- The Hard Corner
- Posts
- 🚦The Hard Corner
🚦The Hard Corner
Happy Tuesday!
We're your go-to source for the latest news in the retail and finance sector of commercial real estate. Every other week, we'll provide you with a concise and insightful roundup of the key stories shaping our markets.
This edition covers critical shifts and strategies in real estate and retail, highlighting tax-saving methods like cost segregation for passive investors and the growing private equity interest in disaster recovery. Industry insights reveal rising mortgage rates, a cooling Sun Belt market, and challenges for retail giants such as Walgreens and TGI Fridays, who are adapting to market pressures. Meanwhile, grocery chains and Ulta Beauty are tapping into customer loyalty through expanded brick-and-mortar services, as L.A. faces rising retail vacancies and some chains, including Denny’s, close locations in response to economic headwinds.
📚First time reading The Hard Corner? Sign up here.
📉 Market Spotlight
S&P 500 Current: 5,826.84 2 Weeks Ago: 5,859.85 | 10 Year Treasury Current: 4.29% 2 Weeks Ago: 4.04% |
1 Month SOFR Current: 4.86% 2 Weeks Ago: 4.92% | WSJ Prime Rate Current: 8.00% 2 Weeks Ago: 8.00% |
*Data from 10/28/2024
📰 Featured News
REI Co-op Announces Major U.S. Expansion with New Stores Planned Through 2026
In a year of retail contractions and Chapter 11 filings, REI Co-op is bucking the trend by revealing plans for extensive expansion into 2025 and beyond. The outdoor specialty retailer, based in Sumner, Washington, has announced it will wrap up 2024 with 10 new stores and a renovated location in San Diego, then launch six new stores across California, Colorado, New York, and Washington next year. This growth comes as the company continues to prioritize connecting people to outdoor activities across the nation.
REI has already celebrated recent openings in Albany and Ithaca, NY; Beavercreek, OH; Beaverton, OR; Glendale, AZ; Loveland, CO; and Rancho Mirage, CA. By November, three more stores are set to open in College Station, TX; Louisville, KY; and Tulsa, OK. According to REI, these developments will lay the groundwork for an additional six store debuts throughout spring and summer 2025, with locations in California’s Carlsbad, Chico, and Elk Grove; Amherst, NY; Durango, CO; and Lynnwood, WA. Some of these stores will replace existing stores in larger venues to better serve REI’s growing customer base.
Mary-Farrell Tarbox, REI’s vice president of stores, stated, “The communities where we’re establishing new stores are gateways to some of the country’s most breathtaking natural destinations, places where our members live or visit to enjoy the outdoors.”
Spring 2025 Store Openings and Relocations
Four out of the six planned 2025 openings will occur next spring. This includes a new 25,300-square-foot Amherst store located at The Boulevard, serving the greater Buffalo region. Earlier this year, REI marked two other New York openings in Albany and Ithaca, further expanding its reach in the Empire State.
The company will also relocate its Encinitas, CA, store to a larger, 28,000-square-foot location in Carlsbad’s La Costa Town Square, adding to REI’s 11 Southern California sites. In Northern California, a new 25,000-square-foot store will open at Chico Crossroads, bringing the retailer’s total count to 10 in the region.
Additionally, the Alderwood, WA, store will move to a 39,480-square-foot space at Alderwood Parkway Plaza in Lynnwood, roughly a mile from its current location. The expanded store will enhance REI’s 11-store network across Washington State.
Summer 2025 Openings and 2026 Plans
REI’s summer 2025 openings will include a newly constructed 22,000-square-foot Durango store located south of the downtown area, adding to the company’s 10 existing Colorado locations. The other summer launch will bring a 22,127-square-foot store to the Laguna Gateway Shopping Center in Elk Grove, CA, strengthening REI’s foothold in the Sacramento area, where it currently operates stores in Folsom, Roseville, and Sacramento itself.
Looking ahead, REI has already signed leases for two new stores in 2026: a 23,848-square-foot space in Prosper, TX, and a 22,800-square-foot location in St. George, UT. The Prosper store will join four Dallas-Fort Worth locations, while the St. George store will expand REI’s reach in Utah, where it already operates three stores.
