Memphis and its environs have been amping up commercial developments in recent years. It looked like nothing would stop the boom until 2020 came along and flipped everything over. In a matter of months, the world experienced a pandemic, an economic collapse, and a growing social justice movement. But dont underestimate momentum and hope. As of this writing, the stock market is humming merrily along and the builders are still building.

We take a look at a couple of local commercial development projects that are moving along, undeterred by the upheaval. And we examine whats been going on in the hospitality industry, which Memphis relies on heavily and did take a big hit.

By Jon W. Sparks

Gary Prosterman likes to get into his projects quietly. Keep your head down and do your thing, he says.

And so its been with his development in the Edge District. His Development Services Group (DSG) started acquiring properties there five years ago quietly and has been taking it a step at a time, looking for the best solutions to make the neighborhood as vital as possible.

Prosterman is quick to acknowledge that he wasnt the one first on the scene with big ideas. There were pioneers there even before we were, he says. Pinkney Herberts Marshall Arts. Mike Todds neighborhood association, calling the area The Heart of Memphis, the Edge of Downtown. The High Cotton Brewing Company. The Edge Alley coffee shop and restaurant.

The area extends roughly from Sun Studio on the east end to AutoZone Park on the west, and Jefferson Avenue to the north and Beale Street to the south. The street configurations were long ago determined by railroads and rail spurs, most gone now although one still runs up next to the old Memphis Publishing Company building that used to deliver huge rolls of newsprint to The Commercial Appeal and the Memphis Press-Scimitar.

In the middle of the twentieth century, the Edge was packed with automobile dealerships. Elvis Presley got his start in the neighborhood at Sun, and spent many dollars at the nearby Cadillac dealer.

But the Edge has been looking for a new identity and some people, such as Todd and Prosterman, see how it can deliver as a residential, commercial, retail, and cultural center.

Were probably most proud that there are so many projects beyond the pieces of property that weve acquired that have developed and are continuing to develop, Prosterman says. Already in the neighborhood are a mix of businesses, including PKM Architects, the Edge Motor Museum, Chef Tams Underground Caf, Karen Adams Designs, Holliday Flowers. And looming large is the old Memphis Publishing Company building that recently underwent a $51 million build-out into a hospital facility for potential COVID-19 patients.

But Prostermans plans are doing much to define the area. One of his most significant and earliest contributions was the Orion Federal Credit Union headquarters where the old Wonder Bread Bakery had been for years.

We had acquired the entire bakery and intended to do adaptive reuse of the part that we thought was architecturally significant, he says. The idea was to develop it for Orion and be the landlord, but to accommodate the credit unions vision would have meant charging rent well above market, so it was agreed that Orion would buy it. It frankly exceeded everyones expectations, Prosterman says. Its probably the coolest office space in Memphis.

The Rise the nearby 199-unit apartment building is complete along with the 481-space parking deck. Although most leasing tours are virtual due to the pandemic, the leasing has gone better than expected and DSG hopes it will be fully occupied by fall. The tenant breakdown is about 60 percent to 70 percent working or studying at one of the nearby healthcare facilities, and the rest, as Prosterman says, see it as a cool place to live. He calls it a very current high-end suburban type property but in the middle of the city with a club room, fitness center, and swimming pool that he says is rare for this part of town.

Across the street from Orion is LEO Events, which wanted to own its space. LEO is on the ground floor and Montgomery Martin general contractors has an office on the second floor.

What may be the most intriguing part of the development is what will be the Ravine Park. Its an abandoned rail easement that runs from about Madison and Lauderdale south to Union Avenue. We acquired the old Glass Factory building [on Madison], Prosterman says, which included the easement. Construction has begun on converting the easement into a public park.

The 30,000-square-foot Glass Factory building will become a brewery and tap room for Memphis Made Brewing Company. This will be in addition to its plant in the Cooper-Young area that it will keep.

The Memphis Cycle Shop building sits on Monroe at Lauderdale. Its not in good shape but has fine architecture and DSG is looking to list it on the National Register of Historic Places and develop it with opportunity zone funds. Prosterman hopes to get that project under way in the fourth quarter of this year.

Throughout the year, hes had to deal with the pandemic in one fashion or another. We definitely have hit a bump in the road with COVID, Prosterman says, noting that the neighborhood wont reach full potential until what hes doing is supplemented by more retail, restaurants, coffee shops, and other such enterprises now most severely affected by the crisis. He, however, is able to continue with what hes been working on in the Edge for five years.

Were going to keep doing what were doing, he says. Were fortunate to have the capital partners that we have and fortunate that Im not at the beginning of my career, or we wouldnt have the staying power to keep going.

By Samuel X. Cicci

The coronavirus has wrought havoc across the country, but the sucker punch delivered to the hospitality industry hit especially hard. In the month of May, we ran a 17 percent occupancy, says Wayne Tabor, president of the Metropolitan Memphis Hotel & Lodging Association (MMHLA). That month normally runs up in the 80s.

Downtown Memphis has borne the brunt of the hospitality storm. With tourism, meetings, and conventions all significantly reduced, large hotels have a surplus of space, and few visitors to fill it. Smaller economy and mid-scale hotels farther east have been performing better, but the overall numbers are still low. The percentages have been creeping back up, however, with a few twists along the way.

