By Kyle Reisz, zoning specialist

Big box retailers, refined over the decades, are custom engineered for the era of suburbia.  From the mechanics of their supply chains to the building footprint they typify their sprawling, repeating landscape. They are honest in their rebuff of individuality, favoring consistency of floor layouts and product offerings to sync the customer experience from store to store.  This unity was conceived and breed for a time when Keeping up with the Jones was our national motto. However, in the Internet Age, expectations for niche market products and a unique retail experience have been transposed onto brick-and-mortar stores.  The Joneses and their suburbs are out, personal ‘brands’ and urban settings are the new frontier. The challenge for big box retailers is to adapt an environment that is so seemingly hostile.

Following the movement of populations and wealth back into urban areas represents obvious opportunity, but big box retailers have little experience in these areas and are only just beginning to understand the needs of their metropolitan consumers. Two of the country’s largest retail chains, Target and Wal-Mart, have started rolling out new, urban format stores.  Because the transition is still in it’s infancy, several models are being explored.

Target has taken two approaches. The first is to stack two stories of retail over underground parking, resulting square footage similar to its suburban counterpart.  Floors are connected by escalators equipped to also move shopping carts and a mass transit hub is located in very near proximity. Chicago and Cleveland have been test markets for these urban infill models. The second, Target is calling it’s CityTarget concept.  Stores of 60-100K square feet will be placed in settings where 50k+ people are within a two-mile radius. Stores will overlap their customer base and optimize merchandise for hyper-local demographics. The goal is to promote high foot traffic and brand saturation to offset the higher rental rates in these areas. Target is prepping four of these for 2012 in Chicago, New York, Los Angeles and San Francisco.

Wal-Mart Stores is planning to open 30+ Wal-Mart Express stores in 2012. The concept of 30k square feet focuses on fresh and prepared foods with a reduced selection of general merchandise. The goal is to move closer to customers in urban food desserts, areas absent of options for fresh foods. Groceries drive the frequent, repeat traffic that is key to moving other merchandise.

In the coming years these retailers will tweak their new formats and explore new ones entirely.  What they will find out, and what some are already anticipating is that there will no longer be a one model fits all. All of their stores will be varied and require geographically hyper-specific merchandise and advertising. Permitting and zoning requirements will be more stringent in these urban settings and will require more labor to secure. Reduced parking options will push these retailers to explore delivery options and force closer integration with their online storefronts for in-store pick-ups.  The future will challenge these natives of the suburbs to adapt to denser surroundings, to compete with local stores already keenly tuned into customers needs. Big box retailers may find out that they format they are looking for is one that throws out the idea of a single format altogether.

By Vincent Macauda, Esq

Commercial real estate professionals are split when it comes to the use of a “national” land survey firm versus a “local” surveyor.  Some will only use national surveyors and others avoid them like the plague.

An analysis of this topic necessarily begins with a look at what a “national” land survey firm really is.  Many of the firms that claim “national” status are merely survey brokers; meaning they offer one-stop shopping for land survey needs, then subcontract the assignments to local surveyors.  So, while using a survey broker may save the professional the time and hassle of dealing with many different surveyors, it really is no different that using local surveyors for purposes of this analysis.

A “national” land survey firm is a company that employs professional land surveyors with licenses in many states, thus being able to deliver surveys in a majority, if not all, circumstances.  Local surveyors limit their services to the area where they are located, usually a county or two.

*National land surveyors will argue that for the commercial real estate professional that orders many surveys a year, they are more: convenient, consistent, cost effective, transaction oriented, tech based and faster.

*The local surveyor will argue that they are more familiar with the property in their back yard and the customs and practices in the local government offices where the property is located.

In the commercial real estate transactions, the “gold standard” for land surveys is the ALTA/ACSM Land Title Survey, which underwent a major overhaul in 2011.   A good way to compare how the commercial real estate professional will fare with a national survey firm vs. a local surveyor is to examine the how both will deal with the ALTA Standards and how their technics may differ.  Here are some examples:

Example 1:  Your preliminary survey is done but your lender is requesting that ALTA Table A Item 19 be added to the survey (Location of wetlands by appropriate authorities).