A Broad Range of Outdoor Gear and Services
The new REI stores will offer gear and apparel for camping, hiking, cycling, running, and fitness, with several locations—Amherst, Durango, and Lynnwood—featuring seasonal ski and snowboard shops for equipment servicing. The St. George store will offer Nordic ski tuning and snowboard mounting, catering to the diverse outdoor needs of REI members across the country.
🚦 The Hard Corner Picks
Maximizing Tax Savings: How Passive Real Estate Investors Can Benefit from Cost Segregation: Unlock Enhanced Cash Flow, Accelerated Depreciation, and Reduced Tax Liability Through Strategic Use of Cost Segregation and Tax Credits.
Riding the Storm: Private Equity’s Big Bet on Disaster Recovery: As Natural Disasters Increase, Investors Seize Opportunities in the Booming Remediation Industry.
Commercial Real Estate Market Faces a ‘Normalization Period’ Amid Shifting Trends: Rents and vacancies see a shake-up, while prices hold steady as the Sun Belt cools and transaction volumes rise.
Blackstone Eyes Fed Rate Cut as Spark for Real Estate Growth: With Improved Market Conditions, Private Equity Giant Positions for Increased Deals and Higher Property Values
Mortgage Rates Climb for Fourth Straight Week Amid Economic Strength: Buyers Pause as Freddie Mac Attributes Rate Hikes to a Resilient Economy
Tired of Corporate Management Companies? Want a Hands-On Approach?
Discover the OTS Difference
Are you or your clients frustrated with the impersonal service of large corporate management companies? At OTS Property Advisors, we pride ourselves on offering a boutique, personalized approach where your interests always come first.
With over 20 years of experience, our core values of Responsibility, Responsiveness, and Reporting ensure that we deliver exceptional service tailored to your needs.
Why Choose OTS?
Boutique Service: Personalized attention and tailored solutions
Expertise: Deep knowledge of property management, ownership, asset management, financing, and brokerage
Support: Premier in-house support with modern transaction methods
Property Types Managed
Retail
Industrial
Office
Specializing in properties in California and Nevada, we manage single-tenant and multi-tenant spaces, from 2K SF to 75K SF, with various lease types including, NNN, NN, Modified Gross, and Gross Leases.
Experience the OTS Difference Today
Visit our website or contact us to see how we can elevate your property management experience.
🛒 The Retail Corridor
Grocery Stores Boost Traffic and Loyalty with In-Store Health Clinics: Kroger and Other Chains Expand Healthcare Services, Driving Repeat Business and Attracting Diverse Demographics
Ulta Beauty Expands Brick-and-Mortar Presence Despite Retail Industry Challenges: With plans for 200 new stores, Ulta banks on physical locations to drive growth as it targets small markets and strengthens its foothold in existing areas.
LA Retail Market Faces Rising Vacancies as Tenant Exodus Outpaces Leasing: Population decline and economic headwinds drive retail availability higher, with tenant demand struggling to keep up in Los Angeles.
Walgreens to close 1,200 Stores as It Reassesses U.S. Retail Strategy: Pharmacy Giant Plans to Shutter 500 Locations in Fiscal 2025, Considers Selling Noncore Assets Like VillageMD to Strengthen Finances.
TGI Fridays Nears Chapter 11 Bankruptcy Amid Widespread Restaurant Sector Struggles: Following a failed sale and financial missteps, the iconic chain seeks debtor-in-possession financing, joining a growing list of dining establishments facing bankruptcy in 2024.
Denny’s to Close 150 Locations Amid Struggles in U.S Restaurant: America's Diner' Launches Major Optimization Plan, Facing Economic Challenges and Intensifying Competition
Editor’s Note
We dedicate significant effort into crafting a newsletter that balances information with engagement, but let's be honest – newsletters aren’t our day job. Marhilus Ventures is a diversified investment firm, involved in real estate, finance, and business investments. Our niche? Retail assets, hence "The Hard Corner." Specializing in middle-market value-add properties, both single and multi-tenant, we strategically invest capital through direct equity, joint venture equity, and debt structures across the United States.
Go Check out our investment criteria, if you have anything that may be of interest, shoot it over. We appreciate it!