At the end of June, hotel occupancy rates sat at around 50 percent still not great, but significantly better than nearby markets like Nashville and New Orleans. According to Tabor, the uptick came when Beale Street and restaurants were allowed to reopen. Demand has started building back up a little bit, says Tabor. But Downtown, in June and July, we need to be at 80 percent.

I think were in a plateau period right now, Tabor said in an interview in mid-July. We started trending upward, but with everything going on, its difficult. Im trying to make sure we stay in business, but I dont want anyone to catch the virus.

With the number of Shelby County cases surging in recent weeks, as of this writing (mid-July), the path back to where hotels need to be might be further away than anticipated. With bars shuttered once again in July and restaurants at a reduced capacity, hotels look to an influx of small meetings.

In Phase Two [of the reopening stages], were only allowed to host meetings of up to 50 people, Tabor says. Youre not going to see a lot of meetings with only 50 people. Phase Three will take us up to 200, and thats what well need to start getting back to where we need to be.

Hospitality has one major advantage: a long history of innovative sanitation practices. Cleaning and sanitation is our business, says Tabor. And that holds whether were in a pandemic or not. Even before this came along, we were always looking at ways to keep people safe from everyday viruses and sicknesses.

Along with cleaning procedures, some safety strategies may see an accelerated implementation. Most major brands were already experimenting with these innovations, says Tabor, but something visitors should get used to seeing is an app that can handle most guest functions: Think mobile check-in, scanning a phone to open a door, or settling the bill remotely. Other approaches rehaul the mini-fridge concept. Instead of snacks and liquor in their rooms, guests now have a full complement of sanitation products. At economy hotels, breakfast buffets are replaced by pre-packaged goods. If a tourist has concerns about any aspect of the hospitality experience, its a safe bet that hotels will have come up with a countermeasure or alternative to keep the experience as safe as possible.

Downtown has been the strongest market for Memphis traditionally, and Tabor expects it to get back to the top. I dont know if well have that V-shaped recovery we want, but well get through it.

By Samuel X. Cicci

When the pandemic hit, Carlisle Corp.s One Beale Project found itself well-poised to weather the storm. The 2019 trade tariffs on China had caused the developer to explore alternate supply chain options for necessary materials, so by the time international industry ground to a halt earlier this year, One Beale was in fine shape. The projects first phase, the 232-room luxury apartments, is ahead of schedule, with pre-leasing expected to begin this fall. Meanwhile, the 227-room Hyatt Centric at Beale and Front is set to open in February 2021.

We were in the process of moving and sourcing a lot of stuff pre-COVID that became very beneficial when COVID did hit, says CEO Chance Carlisle. When China shut down for its new year [in February], we were worried that they werent going to re-open. Meanwhile, our partners in Hyatt also have an extensive hospitality footprint, so we were attuned to what was going on and could minimize those effects on our process.

And with construction green-lit as essential when the lockdown began in March, Carlisle Corp. went full steam ahead. It was a boon to this economy and our project specifically, says Carlisle. We were able to actually accelerate some of our schedules as other parts of the country shut down.

Carlisle Corp. will soon announce phase three of the One Beale project, a yet-unnamed boutique hotel. In the meantime, the developer is also putting plans together for the old Nylon Net building at 7 Vance Ave. The proposed apartments would leave Carlisle Corp.s fingerprints all over the riverfront.

Weve always considered the Memphis waterfront to be an untapped asset, for everything from public use to generating tourism taxes says Carlisle. Looking at the One Beale footprint, 7 Vance, and the Kemmons Wilson headquarters [the old Spaghetti Warehouse at 40 West Huling], there are five great parcels to develop. You can really build a close connection between Tom Lee Park and the rest of Downtown, and we see it as a natural extension to continue the residential and hospitality density there.

Continued here:
Commercial Development in the Age of COVID - Memphis Magazine

The action to rename Rebel Drive came during the Aug. 18 Kyle City Council meeting. (Screenshot courtesy city of Kyle)

The action came during the Aug. 18 council meeting, and the ordinance from the city says officials unanimously agree to the change.

"Names should be appropriate to the particular public place by reflecting native wildlife, history, flora, fauna, geographic area, natural or geological features, or honoring individuals or families significant to Kyle as determined by council, the ordinance states.

The road runs north to south in Kyle, starting at FM 2770 and ending at West Center Street, and the resolution states address changes along the street will be effective immediately.

Some of the changes that will now need to be put in place as part of the process include notifying the postmaster, informing business and property owners occupying the street, issuing a press release and informing Hays Central Appraisal District.

City information states the local post office needs 30 days to process the address change and mail will be delivered to both street names for one year.

Kyle Mayor Travis Mitchell said it seems like the right time to bring about a change to the street's name, and said that a perfect replacement could be to name the road Fajita Drive.

That seemed appropriate, Mitchell said, especially considering that earlier in the Aug. 18 meeting the city of Kyle voted to make Aug. 18 National Fajita Day after Juan Antonio Sonny Falcn, who is credited with popularizing the fajita by introducing it in 1969 in Kyle, according to city information.

As part of the process of changing the name, council also discussed what might be done about business owners and residents who might accrue unwanted costs associated with the name change.

But ultimately, council was unanimous in its desire to meet what they described a cultural moment with a locally relevant gesture.

"I think it's absolutely beautiful that we bring this up on National Fajita Day," District 5 Council Member Rick Koch said.

