They say what happens in Vegas stays in Vegas, but don’t tell that to the 30,000-plus who attended last week’s International Council of Shopping Center’s RECon show.
They want the exact opposite to occur. They hope what happened in Vegas spreads across the country in the form of new, long-lasting relationships that lead to done deals. Brokers, developers and money sources flock to the Las Vegas Convention Center each May in hopes of bringing back business that keeps them busy for the rest of the year.
ICSC touts its RECon show as “The Global Retail Real Estate Convention.” It is, in fact, the largest gathering of its type. Though ICSC describes the event as three days of dealmaking, professional development workshops and networking, it’s really a misconception to think that hundreds of leases go from zero to done in 72 hours.
“It’s not about getting a deal done tomorrow,” said Brandon Hoffman, a senior associate at New York-based Ashkenazy Acquisition Corp. “It’s about setting yourself up to form a real friendship, a relationship that lasts and ultimately leads to doing business together.”
This year, Hoffman hosted meetings at Ashkenazy’s booth, and participated in a panel that focused on pop-up shops and how landlords are becoming more flexible to accommodate them and startup businesses. “We talk deals, partnerships and leasing across our portfolio [which includes Union Station in Washington, D.C., Faneuil Hall in Boston and Bayside Marketplace in Miami],” he told CoStar News. “It’s busy – with meetings every 30 minutes – but they’re not throw-away meetings.”
Attendance at this year’s RECon was down slightly, to 31,195, and some retailers and developers scaled back their booths. Charlie Hendon, whose epic Hendon Rocks parties with celebratory entertainers are not to be missed, decided not to throw his bash. He says it will return in 2019. Despite the lower attendance, key executives told CoStar they will be back. The show’s too vital to miss.
“There’s a lot of credibility to be gained at the largest national conference for what we do,” said Mike Lagazo, a vice president in SRS Real Estate Partners’ San Diego office. “I hate to use a cliché, but RECon takes our relationships to the next level. Even if you’ve been on conference calls with people and worked through rounds of LOIs [letters of intent] and other business over the phone, meeting face to face trumps that.”
Lagazo said the notion that brokers, developers and owners come to Vegas expecting to start and complete major deals is off base. Large commercial real estate transactions take time and several rounds of negotiations because millions of dollars are at stake. When Equinox Fitness and Seritage Growth Properties issued a media alert under the header, “Equinox & Seritage to Pen Deal at ICSC RECon” during the show, Lagazo said the two clearly had done most of the legwork weeks or months in advance.
The deal centered on Equinox and Seritage transforming a former Sears store in La Jolla, CA, to an upscale shopping and dining center with entertainment offerings as well. Lagazo knows the Sears site well – it’s in his backyard, and he’s toured the property. Converting the former Sears, which is broken into receiving areas, shopping space and storage rooms, will take much work, he said.
“I’ve seen several pro formas for national fitness chains, and a $300,000 or $500,000 swing in build-out costs can implode a pro forma,” he said. “These delicate lease points are negotiated over time. Too much is at stake otherwise.”
Libby Lassiter of Bayer Properties, says ICSC’s RECon show is a vital part of her company’s annual business plan.
Looking forward to 2019, Libby Lassiter of Bayer Properties said having a sizable presence in Vegas still matters – a lot. As executive vice president of development and leasing at the Birmingham, AL-based development firm, Lassiter oversees Bayer’s high-profile projects including The Summit at Fritz Farm in Lexington, KY, and The Summit Reno-Lake Tahoe and The Pizitz in the company’s hometown.
“This is still a very important convention for Bayer Properties,” she said from inside the closed-door meeting room in Bayer’s booth.
Lassiter said 90 percent of her meetings at RECon are gatherings with executives and key representatives who can move deals forward. On the flipside, the younger members of her leasing team spend about 50 percent of their time hosting new business meetings to establish first-time relationships.
If anything, Bayer will increase its presence at and commitment to RECon, Lassiter said.
“Our team hosts hundreds of meetings. It would take a lot more time if we did this on an airplane. It’s so much harder on the phone,” she said. “This is a supplement to that. It’s extremely important, and that won’t change.”