Category: Connexus Magazine

By Sheryl S. Jackson 

There is no such thing as a crystal ball that can prepare retail facilities managers for the future, but FMs can look to California for a preview of what might happen in building energy efficiency requirements. 

The state’s Title 24 energy standards were enacted in 1978 and are updated every three years to reflect new energy efficient technologies and construction methods. All new construction of, and additions and alterations to, residential and nonresidential buildings are covered except hospitals, nursing homes, correctional centers, jails and prisons. 

“There are three areas of the Title 24 standards that affect retail facility managers most — HVAC, indoor air quality and lighting,” said CP Pitones, Senior Account Executive at Yardi Energy. “These are critical areas for retailers because all affect the overall customer experience.”

“There is a high, stringent standard set for HVAC systems with rooftop units, such as those used for many big box and retail stores,” said Yiming Peng, P.E., Energy Engineer at Yardi. The 2016 standards require an integrated energy efficiency ratio of 12.9 for a typical retail rooftop unit between 5 and 10 tons, which is a 13 percent increase from the 2013 standards. To ensure compliance with the standards, Title 24 also includes extensive acceptance testing procedures for HVAC equipment, he pointed out. 

Minimum standards 

In addition to setting efficiency expectations for HVAC systems, lighting systems also have minimum standards that must be met in Title 24 regulations, Peng explained. “There is a light power allowance for retail spaces — a maximum of 1.2 watts per square foot,” he said. Use of energy efficient lighting, such as LED systems; daylight harvesting strategies, such as skylights and daylighting control; and occupancy-related, automatic dimming controls to lower light levels when the building or parts of the building are not occupied are innovative approaches that lower the power use of lighting systems, he added.

Because compliance with indoor air quality standards relies on a ventilation system that brings outdoor air into the building, it is critical FMs develop a robust preventive maintenance program that includes regular filter changes to optimize the system’s effectiveness and energy efficiency, Pitones said. “The use of a demand control ventilation system that automatically adjusts operation based on occupancy levels also improves energy efficiency,” he said. “The system is designed to adjust ventilation rates based on the carbon dioxide levels that vary with occupancy.”

Throughout the design and construction phases of new construction or renovation, code enforcement personnel inspect to determine and test for compliance with standards. “The penalty for noncompliance is straightforward — an occupancy certificate is not issued,” Pitones said. Financially, this not only means the retailer must continue construction to bring the building into compliance, but also results in lost revenue as the opening is delayed. 

One caution offered by Peng is for FMs who might want to change what appears to be a small component or portion of an HVAC, lighting or ventilation system. “There are complicated trigger points that determine whether a project must comply with Title 24,” he said. Although the regulations include a spreadsheet detailing the specific trigger points, determining if a project requires Title 24 compliance can be complicated. “Consulting with a professional engineer who is familiar with the standards and trigger points is recommended,” he added.

State by state 

Peng doesn’t anticipate other states will adopt or write their own standards based on California’s Title 24, but he also noted that California has influenced some of the standards changes adopted by ASHRAE [American Society of Heating, Refrigerating and Air-Conditioning Engineers]. Not only do ASHRAE standards for energy efficiency set the baseline for LEED and Energy Star certification, but they are also used nationally by most states. As ASHRAE incorporates California requirements, states that rely on the national standards will be adopting components of the California standards — something that is already happening, he said. “The most recent version of ASHRAE standards reflect California standards, including the mandatory use of variable speed drives for a wider selection of HVAC application, including fans, pumps and compressors.”

Building codes, environmental rules and ordinances are constantly evolving. As demonstrated by Title 24, there are many discrepancies between the codes in one state and those in a different state. There are even differences between cities within the same state. These varying factors illustrate the importance of the facility manager’s role, as he or she seeks to monitor and manage dozens of retail locations.

PRSM spoke with Lou DiDomenico, Director of Program Management at Ferrandino & Son, Inc., and Master Plumber Joe Smedley, the company’s Senior Project Manager, Plumbing Division , to help explain some of the basics. Here are some tips on how to properly vet and choose a great commercial plumber.  

Check their website

As the search for a plumber begins, Smedley suggests eliminating any who do not have a website. “And while reviewing the website, do some investigative work,” he said. “Check to ensure the plumbers are properly licensed and insured. Look for pictures of their trucks or crews. Make sure they have referrals or testimonials. How long have they been in business? Has anyone you personally know used them in the past?”

Trust your instincts

Use your intuition when you evaluate whether a company is telling the truth or misrepresenting themselves, said DiDomenico, who has worked in the plumbing, lighting and electrical trade businesses for more than 20 years. “Today, anyone can go to Home Depot and buy a drill and claim to be able to fix problems,” DiDomenico said. “It’s always important to research the company and check their credentials to ensure they’re up to date.” There are three accredited levels of plumbers, the lowest level being an ‘apprentice’; then ‘journeyman’; and finally, ‘master.’ Ask what level your potential plumber has attained, as that provides a definite gauge of his skill level and knowledge of the business.