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Rebel Drive in Kyle to be renamed Fajita Drive in support of 'community camaraderie' - Community Impact Newspaper

Amidst it all on this summer afternoon: a blue tent where the city health department offered walk-up coronavirus testing, free to all comers.

This seaside city has been having a moment, with apartment buildings sprouting along its famous beach just a 14-minute ride from downtown Boston and renting at a fraction of the price.

Reveres revival was well underway until COVID-19, which has hit it as hard as almost anyplace else in the state, wreaking health and economic havoc in a city thats home to many immigrants and service industry workers. When and how it emerges from the crisis will provide a measure of the new Reveres resiliency, and how well it can serve everyone from longtime lower-income residents to the more-affluent newcomers.

At this point, its really important for us to keep our foot on the gas, said Mayor Brian Arrigo. A lot of the oxygen has been sucked out because of COVID, but we need to keep firing on all cylinders.

Thats not easy to do this summer.

Even as development surges, Revere has been clobbered by COVID-19. Only two cities in Massachusetts, neighboring Chelsea and Lynn, currently have higher infection rates, according to state data. And at 27.6 percent, Reveres unemployment rate in June was second in the state only to Lawrences, reflecting job losses among the huge numbers of residents who work in hotels, restaurants, and other hard-hit service industries.

Helping those people will be essential to any recovery and broader growth for the city, said Wendy Millar-Page, executive director of the Revere Chamber of Commerce.

For years, Revere residents have had a sense the city was on the cusp of change. Suffolk Downs, on the Boston line, was long a front-runner for the casino that ultimately went to Everett. Then it was pitched as a site for Amazons so-called HQ2. Neither mega-project came to pass, but we were winners in losing, said Robert OBrien, the citys director of strategic planning and economic development. Those bids helped Revere catch the eye of builders, and suddenly, he said, the city was no longer hidden in Bostons shadow; it had its own spotlight.

Today, many see revitalization being realized in the strip of glimmering new apartment buildings that dot the waterfront, and in an Amazon warehouse that opened in July in the former Necco factory.

But to some, these changes are not entirely new. They say Reveres promising future is simply an echo of its past.

Celebrated as the first public beach in America, Revere Beach, with its noisy arcades, amusement rides, and famous fried food, served as a cheap and easy escape from downtown Boston for over a century. But gradually, the good times faded. The roller coaster came down, and the dance halls closed. The summer crowds, once huge, moved on. The destruction caused by the Blizzard of 78 provided a final blow. A handful of beach bars and ice cream stands and the original Kellys Roast Beef serve as reminders of those glory days. So do the pictures of Reveres heyday that hang from the walls of local restaurants, as well as the intricately designed pavilions along the oceanfront promenade that hint at lost grandeur.

But while some people bask in Reveres nostalgia, others have a vision for a future built on its colorful past.

Mayor Arrigo approached me, and at first I was a little turned off about Revere, said Michael Aldi, a Boston restaurateur and developer Arrigo courted to do business in the city. I have family here, and I know what its all about, but it wasnt there yet. But Aldi saw promise in the oceanfront views and decided to take a chance: Last fall, he opened Dryft, the citys first fine-dining restaurant, on the plaza overlooking the beach.

My goal was to bring a Boston-style restaurant to the beach, something theyve never had before, Aldi said. What I look for in a deal is parking, waterfront and, public transportation and this deal had all three.

Aldi plans to open a second restaurant on the Ocean Avenue strip. He believes that more tourism and retail business is on the horizon and wants to get in on the front end of the coming boom. This is the oldest beach in America, he said. It almost reminds me of a New England-style Miami Beach.

Some of this newfound glitz is driven by forces far beyond Revere. As in other lower-cost parts of Greater Boston especially those with good MBTA access newcomers have arrived in Revere in droves as rents have soared in the core of the region. Developers and restaurants and retailers have followed, gradually drawing a wealthier clientele.

That brings opportunity, said Rafael Mares, executive director of Neighborhood Developers, a housing nonprofit that works in Revere and Chelsea. But it also risks pushing out the immigrants and working-class renters who have long called the city home.

The regional housing crisis has made people look in places they didnt look before. Revere is one of them, Mares said. Its like the ocean. We have this high tide thats going up.

One of the biggest waves is forming at Suffolk Downs, where plans for a huge new neighborhood are taking shape. About 40 percent of the vast, now- shuttered horse track is in Revere, and while the permitting has been slow next door in Boston, Revere officials in 2018 quickly approved plans for about 2,400 apartments, retail space, and a cluster of office buildings on the citys section of the site. When its all built years from now the development will boost Reveres commercial tax base by more than 50 percent, said economic development director OBrien, and make room for white-collar jobs on a scale Revere has never seen.

Its a long-term play, said Tom OBrien (no relation to Robert OBrien), managing partner at Suffolk Downs developer, HYM Investment Group. But its one hes confident will long outlast the pandemic.

HYM is just now demolishing the old stables near the MBTAs Beachmont Station. Construction on the first buildings wont start until spring, OBrien said, and by the time they open in 2023 hes hopeful the public health crisis will be just a memory and the Blue Line will again be a pipeline from the heart of Boston.

Were developers, so were always optimistic, he said. We see the bright side. But the bright side has typically worked out.

Still, some worry all this change is too much, too fast. Especially now.

Theres interesting growth happening, and a lot of resistance to the growth, as well, Millar-Page said. Theres a fear that people are going to be pushed out, and where do they go, especially during this COVID time. Where do you go if youre already unemployed or furloughed?

