Beyond building: It

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Since there is less demand for newretailp space, developers are branching out into other areas, such as providinhg leasing and management services for retailp properties they don’t own. For this is the first time their expertisew is being made availablee tooutside owners. Scott Shillings of SRS Real Estates Partners, which primarily represents retail says a lot of developers have survived by getting into leasinhgand management. “I think a lot of people are looking at that as arevenues stream,” says Shillings, executive vice president with SRS. Woodyh Mann Jr., president of Vista Private Equity confirms that many developers are taking this including hisown firm.
“People do what they have to do to he says. NewQuest Properties has increase the amount of leasing it doesfor third-party owners to the point where it leases almost as much square footaged for other owners as it does for itself. Houston-basedc NewQuest handles leasingfor 7.2 million squared feet of retail space it owns, and is responsibl e for finding tenants for an additional 6.7 millioj square feet for other Katherine Greene, NewQuest’s presidentt and chief operating officer, says third-party work used to comprisde less than 20 percent of the company’s but it’s more than twice what it was at this time last “It’s substantially higher now,” she “We had to look to replaced revenue.
” Outside leasing opportunities are more readilyh available, Greene says, because some developerxs cut their brokerage staff but still need help leasin their existing centers. NewQuest, which has 70 has also laid off some peoplew because of thedevelopmenr downturn. Five people in the construction, legal and architecture departmentas have beenlet go. However, NewQuest is beefing up its broker numbers at thesame time. Five of the company’xs 25 brokers were added in the lastsix months, Green says.
The firm does not do as much third-party management as it does third-parthy leasing, but Greene says the management portionof NewQuest’es business is four to five timees as large as it was a year ago. NewQuest is also biddingt to handle leasing for distressed propertiees that have been taken over by but has not yet securedany “It’s a sad commentary on the market that that work is says Greene, noting that most locap banks have not yet taken back a lot of retaikl properties. Houston-based firm Vista has lande d assignments with two banks to manage and leasedistresse properties, but Mann won’t divulge which ones due to confidentiality agreements.
Mann predicts there will be less distressed property work than therre was during the 1980zs savings and loan crisis becaus e banks today are working more with clients to avoidx takingproperties back. In addition to bank Vista is doing more of its own tenantg improvement construction as a way to boost thebottoj line. “A year ago we outsourced most of that,” says who laid off four peopleelast October, leaving the firm with 22 “We’re doing that in-house, just as a way to generate additionalp fees.
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