Upon meeting, check their identity

When a plumbing company arrives at your store, check their appearance. “Do they have a uniform? Proper identification? The correct paperwork? You want to ensure they are who they say they are,” DiDomenico explained.  

Confirm they can handle any and all problems

Ask questions about the problem and potential solutions they propose. “Don’t be afraid to ask the plumber to explain every step and detail involved in completing the repair,” Smedley said. “It’s always best to challenge the plumber to explain everything they will be doing. It’s a good way to ensure he knows his stuff.”  

DiDomenico also stressed that a plumbing company should be prepared to address a wide-variety of situations. “Sometimes plumbers will tell you they don’t have the part, or they’ll come back in a few days,” he said. “You don’t want to hire someone who isn’t fully prepared to resolve your issues in a timely manner. Ask if they have the necessary materials to make the repair, and if they do not, ask if they’re affiliated with local companies who can provide the tool or part quickly.”

Make sure they are tech savvy

Technology is also becoming more prevalent in the plumbing industry, and technical capabilities are something you should expect in the plumber you hire. For example, a tech-savvy plumber can insert a small camera into a pipe to quickly and accurately assess what problems might be occurring, which usually saves valuable time and money. “Especially for larger retailers, make sure the plumbing company selected has high-tech equipment, or at least has access to it,” DiDomenico said. “Technology can also assist with accurately recording work hours, or time on the job, to ensure the retailer is paying a fair price for the service.”

AFTER THE FIX

If you did your homework before you hired a plumber, hopefully you can rest easy that your plumbing problems are resolved. 

“That’s why you researched and reviewed plumbers before you hired one,” Smedley explained. “Obviously you will know if a plumber has fixed a leak — that’s pretty straight forward. However, for some in-depth work, it’s more difficult to measure success. Properly vetting a plumbing business will usually provide improved results for your store.”

By Matt Alderton

Retailers collectively spend more than $21 billion per year on energy — over $3 billion of which could be saved with energy-efficiency measures, according to the Retail Industry Leaders Association.

Such measures can be especially impactful in multi-use retail, said Tom Kay, Vice President of Sales and Marketing at Entouch, a provider of turnkey energy management solutions for multi-unit enterprises. Adding a restaurant, for example, means adding refrigeration, ovens and fryers, all of which consume a lot of energy. Likewise for espresso machines in cafés, medical imaging equipment in health care clinics and ATMs in banking centers.

Because of their additional energy requirements, retailers incorporating nontraditional venues into traditional stores should expect bloated energy bills. That is, unless retail facility managers follow Kay’s advice for shrinking the energy footprint of new multi-use spaces:

Establish a baseline.

Because you can’t manage what you don’t measure, first you must determine how much energy your facility uses, and at what cost.

“Often, a facility manager is given authority over energy, but they have no visibility into energy spent,” Kay explained. He recommends obtaining regular energy statements from accounting to establish a baseline against which you can track progress.

There are numerous energy metrics worth monitoring. One of the most fruitful is kilowatt-hour per square foot (KWH/Ft2), calculated by dividing total energy use by the square footage of your facility. The lower the number, the lower the total energy cost. Retailers’ target should be less than 16 KWH/Ft2, according to information from Entouch.

Plan ahead.

It’s not enough to study energy statements. Facility managers must also study equipment, some of which may be new to them in the case of multi-use retail.

“If my leadership team made the decision to change the format of my store from Building Type A to Building Type B — and Building Type B had a restaurant or café in it, I, as a facility manager, would have to really up my game in terms of understanding the equipment that’s being brought into my store,” Kay said. He recommends taking inventory of new equipment and researching its expected performance. Doing so might reveal opportunities for optimization. Kitchen equipment, for example, doesn’t just consume electricity; it also generates heat. Facility managers who know that can plan ahead with HVAC upgrades or behavioral modifications that reduce cooling loads.

In the same spirit, facility managers who will work in new multi-use stores must seek a seat at the planning table to ensure they’re energy-optimized.

“The facility manager today may not have visibility into what’s planned for tomorrow, so I would encourage them to partner with their counterparts in the new construction, real estate and design departments, to clearly understand where the company, as a whole, is going,” Kay explained. He said stores perform best when they’re designed with long-term maintenance in mind.

Explore the cutting edge.

Energy management is evolving rapidly. Two innovation centers that are particularly promising for multi-use retail are energy storage and the Internet of Things (IoT).

