, often through receivership assignments – aservice for which demand has remained high throughout the downturn, Rice said. The company currently has several distressed properties under management throughout Florida, and is frequently called upon by clients for consultation services or to take over properties in need of workout assistance, revitalization or rehabilitation.
“Our experience has been that the earlier we are engaged, the more effective we can be for an owner,” Rice said of the best time for acompany in distress to turn to RMC for help. “We believe that our experience working with lenders over the past two decades, in both good times and bad, has given us great insight into how to manage distressed situations, and calling us earlier in a down cycle increases the likelihood of avoiding further distress.”In ideal circumstances, he added, the company is able to assist an owner with a workout plan that allows the owner to retain ownership of the property.
RMC recently launched its tenant representation division last year, with the goal of becoming one of the preeminent retail tenant representation firms in the southeastern region of the U.S. Since its inception, the new division has worked with several new concepts entering the Floridamarket. One such tenant is health food grocer Fit Life Foods, which opened itsfirst, 2,500 sq.ft. location along Dale Mabry Highway in South Tampa during the fourth quarter of last year with the assistance of RMC, and recently completed a deal for a second Tampa store in Carrollwood. The retailer plans to eventually open 12 locations throughout the state, and Rice said that RMC has been instrumental in developing a solid strategy for their rollout.
Other strong tenants the company has recently worked with include quick-casual nationwide restaurant chains such as Chipotle or Subway, both of which are well-served by their lower price points, Rice said. “We also do quite a bit of work with expanding dollar store operators who are becoming more sophisticated with their merchandising while still maintaining a very low price point,” he added. The company has also recently been selected as a preferred developer for Wawa throughout Florida, and has already secured several new sites for the convenience store chain throughout Tampa Bay andOrlando. “Wawa is a highly-regarded and excellently-operated retailer, andwe’re very excited about the opportunity to work with them,” Rice said. “Giventhe challenging times our market continues to face, we feel fortunate andhonored to be working so closely, and so prolifically, with such a strong retailer.” The company also recently worked with Best Buy to introduce the state’s first Best Buy Mobile store in 2,700 sq.ft. along South Dale Mabry Highway in South Tampa – a deal that Rice considered a win-win for both thetenant and the landlord, as the signing brought the center to 100% occupancy. RMC also has several deals with anchor tenants for their centers that are inthe late stages of negotiation, which the company expects to be able to announce by the end of the third quarter of this year.
Retail expansion in general has been on the rise in Florida this year, but the pace is still fairly slow compared to before the recession hit, Rice said. Certain regions of the state are being affected in different ways: Areas with established housing and higher employment rates are recovering more rapidly, while the suburban areas outside of larger cities – regions that, by contrast, saw substantial growth during the housing boom – have been hit harder than most, as population growth has slowed and consumer spending remains weak. “As a result of the slowdown in new housing growth, the majority of new retail leasing activity is taking place at infill properties where vacancy has been created, and where those retailers that are now back in expansion mode can lease existing, well-located space,” he said.
RMC currently maintains an occupancy rate of about 87% for its own portfolio, with much of its vacancies due to anchor spaces abandoned by failed or struggling retailers during 2009 and 2010. Fortunately, Rice said, the company has been able to refill many of the larger vacancies since then, and has also maintained a focus on retaining existing tenants in order to maintain occupancy and NOI levels. “The key is to help drive additional traffic into the centers, and do anything you can to help improve tenant sales,” he said, citing promotional events at the center or leasing to new tenants with an eye toward the existing tenant mix as ways to accomplish this goal. “We haveworked very hard with our ‘struggling but hopeful’ tenants to provide temporary rental concessions,” he added, “and our property management department has also spent significantly more time in the field in an effort to strengthen landlordand tenant relations. Our ability to keep the properties well leased and reduce operating expenses is a win/win for both the tenant and the landlord.”
Despite the need in some cases to provide such concessionsto tenants, Rice does not feel that this is necessarily a tenant-friendly market, even though a weak market is typically more beneficial for retailers.“I believe it can cut both ways,” he said, adding that the quality of an individual location is more important than the overall health of the market.“As leases come up for renewal, we see some situations where rent reductions are indicated. However, as some of our vacancies are brought to the market, we’ve seen multiple tenants competing for the same space, depending on the location. In a market where new, ground-up development projects face enormous challenges, re-tenanting the recently-vacated space becomes more interesting to those retailers that have resumed their growth strategies.”
For more information, contact Mitchell Rice, RMC Property Group, 8902 North Dale Mabry Highway, Tampa, FL 33614; 813-960-8154, Fax 813-963-2596; Web site: www.rmcpg.com.
Dealmakers, August 11th, 2011