Her answer is to take steps to ensure current inhabitants will be able to stay as Revere evolves. That means reexamining transportation options to help people move around the city. It also means implementing programs to help service workers advance as their industries recover, and capturing some of those office jobs at Suffolk Downs.

It means building hotels, but also creating a tourism infrastructure to lure people who might not know theres a fun beach resort close by Boston, while encouraging new residents to celebrate and patronize the immigrant-owned businesses that have made Revere unusual.

Some of those efforts are underway. The city released a draft master plan at the start of the year, with detailed recommendations for transportation, economic development, and housing. The plan is already providing a framework for recovering from the pandemic, with the city focusing resources on training programs for laid-off workers and allocating cash to help restaurants stay afloat.

Still, Arrigo said, todays circumstances are unprecedented.

Theres no handbook for this, he said. Were just trying to make sure that were planning for and creating opportunities and a high quality of life for every single person in this city.

Tim Logan can be reached at timothy.logan@globe.com. Follow him on Twitter at @bytimlogan. Janelle Nanos can be reached at janelle.nanos@globe.com. Follow her on Twitter @janellenanos.

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Revere was going through a revival before COVID-19. Can it stay on track? - BetaBoston

Parkview Financial announced it has provided a $7.2 million construction loan to GA Views Management, LLC for the completion of The Views at Georgia Avenue, a Class A, 20-unit apartment property. Located at 3557 Georgia Avenue NW in the Park View neighborhood in the northwestern quadrant of Washington, D.C., the six-story property is currently in the framing stage and will be completed in summer 2021.

The 23,000-square-foot (sf) building will include 10 two-bedroom floor plans ranging between 696 sf and 835 sf, and 10 one-bedroom floor plans ranging between 530 sf to 545 sf with ground floor retail space totaling approximately 3,358 sf. In addition to the retail component, amenities for the residences include storage areas of 442 sf in the basement, a rooftop deck totaling of 964 sf, and patio area totaling 600 sf. Each unit will include hardwood flooring and carpeting, double pane windows, a full kitchen with upgraded appliance package, and in-unit washer/dryer.

Parkview is pleased to provide construction financing for The Views at Georgia Avenue, said Paul Rahimian, CEO of Parkview Financial. Demand for housing in this area is strong and this property will offer high-quality, upgraded rental living in a gentrifying neighborhood.

The Georgia Avenue NW area features an eclectic mix of residential and commercial properties, including many restaurants and bars, small locally owned shops, and supporting commercial and civic uses. The neighborhood is adjacent to the Petworth and the Columbia Heights neighborhoods and is three miles north of the National Mall in a dense, urban infill area. It will provide convenient public transit for residents linking to the entire D.C. metro area. The commute to the downtown Washington D.C. is a 16-minute drive and 40 minutes via transit.

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Parkview Financial provides $7.2 million construction loan for 20-unit apartment property in Washington DC - Yield PRO magazine

The COVID-19 pandemic is impacting every facet of the economy, including commercial construction and real estate. While the depth of some of the impacts may not be known for months, if not years, there are several emerging trends shaping these industries now.

Construction Financing Issues

In the early days of the COVID-19 pandemic this spring, many companies looked at stopping, or at least pausing, construction projects due to the uncertainty about the economy. Many projects remain paused as owners continue to worry about their long-term viability or if there is demand for office or retail space when so many businesses are closed or people are working remotely.

A survey conducted by the Associated General Contractors of America (AGC) in June found that 68% of contractors had seen a project canceled as a result of the COVID-19 pandemic; 48% saw a project that had begun before the pandemic halted.

While some projects were paused to meet with shelter-in-place orders in states and cities where construction was not deemed essential, financial considerations also were a major concern. More than one-third of projects were stopped because of a loss of revenue to pay for the project, whether that be from lenders, investors or government revenue such as taxes.

Under many contracts, if an owner decides to pause construction, it will ultimately be responsible to pay the contractor for the delay.Similarly, if an owner cancels a project, under the standard American Insititute of Architects (AIA) contract documents, the owner will be responsible for a termination fee or the contractors lost profit on the project.With project financing also drying up, however, it may be uncertain where that funding will be coming from.

With projects on pause, banks are also seeing an increase in defaults on construction loans. Construction loan delinquencies at U.S. banks climbed 23.8%during the first quarter according to the Standard & Poors Global Market Intelligence Report.Anticipating this, the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES) passed by Congress made it easier to modify construction loans. Under the CARES Act, an owner may qualify for a forbearance arrangement, an interest rate modification, or a revised repayment plan.The CARES Actalso provides that any loan modification does not constitute a reportable troubled debt restructuring (TDR) or a default, and therefore will not negatively impact the credit of the borrower.

Construction Supply Chain Issues

One major challenge impacting still ongoing construction projects is difficulty in getting the needed materials on time. During the peak of COVID-19 shut downs this spring, many producers of building supplies either closed completely as they were not deemed essential businesses by their local governments or reduced their staffing and capacity to help support social distancing efforts among employees. This has led to a shortage in numerous supplies and ongoing supply chain issues.

In June, the ACG found that 25% of contractors were experiencing project delays or disruptions due to a shortage of construction materials, equipment or parts. Additionally, 38% of respondents said suppliers had notified them or their subcontractors that material deliveries would be late or cancelled.