In energy storage, suppliers are rapidly maturing new chemical and thermal batteries that can capture and store cheap electricity to apply toward energy-intensive tasks like refrigeration; retailers can acquire energy from the electrical grid during off-peak hours, when costs are low, and store it in batteries that discharge it during on-peak hours, when costs are high.

“If you’re smart, you will minimize the use of peak energy,” Kay said. Retailers can also reduce peak energy consumption with “staging” — powering on rooftop HVAC units or other equipment incrementally — instead of all at once — to reduce energy loads.

Then, there’s the IoT, at the heart of which are internet-connected sensors that enable real-time energy monitoring and reporting. When they use an IoT-enabled energy management solution, facility managers receive early notice when equipment is underperforming, which helps them perform preventative maintenance that optimizes energy consumption and extends the life of equipment. They can also adjust operations on the fly in response to energy fluctuations and — especially helpful in multi-use retail — divide stores into “zones” that can be dynamically managed based on their unique energy profiles. For example, if a store needs extra cooling in its restaurant because of kitchen heat, the facility manager can keep energy costs in check by lowering the temperature there and maintaining it elsewhere.

Pick low-hanging fruit.

Although multi-use retail is complex, energy management doesn’t have to be. In fact, some of the most effective energy measures are also the simplest.

Start with the thermostat, for example. “If your thermostat is located on the store floor, or even in the manager’s office, employees are going to play with it unless you establish some level of control,” Kay explained. You can physically restrict access to the thermostat or digitally program it to stay within a chosen range. Either way, a stable temperature translates into stable energy bills.

Another simple strategy is lighting. “If you have not converted to LED lighting, do it now because there’s a large amount of energy being [wasted] by old lighting equipment,” Kay said.

Kay concluded, “The retail facility manager is often seen as a cost center. But when they have actionable data about their assets and energy spend, retail facility managers become a cost-avoidance center, instead. And potentially even a profit center.” 

Challenges

Parking Concerns

Traffic is always a concern with high-density retail areas. With mixed-use spaces, however, you also need to take into account residential vs. retail parking availability to create a balance between visitor and dwelling parking spots.

Noise and Sound Issues

You must take into account how close businesses are to residential areas. Noise pollution at inopportune times of the day can be problematic to residents.

Security

Access to certain areas within a building can be tricky. Specific users need to be allowed in some areas, while others must be prohibited. Finding a way to separate functions and access must be decided early in the planning process.

Benefits

Improved Walkability

There has been a shift toward a desire to live within walking distance to restaurants, retail and workspaces in recent years. Mixed-use facilities are able to offer this walkability by combining these spaces into one.

Lower Infrastructure Costs

By having businesses closer together, municipalities often are able to save money on roads, sewers and essential personnel like police and fire departments.

More Vibrant Communities

Mixed-use facilities offer amenities that foster community interaction. Plazas and parks, along with numerous shopping and dining options, can attract more buyers.

By Mary Lou Jay 

Pop-up shops provide retailers with opportunities to boost brand awareness, engage current and new customers and promote selected merchandise. But pop-ups present several challenges for facility managers, whether the unused space that they’re converting into a temporary store is in a mall, a strip shopping center or freestanding. 

“Pop-ups are one of the fastest turnaround projects FMs are given, and, for many of them, these are first-time projects,” said Alexandra Sanchez, Sales Manager for Branded Group, a facilities maintenance company. FMs often don’t know what to expect in preparing, maintaining and closing out the space.

Problems can begin with the acquisition of the space. Sanchez said that in most companies, the real estate department doesn’t consult the FM before signing the lease. As a result, FMs may have to resolve — on a schedule that can be as short as two weeks — plumbing, electrical or HVAC issues. “These pop-ups are something retailers want to have done as fast as possible and as cost-effective as possible,” Sanchez added.

But pop-ups can’t reflect that cheap and fast approach; they have to be a finished, inviting space that’s consistent with the brand, according to Kate Turner, Facilities Manager at beauty retailer Glossier. The company’s most recent pop-up, in an old, converted fire station in Chicago’s North Loop, was open from mid-August through October 2018.

Turner worked with an architect and a general contractor to ensure any changes made to this space complied with the city’s codes. She hired a millworker and worked with the construction and creative teams to ensure fixtures didn’t require long lead times or extensive custom work. Since Glossier expected heavy store traffic, Turner scheduled a painting crew three times a week to repaint all the surfaces being touched.

“We are an Instagram and social media-heavy brand. People who come to our stores are coming for the experience; they take photos and enjoy the environment. So, it is important that all of the i’s are dotted and the t’s crossed,” Turner explained.

Getting a cleaning crew proved to be one of the most difficult tasks. Vendors usually want a long-term relationship, and that’s not going to happen with a store open for a limited time. That makes it more difficult to negotiate favorable terms. “Cleaning is often a line item people think they can pinch, but it’s actually one that needs to be given more wiggle room with a pop-up,” Turner said. 

