It’s common knowledge that today’s consumer now varies shopping strategies to get the best deals. The days of the strictly brick-and-mortar shopper are dwindling – which is why it is imperative for commercial real estate professionals to help retailers get savvy and build their online shopping audience just as much as their in-store shopper.

Customers still enjoy walking into stores, touching products and interacting with sales associates. No online experience can duplicate in-store human-to-human interaction. But what retailers have discovered is that an in-store shopper who is also an online shopper is a very profitable shopper – and that sales productivity doesn’t just double, but triples…and in some cases, goes to an even higher multiple.

This is why it’s important to explore how developers and commercial real estate leasing professionals of shopping centers can best work with retailers in an online and in-center partnership to drive traffic and sales. Utilizing the omni-channel approach can accomplish this, as the term omni-channel describes connecting in-store with online compatibility for a seamless, cohesive customer service experience. New technologies such as geo-fencing and “push” marketing are designed for precisely this purpose. In fact, Oracle Responsys recently conducted a mobile marketing survey and found that 68% of consumers have enabled push notifications for their mobile apps, with 57% having downloaded apps of their favorite brands.

Why are consumers opting to receive notifications? According to the study, the #1 reason is so that they can stay up to date on special or exclusive offers.

This is great news for retailers as consumers are actively seeking to interact with brands by opting into notifications to get a good deal. In other words, customers want to be sent daily or weekly deals of the retailer’s choosing. To take it a step further, combine these efforts with the approach of geo-fencing. This means that if a customer with a smartphone equipped with push notifications is near a store in a defined geographic area, messages can be sent to the customer letting them know of promotions, which encourages the mobile user to enter the store and take advantage of the available deals.

For example, Neiman Marcus uses geo-fencing technology to learn when VIP customers have entered their stores. Sales associates are then able to view the customer’s previous purchase history and provide a personalized experience for the customer based on verifiable shopping tendencies. This builds a stronger loyalty from the customer and can increase the overall dollar amount spent, as shoppers who feel comfortable and respected are more likely to increase spending. The trick however is not to be invasive with these technologies. Retailers must ensure that engagement with sales associates and apps are a pleasurable and addicting experience – not annoying.

Pleasurable and addicting experiences for consumers primarily revolve around saving money with increased use. Restaurant Bub’s at the Ballpark in San Diego, CA offers a free serving of tater tots to customers who can prove to the serving staff that they “checked in” to the establishment on Facebook. Starbucks occasionally offers Frappuccino “happy hours” in specific locations, providing promotional prices only to those customers who are in range of the location and have the Starbucks app.

Another easy way to combine in-store marketing efforts with an online audience is to offer complimentary WiFi access. This encourages customers to enter a store and get online, blending the two experiences seamlessly. Inviting customers in with something as inexpensive as WiFi access is a welcoming way to encourage your audience to get to know your brand and shop both online and in-store at minimal cost. To limit WiFi overuse by loiterers who don’t intend to buy, retailers can remedy this issue with a WiFi password, or limiting the amount of time WiFi is accessible.

Omni-channel messaging and purchasing channels are a great way to reach online customers and engage in-store shoppers on a higher level. Tim Meissner, a Principal at Meissner Jacquet Commercial Real Estate Services, understands the importance of staying abreast of current trends, especially those that affect the commercial real estate industry. From his experience, Meissner believes that “commercial real estate professionals, such as property managers and leasing agents can utilize trends such as these to their benefit by advising retailers of these strategies, which further demonstrates a commercial real estate professional’s value while delivering desirable results for both retailers and shoppers alike.”

Source: Responsys

In 1996, California became the first state to legalize marijuana for medicinal purposes, but a bill to make the recreational use of marijuana legal has been on the California books for over 45 years (in some form or fashion) and it has yet to pass. The latest, strongest push for legalization of recreational use of marijuana is poised to happen in 2016.

Colorado and Washington made pot legal for both recreational and medicinal use in 2012. Although both states have been slowed by some road bumps along the way, (mainly Washington), one thing is very clear – commercial real estate in both states has been greatly affected, especially in Colorado.