Depending on the materials being delayed, supply chain disruptions can impact the timing of a construction project by days, weeks, even monthstime that in many cases cannot afford to be lost as contractors often face tight deadlines for delivering projects.

To help minimize disruption, contractors should request weekly updates from suppliers on the availability of necessary materials. A contingency plan for obtaining materials that may face shortages or delays should be developed. Contractors should also provide updates, in writing, to their clients both on potential supply chain issues and the steps that are being taken proactively to mitigate those risks and, if needed, look to renegotiate potential changes to the project completion schedule.

While it is generally the responsibility of the contractor to ensure a project is completed on time, there may be some contractual remedies for unexpected supply chain delays caused by the COVID-19 pandemic. For example, many contracts contain force majeure clauses or other language around impacts arising from circumstances that could not be foreseen or outside of the control of either party involved in the contract. Often these clauses call for an extension of time to complete the project but may not change the payment terms.

Lease Issues

The pandemic is also triggering force majeure clauses in commercial leases. A June bankruptcy court ruling in In re: Hitz Restaurant Group offers some guidance to landlords and tenants seeking to enforce force majeure language in their leases.

Hitz Restaurant Group, which operates a number of restaurants around Chicago, filed for bankruptcy on Feb. 24, 2020. One of its landlords, Kass Management Services, Inc., asked the court to require Hitz to pay rent due under the lease even after filing for bankruptcy. Citing force majeure language in the lease, Hitz argued that it was excused from the rent obligation as a result of the executive order prohibiting on-premises consumption of food and beverages in restaurants issued by Illinois Governor J.B. Pritzker on March 16, 2020.

The court ruled that Hitz had to pay its full March rent, since it was due before the executive order was issued, but the obligation to pay rent thereafter was reduced in proportion to the ability of Hitz to generate revenue.Based on Hitzs estimate that 75% of the restaurant was unusable due to the executive order, Hitz only owed 25% of its rent obligations for April, May and June. The court also rejected the landlords argument that Hitz could not enforce the force majeure clause because it did not apply for a Small Business Administration loan to meet its rent obligations.

In reaching its decision, the court found the force majeure clause in Hitzs lease unambiguously applied to rental payments and the executive order was the cause, at least in part, of Hitzs inability to pay rent because it restricted the restaurant to take-out, curbside pick-up, and delivery.

Although the Hitz decision is not binding in other jurisdictions, other courts may use a similar analysis for businesses required by law to shut down or reduce operations during the pandemic. Tenants should review their leases to see if the force majeure clause specifically references governmental orders and allows for excused performance of lease obligations, including payment of rent. For landlords, the Hitz case is a reminder to carefully draft force majeure clauses to allow for more time to pay rent, instead of excusing payment altogether or to include express language that force majeure does not apply to rent.

Regardless of how long the COVID-19 pandemic lasts, or how long the residual economic effects linger, it is likely this pandemic will create a lasting impact on the commercial construction and real estate market. What those changes are remains to be seen, but it will be vitally important that contractors, building owners and tenants more carefully consider things like force majeure clauses and their potential impact on contracts long into the future.

Brooks Pierce is dedicated to keeping our clients fully informed during the COVID-19 crisis.

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COVIDs Lasting Impacts on Construction and Real Estate Trends - JD Supra

Prominent Builders and Design of Glen Rock, NJ, is a family-owned and operated design, build, and construction firm whose professionalism, experience and reliability have made us a leader in the industry for over 25 years. Right from the first consultation, Prominent Builders integrates all aspects of the building process into a single concept, giving customers accurate design, cost and time frame parameters.

We specialize in new residential construction in northern NJ including Paramus, Glen Rock, Franklin Lakes, Fairlawn and neighboring towns. Building your new home from the ground up doesnt have to be a stressful process. As a full-service design build firm, we are able to offer all services necessary to design and build your project from concept to completion. If you already have blueprints, site plans, or conceptual design ideas, we will gladly work with you and your design professionals to offer you our complete host of services.

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Are you a commercial business looking to select a commercial builder for your retail construction or commercial construction project? Would you like to renovate your place of business? Prominent Builders understands the extra layers of complexity involved with these kinds of construction projects. When you work with experienced commercial contractors like Prominent Builders and Design, you are benefiting from the knowledge we have gained over 25 years from delivering great results for our commercial and real estate developer clients.

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New Home Construction and Residential Renovations - TAPinto.net

Dead malls have been viewedas attractive targets for industrial conversion projects in recent years, but nowthe retail-to-industrial conversion trend is expanding to shopping centers that are merely wounded, but still alive.

The Metro Mall in Queens, where Amazon leased industrial space formerly occupied by retailers Toys R Us and Kmart.

Mall owners this year are increasingly considering projects that wouldconvert vacant department store space in existing malls into last-mile distribution facilities as demand for industrial space has far outpaced retailduring the coronavirus pandemic.

Simon Property Group is in talks with Amazon to turn some of itsvacant department store spaces formerly occupied by JCPenneyand Sears into e-commerce distribution centers, the Wall Street Journal reported Sunday. Simon CEO David Simon, speaking on the REIT's earnings call Monday, said he could notrespond to "market rumors," but he did speak to the larger trend.

"Generally, the important thing going on that we're seeing is that moreand more retailers are distributing their e-commerce orders from their stores, so they're fulfilling from their stores and there are also the curbside pickup and all sorts of fulfillment options available," Simon said. "That's a good trend long term for us, but beyond that I don't want to get into logistics or any kind of speculation around Penney or Amazon."