Once the Chicago pop-up closed, Turner’s team cleared out and cleaned the space. After removing all the product, they took inventory and stored the equipment and materials that will be used for future pop-up locations and disposed of the rest. 

Management Tips

In 2017, Branded Group worked on fewer than 40 pop-ups for its clients, but in 2018 they were involved in more than 100 of the short-term shops.

“The number of pop-ups has been dramatically increasing each year, and we don’t expect them to go away any time soon,” Sanchez said. “We’ve had to create a pop-up-dedicated team to manage the volume.” They’ve also developed a checklist to help FMs determine what needs to be done and who will do it. 

Sanchez and Turner offer these recommendations for managing pop-up facilities:

• If possible, be included in the pop-up site selection process. Facilities management input can help reduce problems and improve maintenance outcomes.  
• Once the site has been selected, ask for detailed information about the condition of the space and what it should look like. Share this with vendors as soon as possible.
• Decide early in the process who will do what. Will your department contract with various vendors for making repairs, painting, janitorial services, etc.? Or will you work with a firm that provides these services?
• Get bids from multiple vendors to determine a realistic project budget. Don’t expect definitive prices until you can provide details about the space. 
• Develop a good relationship with the owner or manager of the space. Understand their requirements before you begin executing your plans or bringing people in. For example, do janitorial staff and service workers have to be approved or cleared before they can come to the property to perform their work?
• Hire a cleaning vendor as soon as possible to allow time to identify a good, dependable crew for your pop-up shop. Don’t expect bargain prices for a short-term job.
• Look ahead to close-out. Who will be in charge of emptying the space? Are fixtures going to another store, going into storage or will they need to be disposed of?

While it can be challenging to transform an unused space into an attractive pop-up shop, facility managers are key in ensuring this short-term store successfully fulfills its mission.

By Maggie Callahan 

A trip to Nike’s newly opened flagship on Fifth Avenue in New York City is a futuristic, tech-immersive experience. Covering six floors, the almost 50,000-square-foot store features interactive displays, an instant checkout option and mannequins with scannable QR codes, allowing shoppers to quickly zero in on the details of the shoes or jacket they covet. 

This unique trend of experiential retail has been growing as retailers search for creative incentives to get shoppers off their computers and into brick-and-mortar stores. And while this experience creates excitement for the shopper, it also brings a new depth to the facilities manager’s role. Shawn Browning, a Territory Facility Manager for Nike, was deeply involved with the newest store since its planning stages began almost three years ago. She was part  of Nike’s special team dedicated to the creation of this store, which opened in mid-November 2018. 

Browning said that the new experiential retail does not necessarily give the facilities managers new roles, but the current jobs all become a bit more elaborate and bring new considerations.

“The focus of the facilities managers will be on implementing, executing and maintaining experiential elements of retail stores,” she said. “We have new partnerships, new opportunities and new learning to do.” 

New Considerations

For example, a lot of the technology in Nike’s new store is digital — like large monitors and large screens showing commercials and videos, new computer systems, iPads and other touch screens — and this brings new electrical considerations, Browning said. The tech also generates a lot of heat, so new HVAC questions have to be asked. 

“We have to compensate with additional cooling and ventilation to keep that beautiful, innovative and engaging digital equipment operational when we need it,” she said. 

Experiential retail may include more state-of-the-art store fixtures, which can also be more complex to maintain. Browning dealt with this firsthand when she was learning about the foam seating option chosen for the Fifth Avenue store.

“It’s very comfortable, very innovative and cool to look at, but we found out through conversations with many vendors and team members that we had to special order a cleaning product from Sweden to clean the seating,” she added. 

Crucial Vendor Relationships

Ensuring a smooth operation before and after opening comes down to frequent communication with vendors, especially because the web of vendor relationships is more complex with experiential retail. 

“It’s exciting, but it’s concerning,” she said. “There are more new vendor relationships in this Nike store than at any other 100 stores in North America put together. So, I flew out to meet vendors face-to-face and to make eye contact with them. I wanted them to understand how important our relationship is going to be, the impact they make and the importance of our communication.”

Rethinking the Budget

Because of this store’s high profile and high visibility status — with planned appearances by athletes and other celebrities — Browning increased the budget on the preventative maintenance side. 

“It has the most robust, most thorough preventative maintenance plan — from HVAC, to vertical transportation, to janitorial,” she said. “I’m trying to get to things before they become an issue.” 

Experiential Experience

Browning offered a few tips for any FM involved in the launch of an experiential store: 

Immediately begin communicating with all team leaders, especially the design team. “Depending on how much time you have, schedule weekly or monthly meetings with the team,” she said. And make sure you know your audience. “If I’m talking to designers, I’m going to come with pictures and a PowerPoint to get in front of them and provide pictorial communication.” 