National Survey Firm:  Requests a copy of the Phase I Environmental Report, which states no wetlands exists, and certifies to Table A Item 19 with a note that per the environmental consultant, no wetlands exist at the property.

Local Surveyor #1:    Refuses to certify to Table A Item 19 because the Phase I Environmental Report states that no wetlands exist.  Your lender is not happy because they wanted the item certified on the survey, but the surveyor refuses believing he will be exposed to liability.

Local Surveyor #2:    Wants you to pay him $1,500 to have his geologist walk the property to determine the existence or non existence of wetlands, and if wetlands are found, another $1,000 to delineate the area on the survey.

In this example we see how local surveyors can have inconsistent interpretations of what is needed to comply with typical lender driven specifications.  It also exemplifies how cost inefficient the process can be.  The national firm makes a living day in and day out in the commercial real estate transactional world and is familiar with these requests.  The local surveyor may only do a few ALTA Surveys a year, spending the rest of the time with plats, subdivisions, construction staking or mortgage location surveys.

Example 2:  ALTA Table A Item 6 regarding zoning is required but the title insurer refuses to provide zoning information.

National Survey Firm:  Requests zoning classification and setback requirements from the municipality and certifies to Table A Item 6. No additional cost.

Local Surveyor #1:    This surveyor was hired by a “National” Survey Coordination/Broker because he had performed the survey a few years ago.  Any savings from his prior work was eaten up by the Broker’s fee.  While the surveyor had previously shown a detailed Zoning Chart with the appropriate information, he took the chart off on this update because the revised 2011 ALTA standards state that the zoning information will be provided by the “insurer” and the title insurer has refused to provide it.  Your attorney wants to talk to this surveyor to explain that the Table A items are negotiable and that everyone can agree that the surveyor will provide this information, but the Broker doesn’t want your attorney to talk to the local surveyor for fear that everyone will find out what the Broker is paying the local surveyor and how much of a “fee” was tacked on.

Local Surveyor #2:    Wants you to buy a Zoning Report and Zoning Endorsement before complying.

Local Surveyor #3:    Tells your attorney that local practice in his part of the country has the attorney looking up zoning information.

Example 3:  Your client just decided to purchase the property with a HUD loan and the survey you ordered included ALTA Table A Item 11A, not 11B, which is a HUD requirement.

National Survey Firm:  Requests the utility companies to mark the property by calling in a “dig ticket” and adds 11B for a reasonable additional fee.

Local Surveyor #1:    Requests that the client provide utility plans showing the exact location of the utilities.  Is told that no one has any such plans but doesn’t want to rely on dig ticket markings because he doesn’t feel they are accurate enough.  Asks you to hire a private utility locator to mark the property, which will cost $3,500.

Local Surveyor #2:    Is willing to rely on utility company markings but will not call in a “dig ticket” because no digging is occurring and thinks that he will be arrested by the dig ticket police.  He calls the utility companies and asks them to mark the utilities for survey purposes and has a tentative date for that in the Spring of 2013, so you end up calling the National Survey Firm above and paying for another survey in order to meet your HUD deadline.

Example 4:  Your deal just got fast tracked and you need to close in 3 weeks.

National Survey Firm:  Provides you a quote in 12 hours, is on site and starts the job in a few days, completes the preliminary survey in one week but can’t deliver the final until the title company catches up and provides the title commitment.  Title commitment comes in a few days before closing and the survey is revised to reflect the matters in title and a final survey is issued on time.

Local Surveyor #1:    Requests that he be provided a copy of the title commitment and all schedule b documents disclosed therein before he can provide you a quote or start the survey.  Is told that the title work will not be done until a few days before closing but says the ALTA Standards require that he be provided this information before he can begin work and since you need Table A Item 20, he can’t even provide you with a quote until he reviews the title work.