Brookfield Properties, another major U.S. mall owner,isbeginning to experimentwithusing space at its active shopping centers for industrialdistribution space. The CEO of Brookfield'sretail group, Jared Chupaila, discussedthe strategy on the firm's earnings call last week.

"We have begun to test and trial with retail tech companies that are providing solutionsforlast-mile delivery and other fulfillment solutions where we can use otherwise unused space at the back end of shopping centers to help consolidate the packages and provide greater convenience to the couriers, all of which is expediting the delivery of the product and the volume of the product that couldbe delivered to the end customer," Chupaila said on the call, according to a Seeking Alpha transcript.

Amazon has already shown a willingness this year to lease space formerly occupied by retailers for its distribution facilities. In February, it signed a 10-year deal for 300K SF at the Rentar Plaza mall, also known as the Metro Mall, in Queens,Commercial Observer reported.

About 190K SF of the space Amazonwill take at the Queens property was formerly occupied by Kmart and Toys R Us. The property continues to operate as a mixed-use asset with existing retailers such as BJ's Wholesale Club, Jennifer Furniture and Burger King.

The REIT analyst who asked Simon about the Amazon deal, Mizuho Americas Managing Director Haendel St. Juste, toldBisnowthe conversion projects make more sense now because of the damage the coronavirus has wroughtin the retail market.

"Post-COVID, we now have a scenario where we have bankruptcies and store closures on top of what we've already seen the past couple years," he said. "Right now, the prospect of filling up a bunch of empty anchor boxes, who is the next user of that space? It's not like you've got a line of people queued up to take that space. You can read the tea leaves. The times are changing. The nature of the mall itself is changing."

A map from CBRE showing the retail-to-industrial conversion projects that have moved forward across the U.S. since 2017.

A CBRE report released last monthfound 59 retail-to-industrialconversion projects that have been completed, begun construction or been proposed since 2017.That is up significantly from January 2019, when there were24 such projects.

Many of the conversion projects CBRE found are full-scale redevelopments of completely vacantmalls, but CBRE Associate Director of Industrial and Logistics Research Matthew Walaszek said he is increasingly seeing owners look to convert vacant space in malls that continue to operate.

"That's something we have seen and we would point to as the next phase for the blending of retail and industrial," Walaszek said of the conversion projects in existing malls. "We will absolutely see more and more of that."

The conversionstrategyhad begun prior to the pandemic, asthe industrial market has performed much better than retail in recent years, but thecoronavirus has accelerated the trend as more people shift their shopping behaviors to online deliveries, Walaszek said.

"COVID has accelerated a lot of the trends that have been happening already," Walaszek said. "We're looking at new forecasts where e-commerce as a proportion of overall retail is higher than what we had previously anticipated."

Walaszek said CBRE has one retail landlord client, which he declined to name, that is looking for opportunities across 15 different markets to convert retail spacesto industrial. In addition to mall owners converting vacant big-boxspace, Walaszek said he is also seeing a growing trend ofdepartment store tenants shrinking their retail footprint to set aside space for delivery facilities.

"We're going to start seeing more concrete examples of retailers repositioning their footprint and incorporating logistics, especially as e-commerce grows and there's going to be a need for returns," Walaszek said.

Transwestern Senior Managing Director Mark Glagola, a D.C.-area industrial broker,said he has heard a great dealof talkin the market about the conversion projects and sees it as an emerging trend, but he has yet to see completed examples of projects that mix industrial and retail space.

"The industry appears to be really kicking this tire hard, and I do think things will happen, they just haven't happened yet," Glagola said. "We haven't figured out the logistics of how the fulfillment centers fit into a retail environment, and does it remain a retail environment? I do think they will happen, but they're still sizing each other out."

Glagola said he sees several potential logistical issues withusing vacant department stores in existing malls as industrial space, such as malls not having enough loading docks and the industrial and retail traffic mixing in the parking lot.

"The issues include the physical logistics and the potential mix of retail and industrial tenants from an asset management perspective," Glagola said. "Some facilities may be able to do it because they may be able to segregate the uses, others won't because they can't. Not every retail property is the same."

In addition to thelogistical concerns, St. Juste said there are also potential issues involved with the lease agreementsmall owners have with inline tenants, some of which depend on having a retail anchor.

"What does the mall look like if you don't have two or three anchors? And then there are co-tenancy risks that come into play," St. Juste said. "Inline tenants that have struggled and are looking to reduce square footage and get lower rents now could potentially get a get-out-of-jail-free card at some malls with potential co-tenancy clauses."

While there could be challenges withconverting department stores to industrial, St. Juste said mall owners don't have many better options.

"Priority No. 1 right now is, 'Let's figure out what we can do with all this excess space in a market where clearly retail is at risk and we need to think of a better path,'" he said. "It's just one more thing to try to make the best use of their space and stay ahead of the curve a bit."

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'The Nature Of The Mall Is Changing' As Simon, Brookfield Eye Converting Anchors To Industrial - Bisnow

After years of construction, the $80 million River Place facility is almost ready

Downtown Wilmington will soon welcome the grand opening of a high-rise neighbor.

River Place, an $80 million, 13-story mixed-use development slated to contain residential, parking and retail space, has not only made strides in attracting commercial and residential tenants, but is almost finished with construction.