Contact vendors early and often. “Send an introduction email and give them your expectations, and then, ideally, meet them on-site. Connect the manufacturers and designers with the vendors who will be maintaining the fixture in the long-term, and make sure they understand the importance of the partnership,” she said. Also, anticipate any questions, like what cleaning supplies to use, the frequency of cleaning or what not to do. “Set them up for success,” Browning said. “It makes them look good, makes me look good, and, most importantly, our store’s team and our product looks good.”

Keep a sense of humor. “Try to not let things get to you, and try to see things from another point of view,” she added. “As long as I’m trying to communicate effectively to my audience, we’ll all be a success.” 

This forward thinking by FMs will be integral for this retail trend. While a beautiful design is an important start, implementing the designs and ensuring these retail experiences stay up, running and successful in any store will not be possible without FMs. 

Top author, presenter and motivational speaker will keynote PRSM2019 

Anyone striving for motivation in their professional or personal life can expect to be kicked into gear when motivational speaker Mel Robbins delivers the keynote address at PRSM2019. Her method for ending procrastination has become a world-wide phenomenon and has helped people across the globe take ownership of their lives and turn their dreams into realities.

Robbins will give attendees inside details from her latest book, The 5 Second Rule. She will explain how to set aside the fears and anxieties that lead to procrastination in order to take full advantage of what she calls “push moments” — windows of five seconds one has to turn a thought into an action. Robbins states that if you don’t act within those first five seconds, your brain instinctively tends to “kill” the idea, making the odds of truly acting on that idea drop significantly. According to Robbins, “Hesitation is the kiss of death. You might hesitate for just a nanosecond, but that’s all it takes. That one small hesitation triggers a mental system that’s designed to stop you.” By understanding this mental trap, one is able to move past insecurities and doubts to realize both short-term and long-term goals. 

At her keynote session, PRSM2019 attendees can expect tips on making seemingly insurmountable obstacles much more manageable, just by listening to your own thoughts and making moves to enact them immediately. 

Robbins is recognizable from her appearances as a contributor on CNN, her TEDx talks and her work as an accomplished writer. The 5 Second Rule has become an international best-seller, having been named the top audiobook on Audible, as well as the sixth most read book on Amazon in 2017. Robbins has worked in several fields — as a criminal defense attorney, an accomplished retail and technology entrepreneur and a host of several television shows. She attended Dartmouth University as an undergraduate and received her law degree from Boston College. 

Twitter: @melrobbins

Facebook: facebook.com/melrobbins

Website: melrobbins.com

Cannabis retailer MedMen is leading the way in facilities management for the emerging trade

By Scott Mason

Although not yet federally legal, as it stands now, 33 states have passed pro-marijuana legislation, including 10 of those approving recreational use for adults. With wider access and availability to marijuana, the demand has grown significantly for cannabis retail facilities. Enter MedMen, a now publicly traded marijuana retailer based in Culver City, California. With stores in California, Nevada and New York, and store-front operations soon to open in Florida, MedMen is poised to become one of the retail giants in the cannabis business. 

As the industry evolves, so too does the need for best practices focused on facilities management. Andres Ott, Facilities Manager at MedMen, has played a key role in fulfilling the company’s mission to provide a great customer experience. “My FM background includes experience in: residential, commercial, food distribution, global facilities and national retail. When MedMen decided to expand their retail presence and hire a facilities leader, I went all in and I haven’t looked back,” Ott said. 

State by state

Since the industry is relatively new, and somewhat segmented based on state-to-state code variances, MedMen employees are often tasked with navigating the laws and regulations in the city or state in which they operate. Ott’s job, however, is to ease the burden by taking worries about facilities off their plates. “Although each state — and even some cities — have different regulations, those slight variations don’t necessarily change what my role is within the portfolio. My job is to minimize the time spent by our retail and hospitality partners focusing on the facility and allow them to provide world-class service to our customers,” Ott said. “The only difference for me is understanding how regulations have changed from state-to-state or city-to-city and ensure we do not have any glaring concerns or issues that would cause a store to get shut down. Our compliance team is very strong and professional and are great partners in ensuring MedMen is compliant across the chain.”

When asked about the future of the cannabis industry, Ott said that expansion to other states is on the horizon. “As the future continues to develop, I see a continued expansion into states that provide their constituents adult use options in addition to the medical aspect that allows for patients to seek alternative medications for many ailments including getting away from opioids to manage pain,” Ott explained. “Every day you hear or read in the news of additional states considering adult use initiatives. I see cannabis expanding into more states as the months go by and full federalization within the next few years.” 