Local Surveyor #2:    Since he did the survey a few years ago, you choose him.  His price and turn around time is ideal.  Unfortunately, he slips and falls at your property, has no one else in his office that can finish the survey and has no insurance and is planning on suing you.

Ok, so some of the above examples have been embellished a bit to make a point, and being the President of the only true national land survey firm, I’m a bit biased, but these examples are all based on true stories.  The point being made is that although the argument that a local survey knows your property better and will be faster and cheaper is not necessarily true.  Commercial real estate professionals that need convenient, consistent, cost effective, transaction oriented, professionals handling their land survey needs find that going national is the best approach.  When we encounter issues that we believe can be worked out easier with the help of a local surveyor, we hire one even if it’s on our dime.  We have learned that what our clients hate most is for us to ask them for additional fees for matters that they believe were covered by the original quote.

For questions about these topics or any other survey matters, please feel free to contact me at vmacauda@millmanland.com.

by Kristin Balthaser

For those of you out there that are not using Virtual Surveyor – TAKE A FEW MINUTES OUT OF YOUR DAY TO LOOK AT THIS NEW PLATFORM.

Using VIRTUAL SURVEYOR you have the ability to look at “calls” or specific Schedule B items (say an easement for an electric line – or an easement for ingress and egress) by clicking on that item VIRTUAL SURVEYOR will automatically highlight the easement directly on the survey.  You can also click on a specific legend (say iron pins or water meters) and it will automatically highlight all of those items on the survey.   It also gives everyone the ability to post comments directly on the survey.   The tools that are available will really assist both the buyer/seller when conducting survey review and will significantly cut down on finalization time.  Everyone who handles real estate transactions knows that time is of the essence and this platform really helps bridge the gap and opens a line of communication in “real time” between both buyers and sellers.

Recently we had a transaction that had a very limited due diligence period (48 hours) and honestly without having the ability to use VIRTUAL SURVEYOR by both parties this transaction could have been next to impossible to get done.   It allowed the parties to go online using VIRTUAL SURVEYOR and to post comments/objections directly on the survey.   Without having the ability to use VIRTUAL SURVEYOR this process would have taken a minimum of 4 – 5 days to get done but instead, using VIRTUAL SURVEYOR we were able to complete the survey review in matter of hours instead of days.

Millman Surveying has created a platform that will forever change the way surveys are delivered and viewed.

By: Vincent Macauda, Esq.

Tabatha Adams was a paralegal in the real estate department at a big DC law firm.  Between the 2.5 hour commute each way and the long hours expected at the law firm, Tabatha’s family and personal time was nonexistent.  Then, an opportunity arose that has changed Tabatha’s life; doing what she knows best, title and survey review, from home for clients all over the country.

Outsourcing legal work has been a trend for years now.  Both law firms and corporations, in an effort to cut down on legal expenses, have been obtaining legal support services from legal support companies worldwide.  As reported in the ABA Journal, “[t]he market for outsourced legal work is booming”.  Most of this work is in document review, legal research or drafting areas.

Obviously, the most important issue with outsourcing legal support, aside from saving money, is quality.  Will the parties performing the service have the knowledge, training and experience necessary to provide value for this reduced cost?  In addition, language issues with overseas support can lead to problems.

The practice area that has not seen a large volume of outsourced legal support is Real Estate; this is mainly due to the specialized training expected by those performing the work.  In fact, good title and survey review experience is hard to find.  Christopher Garcia, a senior paralegal at Simpson Thacher’s New York office, says “title and survey review is a lost art . . . fewer and fewer attorneys graduate from law school with the necessary experience to do it well.”   It’s hard to find outsourced staffing that understands easements, restrictions and other “dirt law” documents, some of which may be handwritten and prepared many years ago.