Why? First of all, the potential money to be made from the cultivation and distribution of marijuana is staggering. According to Jeffrey Miron, an economics professor at Harvard University, “The cannabis industry would generate about $20 billion a year if it was legal nationally.” But before that can happen, growers are in need of a place to cultivate their product. And here’s where the commercial real estate market is set to reap the benefits, warehouses are the ideal space.

This is what is happening with industrial space in Colorado.

Marijuana cultivation isn’t legal in every part of Colorado, but it is in Denver. Thereby available warehouse space is becoming very scarce.  At 3.1%, Denver’s industrial vacancy rate is the lowest it’s been in decades. The estimate’s on the industrial space square feet used for pot cultivation, according to Commercial real estate tracker Xceligent Inc., it’s “ about 4.5 million square feet — the equivalent of 78 football fields.”

“This industry has come on so fast that initially I was uneasy — it seemed like a fad,” said Brad Calbert, president of the Colliers International brokerage in Denver. “But what’s making it sustainable is supply, demand and capital. Supply is deficient, demand is excessive, and capital is abundant.”

The state of Washington has also legalized marijuana sales, but legal retailing hasn’t been approved. “There are numerous reports of pot being sold via Craigslist and other sites, however, with customers ordering it up as if it were pizza”, stated reporter Fred Barbash of The Washington Post.  Following the trend in Denver, warehouse space is already being snatched up in Washington in anticipation of retailing legalization.

But there are two not-so-sunny sides to the boom. After choking on the cost of a premium priced warehouse for pot cultivation, cultivators have had to prepare themselves for another shock. The electricity bills are astounding. Experts say that the energy consumption in the pot cultivation business is extremely high. Also, the lights in these facilities stay on 24/7 as does the climate control.

What does this mean for the commercial real estate market in California? This Spring in California, initial platform support for “the legalization, regulation and taxation of pot in a manner similar to that of tobacco or alcohol” was adopted by a near-unanimous voice vote from democratic state delegates.

It appears that full-fledged legalized marijuana sales are moving closer and closer to a reality in California. The question is, has the California commercial real estate market prepared for the onslaught of industrial space demand?

As Q2 industrial market data indicates, San Diego is in a good position to respond to the forecasted demand for warehouse space, given the rising rental rates and steady completions over the past 3 years. Jerry Jacquet, a Principal at Meissner Jacquét Commercial Real Estate Services, adds that “before any space is occupied, commercial real estate professionals must ensure that all legislative, legal and appropriate business practices are adhered to.”

Sources:

The Denver Post

Bloomberg

Realtor.org

Huffington Post

Building green means incorporating environmental, economic and social sustainability considerations, often called the triple bottom line, into every aspect of planning, design and construction. It is projected that 51% of firms building in 2014 will be dedicated to constructing green buildings.

The commercial buildings sector has the most meteoric growth in green building. According to Forbes, “By 2015, green buildings in the commercial sector are expected to triple, accounting for $120 billion to $145 billion in new construction and $14 billion to $18 billion in major retrofit and renovation projects.” What used to be “the right thing to do” is now making solid business sense on every level. It has become a matter of course for builders to consider how sustainability can be assimilated into commercial real estate, both new and existing. Building owners and occupiers are demanding it and developers must deliver it.

At a high level, two elements command or galvanize organizations and individuals to zero in on sustainability. The first – legislation standards – are outside of the control of commercial real estate / construction professionals. The second – business drivers – allows commercial real estate professionals who have elected to build green to provide thoughtful leadership on green building to their peers, their industry, and their community.  This helps establish their credibility and positively impacts their bottom line.

Meissner Jacquét Commercial Real Estate Services experiences first-hand this energy efficiency trend with the property owners, tenants and vendors that it interacts with.  Jerry Jacquet, Principal at Meissner Jacquét, notes that “more and more property owners are electing to institute energy management and sustainability practices and the tenants are enjoying some of the savings on operating expense pass-throughs.”