Looking forward 

As we track the future of the cannabis industry, facilities management will play a big role in the success or failure of these new retail stores. Andres Ott and MedMen understand this and will continue to make an impact in evolving not only the cannabis market, but the retail market as a whole. 

Sidebar: Five Tips for FMs Looking to Add Cannabis to Retail Lineups

“As states continue to legalize cannabis sales for tax generating purposes, the idea of integrating it into other retail environments may be enticing to retailers. However, with the regulatory aspect cannabis contains currently, I do not see it being distributed like alcohol or cigarettes,” Ott predicted. He offered five suggestions for FMs that may be looking to add cannabis sales to their product lineup in the future:

➊ Ensure you understand the compliance aspects of cannabis and what your facilities need to do to be compliant.

➋ Partner with your retail team to understand their strategy and streamline support.

➌ Define a facility request. With compliance pressure, facilities tend to be the catch-all and should involve other partners to ensure everyone understands their responsibilities.

➍ Have a robust software-as-a-service (SaaS) platform that can grow, while being nimble with changes or adjustments that occur within your realm.

➎ Be prepared to take on everything. Define the needs of every partner involved.

 

Take a Cannabis Tour

As cannabis has become legal in Colorado and other states, a new vertical retail market sector has emerged. Come join us as we take a closer look at the growing retail cannabis industry. This 2.5-hour tour will visit two dispensaries and one cannabis grow facility. The tour will focus on retail operations and will be led by a team of guides who have an extensive background in cannabis retail, general retail operations, as budtenders, store management and territory managers. They will share insights into grow operations, MIPs (marijuana infused products) and much more.

By attending this session, you will:

• Learn about marijuana facilities codes, standards and managing hazards.

• Comprehend the basics of cannabis law and regulations.

• Evaluate the difference in medical versus recreational use.

• Discuss facilities management challenges for dispensaries and grow facilities.

Monday, April 29, 2019

8:00 A.M.-11:00 A.M., MST

Cannabis Dispensary & Grow Facility Tour – $125

Register at prsmnational.com

Must be at least 21 years of age and provide a valid U.S. issued ID or passport at the tour check in. Includes continental breakfast and transportation.

Mixed-use developments promise unique opportunities for retail tenants — and unique challenges for retail facility managers

By Matt Alderton

The typical Walmart Supercenter feels like a small, self-contained city. A modern-day Main Street, it has everything consumers need to live a contemporary American life, including a restaurant at which to eat lunch, groceries with which to make dinner, an oil change for your car, new school clothes for the kids and seasonal flu shots from a nurse. There’s even tax-return help at tax time. It’s what has made Walmart so popular and powerful — if you need it, it has it.

And yet, nearly 70 years after Sam Walton opened his first five-and-dime in Bentonville, Arkansas, there are still things you can’t get at Walmart, or most other retailers, for that matter. Things like experiences and community, which consumers desperately want but can’t always access.

Enter the “Walmart Town Center.”

Unveiled in October 2018, Walmart Town Center is a new concept that will transform massive, underutilized parking lots at select Walmart Supercenters into walkable community centers that host farmers markets, festivals and other community gatherings. Along with third-party retailers and restaurants to which Walmart will lease space, they’ll include a wealth of experiential amenities, such as: food halls and food trucks; entertainment options like bowling alleys and movie theaters; sports offerings like driving ranges, skate parks, basketball courts and ice skating rinks; transit services like bike rentals; and outdoor community spaces like parks, playgrounds and jogging paths.

It’s a bold move, but it’s just one piece in a larger industry puzzle: the transition from traditional malls and shopping centers to new mixed-use developments.

“Overall, there is a trend toward diversifying the experiences and offerings in and around retail,” said Mark Sullivan, Senior Managing Director at CBRE, a commercial real estate services and investment firm. “In larger developments, the trend is toward mixed uses that enable all ships to rise given the synergy and proximity of complementary goods and services.”

For the business, synergy is savvy. For retail facility managers, however, mixed-use can be a mixed bag. In order to be effective in mixed-use developments, they must embrace a new way of working that’s holistic and communal — like the communities themselves.

Great Expectations

To succeed in retail, one must know his or her product intimately. That’s as true for facility managers as it is for salespeople. In the case of mixed-use developments, the former must realize their product isn’t a facility at all; rather, it’s the lifestyle the facility affords.

“With mixed-use centers, you’re dealing with folks who are walking by every single day, either because they work there in non-retail spaces or because they live there,” explained Matt Little, Regional Area Manager, Store Development, at Gap, Inc. “If you’re one of those people, you’re paying rent, you’re buying food, you’re buying clothes — all in one spot. You’re spending a lot of money at that property, so you have high standards for how you want that community to look.”