Back to Tabatha.  Tabatha has landed at Millman Land’s Real Support Division.  Tabatha reviews title commitments, underlying title documents, ALTA land surveys, zoning and other matters that impact a property and provides a memorandum summarizing her findings to the many clients that have learned about the service.  Who are these clients?  Law firms that cut back staffing in their Real Estate Departments when the market slowed down, law firms  that don’t specialize in real estate but have a client that is acquiring a piece of property, corporations that own real estate and want a second set of eyes looking at the due diligence aspect of a property acquisition.  The cost of having Millman Real Support provide this service is much less than the customary approach to handing this review.

For information on ordering a Millman Real Support Memo for your next deal, click here.

For information on becoming a Millman Real Support team member contact tadams@millmanland.com.

By Chelsea Blackerby

Have you seen these little matrix squares around?  They are called QR codes (abbreviated from Quick Response code). First, it is important that every lawyer understands exactly what QR codes are and how to best use them.

Developed in Japan in the 1990’s, QR’s have been used internationally for some time now. The recent proliferation of smartphones has opened up a world of possibilities for the use of these codes, made possible by the smartphone’s camera and it’s internet connectivity.

How you use them. Take a picture of the code and smartphone users are instantly connected to digital resources from videos, webinars, landing pages or entire ebooks The only other thing you need besides your phone is a free code scanning application. These are downloadable just like any other smartphone app. Anyone can create them and read them for free. QR codes last forever and each one is unique

Welcome to the powerful world of mobile marketing where everyday items become a website through physical world hyperlinking. You can put this code on any media you want and  take it anywhere. These codes are great for printed materials since they allow you to communicate more without cluttering up your ads. Print-to-mobile-to-web messaging is perfect for advertisers, publishers and brands because they are connecting the physical world to the interactive world and driving traffic to their mobile internet site. This is an effective way to add interactivity to any print media

As they become more ubiquitous, QR codes are merely a convenience to take people to a site without all that typing. They are also a quick way to induce loyalty by offering great discounts. And with no internet connection they are still pragmatic. They can be designed to dial a phone number when scanned, display an informational text, a coupon, play an audio file or download contact info.

There is one important caveat to using a code scanning application on your phone. The default settings allow marketers to collect location-specific information about you whenever you are snapping a code. Sure, that’s useful for sellers, but to me, it’s still a bit creepy. The General Terms of Use also includes language about access to and use of your data and messaging information. The fact is most smartphone applications probably include language such as this, so just be aware.

So, is the intrigue of a lone QR code enough to entice a scan? Like everything novel, how much longer will they induce curiosity?

I did some searching for creative uses of QR codes. Here are three impressive uses:

Coca cola advertising in Japan. McDonalds in Japan are also using this on the side of burgers which directs you to a web page displaying the nutritional information.

Red Door Marketing company did a QR code mobile scavenger hunt.

http://www.imediaconnection.com/content/26320.asp

North American Shoe has QR codes where you can scan and see a video of how they were made.

by Kyle Reisz, Zoning Specialist

Consumer research shows that use of Wi-Fi enabled devices are increasingly influential in all aspects of the retail experience.  At a furious pace, consumers are using these devices to determine where and how they spend their cash.  Retailers who can effectively leverage this opportunity will have a major advantage over their competitors.

The increasing presence of Wi-Fi enabled devices in a consumer’s daily life is dramatically shifting how they think about the stores, restaurants and public spaces they visit.   The ability to connect to a free, reliable, high speed network can be influential in driving people to or away from a certain store or space.   For a growing segment of the population the presence of Wi-Fi is a necessity or perk they are less and less willing to forego.

Consider the move in last July by coffee juggernaut Starbucks to discontinue its pay-by-the-hour service in favor of free, unlimited access.   Starbucks has long projected itself as a third place, that peaceful, comfortable destination between home and work.  But the need to be connected at all times and the cumbersome and pricey barriers Starbucks put in place was changing that perception for many of its tech-savvy customers.   Facing increased competition from the likes of McDonald’s and mom-and-pop coffee shops, they were forced to rethink their approach.  Customers need to connect and are showing with their feet they will pick and choose destinations based on their ability log on.  A reputation for fast, free and reliable internet access is becoming an essential aspect of building a loyal customer base in the hospitality industry.