In addition to these overarching factors, a number of interesting trends have emerged surrounding the global drive to build green. A report titled, World Green Building Trends, (produced by McGraw Hill Construction in partnership with United Technologies) walks through green building trends in 60 countries across the globe to uncover the level of global activity, challenges, social and environmental influencers, business benefits, legal factors, general impact, and ratings systems. There is an emphasis on the 9 countries that are leading the effort, with the United States as one.

One of the primary authors of the report, John Mandyck, Chief Sustainability Officer, UTC Climate Controls and Security, introduces the report this way, “By promoting greater efficiencies for energy and water, green buildings lower building costs while conserving the world’s precious resources. This powerful combination of built-in payback with environmental stewardship creates a new value proposition that is accelerating in all regions of the globe.” Let’s walk through some of the trends cited in the McGraw Hill reports and in other similar studies.

Institutional investors are embracing ESG (energy, social, governance) best practices. Commercial real estate investors are taking into consideration a public corporation’s feasibility for long-term sustainability when performing due diligence. While the first consideration is always the financial viability of the corporation, more and more often, an ESG analysis is done as well. For a growing number of investors, ESG factors are not only very tangible, but are felt to reflect the caliber of both a company’s leadership and its ability to stay ahead of the curve.  Corporate executives who recognize the importance of ESG and Sustainability to the capital markets partakers and players — and for a growing number of their partners — are creating compelling Corporate Responsibility and Sustainability strategies, resources, programs, and key partnerships with instrumental third-parties.

Cities and states are stepping up energy disclosure requirements. Several cities and a few states in the U.S. have established policies requiring sustainability benchmarking and disclosure for large buildings. All cities and states that require benchmarking call for the use of ENERGY STAR Portfolio Manager, a free online software tool created by the U.S. EPA.  Kevin Tagle, Vice President at Meissner Jacquét, ensures that the company’s real estate management staff is kept abreast of the changing governmental policies, such as California’s Nonresidential Building Energy Use Disclosure Program (AB 1103).  Besides the requirement to conform, Kevin says that “property owners should view the bill as an opportunity to take advantage of available energy rebates / incentives.”

Commercial real estate occupants and tenants are demanding green. “Green building is fundamentally altering real estate market dynamics – the nature of the product demanded by tenants, constructed by developers, required by governments and favored by capital providers,” according to RREEF Research.  RREEF goes on to say, “The upshot will be a redefinition of what constitutes Class A (high end) properties and even institutional-quality real estate.”

Real estate investment funds are developing sustainability reporting requirements. Increasingly more investors realize that social and environmental factors have an impact on the value of a commercial real estate property, and there is growing interest in sustainable buildings. Real Estate investment fund organizations are developing comprehensive reporting systems, suitable benchmarking methods for energy consumption, and pollutant emissions.

There are sustainability Tax incentives too. Government agencies, utilities and others offer a variety of tax credits, rebates and other incentives to support energy efficiency, encourage the use of renewable energy sources, and support efforts to conserve energy and reduce pollution. The rating and evaluation of the impact these sustainable solutions make has developed into an industry in itself. Premier methods of assessment include BREEAM and LEED.

Commercial Real Estate Asset Managers are using green strategies to reduce costs. With comprehensive green asset management, operating costs go down, tax credit opportunities are available, environmental hazards are decreased, occupant utility savings improve, and potential tenants are drawn to the allure of a healthy, green work environment.

Finally, growing empirical evidence is showing that there is long-term value in “going green”.  Data shows that it pays by meeting regulatory compliance, mitigating overall risk, garnering real savings in materials, and reducing health risks. It’s also the environmentally responsible thing to do.

Sources:

• World Green Building Trends – by McGraw Hill Construction and United Technologies
• 8 Reasons Sustainability Trends Are Driving Commercial Real Estate Value – by National Real Estate Investor
• California Energy Commission, Nonresidential Building Energy Use Disclosure Program (AB 1103)