Lucien Ellison, Senior Managing Partner for East West Partners, who has worked with the city on the project, said the to-do list is "getting smaller and smaller."

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The building welcomed its first apartment resident last week, and more residents are expected to move in by the end of August. So far, 10 out of the 79 apartment apartment units have been leased, Ellison said. A majority of condo residents have already moved in with only 10 more left for sale out of 92 units.

Along with the influx of condo and apartment residents came the project's 403 parking spaces, which finished construction in May and is currently open to the public.

Meanwhile, the buildings commercial tenants - Axis Fitness, Bank of America, Mellow Mushroom, the Nutrition Spot, and more recently, Dollar General-owned DGX - are working on outfitting their spaces, with some expected to open in September.

Among the other completed projects are a multi-level staircase connecting Front Street to Bijou Park with Water Street. An access to Bijou Park that would re-connect Chestnut Street to Water Street is expected to be finished in the next six weeks.

The current focus is to finish up the roadwork around the building, including the portion of Water Street between Grace and Chestnut streets. This portion, which has been closed for construction since 2018, should be paved in the next four weeks.

Although much has been accomplished, Ellison said the COVID-19 pandemic has slowed down the projects completion, decreasing the amount of workers on the site by about 25%.

Hurricane Isaias didnt help either. As a result of the storm, the building was left with water intrusion on the first floor, an issue workers are currently addressing.

Nonetheless, Ellison thinks the project could be fully completed within "the next couple months."

"I was thinking wed be way done by this point but were not so the timeline has changed so much that I dont even want to speculate on it," Ellison said.

Reporter Noah Johnson can be reached at 910-343-2364 or njohnson12@gannett.com.

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Downtown Wilmingtons 13-story development nears grand opening - StarNewsOnline.com

The former Anderson Storage building, above. Below, Chris Cole in the space being readied for Glen Goldbaums Lambs & Wolves salon.(Photos by John T. Ward. Click to enlarge)

By JOHN T. WARD

With the opening last week week of Sickles Market and Booskerdoo, Red Banks Anderson Storage building has all but completed a transformation in the works for almost two decades.

But for developer Chris Cole, who oversaw the project, its just another day at the office.

The north entrance of the new Sickles Market, above, and below, a rendering of the shipping container retail project planned for the site. (Photo by John T. Ward. Click to enlarge)

Whenever I finish one of these, I always feel like its a just a pause in the evolution of a property, said Cole, partner in the Metrovation development firm. Because were constantly working on whatever we do.

For example, the Grove at Shrewsbury, which Metrovation also built and owns. Im working on the next three years there how we are we going to continue to evolve and keep it interesting for our customers, he said.

As Cole spoke, a small crew was creating a green wall of plants steps away in the Anderson buildings lobby, part of a new addition that features timbers recovered from the onetime home of the Seattle Times.

The entryway separates the new Sickles Market, which hosts a Booskerdoo coffee and baked goods stand inside, and Bottles by Sickles, a liquor shop opened in October. It is space that can be used by customers of Booskerdoo and Sickles to hang out with a sandwich or coffee, Cole said.

But if the latest milestones are something of an anticlimax for Cole, theyre something else for Glen Goldbaum, whos planning to move his Lambs & Wolves salon and art gallery from Bridge Avenue to the second floor of the Anderson building.

Over the past 12 years, Goldbaum has seen the area undergo significant transformation, including construction of the Station Place apartments on Monmouth and Oakland streets, and Metrovations own West Side Lofts, a 91-unit apartment building at Bridge Avenue and West Front Street.

Now under construction just a block away is Denholtz Properties Rail development, which will bring 57 new apartments and retail space to a site that abuts the train station.

After all weve been through to get to this point, this feels like hope, Goldbaum said of the Anderson project.

A red brick fortress constructed at the corner of Monmouth Street and Bridge Avenue in 1909, the Anderson warehouse had been vacant for an estimated 25 years by the time Cole acquired it for Metrovation in late 2006. Its roof had begun to collapse.

What attracted him? I just liked the charm of it, said Cole, a 54-year-old Fair Haven resident. Theres always a feel to these things, and I thought we could do something interesting with it.

What that something might be, however, took years and several detours to be realized.

Before Metrovation came along, restaurateur Adam Rechnitz, owner of the Triumph Brewing Company in Princeton, and his now-deceased father, Two River Theater founder Bob Rechnitz, envisioned combining their creations in the Anderson site, which they and other family members acquired under the name Gemini Group in 1997.

In 2002, after Gemini acquired the former Blaisdell Lumber property on the opposite side of Bridge Avenue as the future home for the theater, Triumph proposed a three-floor, 360-seat microbrewery for the Anderson site, under plans that went before the borough planning board.

But Triumph eventually chose to open in Metrovations West Side Lofts project, also on the Blaisdell site.

Metrovations first run at transforming the 27,000-square-foot Anderson structure called for 23 residential units above two street-level stores, which won board approval in 2006. But the firm abandoned that plan in 2012, citing poor economic conditions following the global credit crisis.

Four years later, Metrovation went back to the board with plans for a four-story addition and other changes to nearly double the size of the structure, with retail space on the ground floor and offices above.

Cole told redbankgreen last week that he had been looking to land a single retail tenant, and decided one day to pick up the phone and call Sickles owner Bob Sickles, who was receptive to the idea.