In some cases, those high standards manifest in the form of increased maintenance expectations. “Mixed-use centers are much more detail-oriented and much more cognizant of their appearance, so there tends to be more accountability when it comes to maintaining storefronts,” Little continued. “That may mean increased cleaning services, for example, or increased work-order calls for lights that are out or signs that are not fully lit.”

Because they’re typically spelled out clearly in the store’s lease, facility managers can manage increased requirements by getting ahead of them. “It’s being proactive,” Little said. “You might have a dedicated route, for example, where you change light bulbs on a schedule versus waiting for them to go out. Or you might educate store staff to open a work order as soon as they identify an issue instead of waiting for it to get bigger.”

The latter is especially important. “It’s going to take a little extra work from the store personnel to help us out as far as keeping things clean on a daily basis so that it doesn’t become a larger expense down the road,” Little continued. “It’s a mindset shift from having facilities take care of everything for you, to store personnel taking a little more ownership of the store in terms of its maintenance.”

Respecting the Rules

Often, covenants in mixed-use developments encompass not only the appearance of the community, but also access to it.

“The most obvious challenge in many of these locations is in trades and other retail vendors gaining access to service retail space equipment through the landlord,” Sullivan said. “There are often rules for parking commercial vehicles, gaining access to rooftops, maintenance windows for project work and deliveries, etc., and all must be integrated into the retailer’s facilities management operation.”

Mixed-use landlords typically have good reasons for restricting access, Sullivan explained. “The most obvious example is roofs,” he said. “Often, roofs have long-term warranties of 20 years. If a retailer’s HVAC supplier damages the roof with additional penetrations without following proper procedures — working with the warranty ‘owner’ roof contractor who is certified on the roof system — warranties can be voided.”

To achieve equilibrium between vendors who need access and landlords who want to restrict it, consider leveraging a computerized maintenance management system (CMMS) to align maintenance activities with community policies and procedures. “Computerized maintenance management systems, often employed by retailers or their facilities-management service providers, effectively manage … details in work rules at the site level, take the lease requirements into account, help prevent retailers from breaching rules and keep maintenance on time,” Sullivan explained. “Modern CMMS systems can also manage services that have warranty-related restrictions and keep retailers and landlords organized to minimize breaches.”

Environmental Imperatives

The lifestyle mixed-use centers market to their tenants is often a sustainable one. Facility managers working in mixed-use developments should therefore brush up on environmentally friendly maintenance techniques, Sullivan explained.

“For mixed-use facilities with LEED and energy-efficiency goals or desires, keeping the community aligned with LEED and energy requirements will take not only a deep understanding, but also communication and a collaborative approach. A cooperative community will be vital to making sure the overall health of the mixed-use campus is sustained,” he said. “That said, a landlord’s sustainability requirements will be dictated within the lease and specified.”

It’s up to facility managers to communicate those requirements to anyone who needs to know them. “It’s important these requirements are shared in work orders dispatched to suppliers so the suppliers can be cognizant of the rules, but also so they are prepared to bring the right tools and method of procedure with them,” Sullivan continued. He also recommends ongoing education for facilities managers who lack sustainability savvy. “It … poses a challenge to find facilities and maintenance talent that are well-versed in a variety of different systems aimed to achieve these environmental standards. Education and hands-on training are the best ways to ensure systems and programs installed operate as intended during occupancy.”

Conquering Communication

Not every mixed-use community has sustainability requirements. By definition, however, all of them have diverse stakeholder groups that complicate the maintenance ecosystem. For that reason, mixed-use developments’ greatest challenge — and best solution — is communication.

“You’re going to have the same facility issues in a mixed-use facility that you have anywhere else. The difference is: Now you’re surrounded by different types of tenants … whose needs you have to take into consideration,” said Bill Schaphorst, Vice President of Business Development at facility maintenance and repair company MaintenX International.

Little agreed, “Instead of other retailers with the same business hours, our neighbors in these spaces are doctor’s offices and real estate offices that close a lot earlier than we do; restaurants and bars that are open very late at night; or even residential tenants who live directly above or adjacent to the store. So we often have noise restrictions during certain hours and curfews we have to work around.”

Schaphorst, for example, recalls a retail client that shared a mixed-use development with a senior-living facility. The client wanted to perform an electrical upgrade, but doing so required shutting down electrical service. “The retail space wanted to stay open during the day, but the senior-living folks didn’t want to be shut down at night because there was nobody there to take care of people in case of an emergency,” Schaphorst explained. “It took us six months to figure out how to schedule it properly, but we finally figured out a way to get the project done by working from 6 A.M. to 9 A.M.”

The project was completed thanks to successful communication between numerous stakeholders, including the retailer, the senior-living facility, the mixed-use landlord and the electric utility company.

“Without adequate communication, the process breaks down and costs the retailer hard dollars through extra time onsite,” Sullivan said.

