Northeast Real Estate Business

MAY 2018

Northeast Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Northeast United States.

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W hen Amazon finalized its purchase of Whole Foods on August 28 of last year, the deal set off waves of activity across the grocery industry. The e-commerce giant was long rumored to be inter- ested in making a move to get into the brick and mortar grocery sector, with some analysts correctly specu- lating it could buy Whole Foods. Still, the news proved to be an immediate game changer in a sector still largely dominated by regional brands. "Before Amazon acquired Whole Foods, grocers were expecting the company to build a supply chain the same way they had for non-grocery items," says Garrick Brown, Cushman & Wakefield's national retail research director. "We didn't see a sense of ur- gency from other grocers until Ama- zon pulled the trigger." With the trigger now pulled, major grocery players are ramping up their own innovations, attempting to stay ahead of Amazon. Several are now testing or promoting online grocery ordering and/or grocery delivery services, and pushing for more expe- May 2018 • Volume 14, Issue 5 GROCERY CHAINS EMBRACE TECHNOLOGY Supermarkets are evolving to offer online ordering and delivery options — and it could affect real estate. By Haisten Willis New Jersey's Fort Monmouth: From Radar to Redevelopment page 29 INSIDE THIS ISSUE Marcus & Millichap Sees Positive Signs in Retail Sector page 31 Providence Retail Presents Signs of a Strengthening Economy page 26 New Restaurants, Breweries Make Pittsburgh Culinary Destination page 24 see GROCERY page 36 C ommercial real estate inves- tors navigating today's market are confronting a number of economic and policy variables that did not exist a mere six months ago. Tax reform and recent job gains have buoyed optimism about growth. But higher interest rates, a volatile stock market teetering near all-time highs, and possible tariff policies that could spark a trade war are generating anxi- ety. The dynamics dented single-tenant net lease investment activity early this year. But brokers fully expect to stay busy, and they do not foresee capital- ization rates rising significantly, if at all, especially on core properties and locations. An abundance of private and institutional buyers are still de- manding the bond-like properties that house dollar stores, pharmacies, quick service restaurants and other operators, many of which are consid- ered largely resistant to the disrup- NET LEASE STAYS STEADY Fully priced properties withstand changing capital environment. By Joe Gose see NET LEASE page 34 Amazon is installing pick up lockers in some Whole Foods stores, which increases the number of "micro visits" to the stores. CAMBRIDGESIDE REFLECTS COMMUNITY The 1.2 million-square-foot CambridgeSide Galleria, located near downtown Boston, is seeing new life following a $30 million renovation. By Katie Sloan C ambridgeSide Galleria, located across the Charles River Dam from downtown Boston in East Cambridge, Massachusetts, has long been a retail mainstay for its commu- nity. The 1.2 million-square-foot cen- ter features specialty retail and restau- rants, alongside a Hotel Marlowe by Kimpton and Canal Park, an adjacent office development surrounding the Lechmere Canal. To keep up with the evolving needs of shoppers today, New England De- velopment launched a $30 million renovation and rebranding of the de- velopment last year. The property — now known as CambridgeSide — un- derwent a comprehensive makeover designed to enhance shopper experi- ence and incorporate the energy of the surrounding community. "We've finished the interior process, and now we're heading into our exte- rior project, which is very exciting," says Jennifer Rotigliano, vice presi- dent of property marketing at New England Development. "We launched our campaign with a new logo and branding. Everything is very bold, see CAMBRIDGESIDE page 38 Photo credit: Georg Beyer

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