Little by little we got more comfortable with it, Cole said, and the deal was announced in April, 2016.

In addition to what Cole calls an urban, grab-and-go version of the Sickles farm-style market in Little Silver, the buildings tenants includeSawtooth Group, an ad agency that took over the fourth floor last October, becoming the first occupant in more than three decades; Salt Design Company, an interior design firm; Applied Energy Group, a solar power company; Red Rabbit Aesthetics, a skincare boutique; and Dr. Robyn DelNegro.

Its still not full. Theres a breathtaking 6,000-square-foot third-floor space in the original part of the building that remains vacant, though talks with a possible tenant are underway, said Cole.

The final piece? Shipping containers, to be stacked on an island in the parking lot and used to incubate business that might someday grow up, move out and be replaced by another startup, Cole said.

While no tenants are yet lined up, theres a lot of people working out of their homes doing drop-off who have approached us, he said. The idea is get them stabilized as retail operations and then give them a gentle nudge out of the nest.

The containers are expected to debut in the spring of 2021, he said.

Goldbaum, who used the Anderson building for photo shoots when it was vacant, said Cole successfully maintained the integrity of the structure.

You wouldnt know whats old and whats new in here, he said.

Cole, characteristically, is reluctant to describe his creation as singularly transformative to the immediate area, which is also home to the Galleria at Red Bank, a former uniform factory converted to stores and offices in the 1990s.

I see it as evolution, rather than one big change, Cole said. Were just one contribution to it.

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RED BANK: ANDERSON 'EVOLUTION' ROLLS ON - redbankgreen

A third apartment building on Main Street gained approvals from the Riverhead Town Board last week.

The board voted unanimously at its meeting Tuesday to grant a special permit and preliminary site plan approval for the proposed building at 331 East Main Street.

The developer plans to build a four-story, 36-unit building on the .36-acre site. The units will all be market-rate apartments in other words, they will not be workforce housing apartments restricted to tenants whose incomes are under certain thresholds.

The developer will provide 34 parking spaces for tenants a reduction of two spaces from its original proposal to accommodate a town board request for ground-floor retail space. The original plans called for ground-floor display windows only and board members felt that does not meet the zoning codes requirements for active ground-floor uses. The plan has been amended to add an 812-square-foot retail space on Main Street at the expense of two ground-floor parking spaces.

An existing building on the site built around 1855 by blacksmith Richard Norton may be moved off-site if the town can find a suitable location. The developer will contribute $70,000 to the cost of moving the building.

The town Landmarks Preservation Committee suggested moving it across the street, to an area of the municipal parking lot between the Tuthill-Mangano Funeral Home and the Howell House. The Landmarks committee said relocating it there would fill a large gap in the row of historic houses that grace the entrance to Riverheads downtown. Discussions about a possible new location are ongoing.

The developer must still obtain final site plan approval from the town board, after it meets conditions imposed by the preliminary approval, including submission of engineered drawings and building elevations.

The other two apartment buildings on Main Street as well as one on Peconic Avenue were built as workforce housing projects.

Peconic Crossing on West Main Street has 45 rent-controlled apartments. It was completed and occupied in 2018.

Riverview Lofts is located on East Main Street and McDermott Avenue and is nearing completion and slated for occupancy this fall. It will have 116 workforce housing rental apartments plus ground-floor restaurant uses and parking.

Summerwind Square, the first apartment building constructed downtown under zoning adopted after the 2003 master plan was approved, is a four-story mixed-use building on Peconic Avenue, with 52 workforce housing apartments and commercial uses on the ground floor. The building was occupied in November 2013.

Nineteen workforce housing apartments were developed on the second floor of the former Woolworth building. The apartments have been occupied since February 2015. The ground floor has 25,000 square feet of commercial space, currently occupied by a fitness center, a hair salon, a flower shop, a mobile phone store and a bagel shop.

Plans for at least three other apartment buildings are in the pipeline: a 170-unit apartment building adjacent to Riverview Lofts; 28 apartments on the upper floors of a proposed extension to the Suffolk Theater; and 45 apartments on the upper three floors of a four-story building on the site of the former West Marine building.

The construction of the Peconic Crossing and Riverview Lofts buildings, along with the 170-apartment building proposed for the former Sears site adjacent to Riverview Lofts sparked controversy in the community, with residents complaining about the height and mass of the apartment buildings. The town hired a planning consultant to develop a pattern book for downtown development. It also hired another planning firm to update the 2003 comprehensive plan. Both of those planning projects are in progress.

The DC-1 zoning use district, which applies to the Main Street corridor, allows multi-family apartment buildings, up to five stories tall, by special permit of the town board. The code puts a cap of 500 new dwelling units in the Downtown Center-1 zoning use district.

The DC-1 district is within the Riverhead Parking District. Developers of properties within the town parking district are not required to provide off-street parking for their projects. Instead, properties within the district pay a special tax intended to fund parking facilities.

The town board held a public hearing in March 2018 on a proposed code amendment to require developers to provide on-site parking for new residential units built own property within the parking district or in the alternative make a payment in lieu of parking, or PILOP, when on-site parking is not practical. The proposal drew opposition from downtown property owners, who objected that it adversely impacted their property rights.

The proposed code has since undergone some revision and the revised draft will be presented to the parking district committee at its next meeting, Councilman Tim Hubbard, the town board liaison to the parking district, said today.

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New apartment building approved by town board - RiverheadLOCAL