An effective communications plan outlines what you need to communicate, when, how, with what frequency and to whom.

The latter is especially important. “The best thing to do is to know who your business partners are [in the mixed-use center],” Little said. “Get in touch and build relationships with the property managers there so you understand what their requirements and procedures are. It makes the whole process a lot smoother.”

It’s a good reminder: Retail’s face may change to include new formats like mixed-use, but its heart will forever stay the same.

“This is a relationship business,” Little concluded. “The stronger your relationships, the easier it’s going to be for you to do what you need to do for your store” — wherever it’s located.

Mixed-use developments are a new take on an age-old idea  

By Matt Alderton

In New York City, dreams really do come true. Not only for aspiring actors, chefs, models and musicians, but also for ambitious real estate developers. Since at least 1956, they’ve been angling to develop Hudson Yards, a blighted area on the West Side of Manhattan whose location on the banks of the Hudson River makes it the ideal canvas for a real estate renaissance.

For more than half a century, developers tried to replace the rusty rail yards, for which Hudson Yards was known, with shiny new skyscrapers. And for more than half a century, they failed. Their fortunes finally changed, however, in 2005, when the city rezoned Hudson Yards and created the Hudson Yards Special District. Seven years later, in 2012, ground broke on the largest private development in U.S. history. Scheduled for completion in 2024, the $15-billion, 26-acre Hudson Yards project will comprise 20 million square feet of offices, apartments and retail outlets, much of which will be built atop two “platforms” constructed over the existing rail yards. The result: a brand-new neighborhood that will include more than 100 new shops and restaurants, approximately 5,000 new residences, 14 acres of public open space, a 750-seat public school, a 200-room “fitness hotel” and a six-story cultural center.

“Hudson Yards will be the new heart of New York City,” said Stephen Ross, Founder and Chairman of developer Related Companies, at the project’s groundbreaking.

Although Hudson Yards is special, it’s not unique. In cities and suburbs across the country, similar developments are popping up like plants sprouting in spring. They’re so prevalent, in fact, that PRSM included them in its “2019 Trends Report” as one of the top retail trends impacting retail facilities management in 2019. Known as “mixed-use” developments, they amalgamate diverse and disparate real estate types — for example, residential, office and retail — within a single, pedestrianized footprint.

“It comes down to the notion of integration,” said Jerry Hoffman, CEO of Hoffman Strategy Group, a boutique, national real estate advisory firm. “These are manufactured communities, but over time they become really authentic places where people live, work and play.”

 

For the people who occupy them, the product of mixed-use developments isn’t just new real estate, Hoffman explained; it’s a new lifestyle. For that reason, mixed-use developments often are called “lifestyle centers.”

“There has been a fundamental shift in consumer lifestyles that has been occurring for some time in the United States,” Hoffman continued. “Instead of the purely transactional relationship provided by malls and shopping centers, the most recent generation of consumers prefers a more unique, curated mix of merchandise in a more vibrant urban setting.” Hoffman hypothesized numerous drivers of this shift. One is e-commerce. Because consumers can transact so easily online, he said, they’re demanding more experiential environments offline.

Another driver is demographics. The largest generations in the United States are the baby boomers and the millennials. Because the former are aging, they are less mobile and want to live in accessible communities with more amenities and less upkeep. The latter, meanwhile, are eschewing cars and embracing the environment, both of which explain their interest in self-contained communities that are simultaneously convenient and sustainable. This is especially true in suburban markets that previously lacked them, like Alpharetta, Georgia, home to Avalon, an 86-acre mixed-use community that includes more than 500,000 square feet of retail, a 12-screen movie theater, a full-service hotel, Class A office, single-family residences and luxury rental homes.

“Mixed-use developments are creating urban villages in suburban markets,” Hoffman observed, who said mixed-use has permanently altered the retail landscape in numerous important ways — both downtown and in the suburbs. Consider, for example, the evolution of retail anchors.

“The retail component of mixed-use centers is going to look a lot different than the retail we’re used to in malls and shopping centers,” Hoffman said. “Instead of department stores, you’re going to have new anchors that could include a health center or a boutique hotel, for example, with a mix of entertainment and food — a movie theater, a food hall or chef-driven restaurants.”

Retailers also can expect the mixed-use philosophy to migrate inside their stores in the form of multi-use retail. In 2016, for instance, Barnes & Noble introduced Barnes & Noble Kitchen, which is part restaurant and part bookstore. And in 2018, Office Depot introduced Workonomy Hub, an in-store coworking space for remote workers.

It’s all very innovative — but it isn’t necessarily new. Just look at the agoras of ancient Greece. “An agora was an open-air market where people lived and worked and shopped,” Hoffman concluded. “Mixed-use is a new development, but its based on some pretty ancient design templates.”