Coffee shops are not alone in seeing a rising demand for and return on investment from free Wi-Fi service.  A report from the market research firm Deloitte shows that “25% of North American big box and anchor tenant retailers will begin offering free in-store Wi-Fi access to shoppers” in 2011.  The same report states that “41% of smartphone users have checked competitors’ prices on their smartphones while in a retail store.”

Consumers know that knowledge is power, and in a retail environment, that power can save them money.  A retailer that offers free Wi-fi is able, right from the home page, to engage and reengage its customers with information about its products, services and special offers.  For instance, when launching your browser when connected to a business’s local area network, the homepage can be configured as an interactive ad for that business.  Imagine a shopper who logs on to compare a rival retailers prices on an LCD TV, yet before they can even load that rivals page, is shown an ad for an internet exclusive price for the store they are already in.  The Wi-Fi service has just enhanced the potential for a sale that may have been lost had the customer logged on over their 3G service.

Offering free Wi-fi is just one more convenience retailers can offer their customers in an environment of fierce competition.   The ability of the retailer to effectively manage and derive increased sales from it however, is dependent on their creative exploitation of the opportunities it can provide.   There is little denying that free internet access will continue grow as a demanded service.  The sooner retailers embrace and leverage it, the more competitive they will become

MVS2 Feature Overview from Vince Macauda on Vimeo.

by Chelsea Blackerby

E-commerce is no new thing. It came in like a lion along with the .com boom and is riding the backs of kiosks to bring a virtual marketplace to the old brick and mortar.
Withdraw some cash, buy a stamp and next month’s tickets to Curacao, print last month’s photos, get tonight’s chow and feature film and then pick up replacement earbuds for your iphone from the Apple kiosk—the last station in row of increasingly diversifying, automated, contact-free transactions at kiosks ready to serve.
We are in the midst of a paradigm shift and the aftermath is changing the face of retail, product exchange, and ultimately how we consume. This metamorphosis changes Ebooks, iphone apps, music files, shopping carts and the list goes on. The quintessential consumerism is expanding it’s wings and the span has endless permutations:

• New Zealand Post closed 20 post office branches and Kiwibank outlets last year and rolled out a number of automated kiosks across the country.
• Touchscreen kiosks have popped up across 7000 European McDonald outlets
• Apple has new mini store’s spread across malls and Best Buy’s, fully stocked with accessories for your Apple products.
• Redbox and Netflix have made video rental store’s nearly obsolete with 22,210 kiosks in operation.
• Picture kiosks have found their homes at all major supermarkets and drugstores.
• Souvenier kiosks and bike kiosks are now sprinkled across bigger cities in US and Europe, supplying a new kind convenience for tourists and locals.
The benefits are clear for retailers. Mobile real estate kiosk systems range in cost from $58,000 for a 20 footer with 4-5 units to $72,000 for a larger system with up to 8-9 units. The cost is even less for touch screen ordering units.
The in-store touchscreen provides an additional platform for retailers to boost internet sales in whatever way works for the customer: in the store or online. It is a risk-free way of offering a wider range of products and testing out new products, without the investment of shelving the products.
There are some overarching costs with the trajectory of this retail revolution. The kiosks are labor-displacing technology. They‘re essentially training self-serving consumers. With no laborers and infinite virtual space, the commercial space kiosks require is laughable in the face of the traditional big box superstore. While the kiosk could be seen as an uber-condensed artificially flavored shopping experience, it’s asking the retail industry and it’s consumers to rearrange things. This isn’t necessarily a bad thing- instead it is prime time for some out of the box thinkers to get creative with HOW the displaced need for workers and CRE is handled. What does this mean for CRE? Whatever “formula” that could accommodate the new demand for convenience while carving out new CRE opps  has room for exponential growth in a vast untouched market place.

Sources:

GoMobilityblog.com

Screenmediamag.com