Want to know the secret of making money? It’s simple: become an expert. Aspire to be that indispensable employee or the person who seems to have a corner on the market of a specific kind of knowledge. Like Zac.
Zac is an expert at determining if rare and high-end athletic shoes are authentic or fake. His formal title is Sneaker Authenticator at Stadium Goods where prized shoes can sell for more than $4,000. His favorite method of detection: he can sniff a pair and discern the difference. Fake shoes have a distinctive aroma, they carry a strong odor of cheap glue. In less than 30 seconds, he can render a verdict.
Other tells: slight color deviations, tissue paper that tears too easily, an inaccurately sized box. Zac processes 200 pairs daily, more than a million pairs over his hyper-specific career. He’s never made a mistake.
At Shannon Waltchack we’ve developed expertise in small, unanchored retail strip centers. We own 40+ of these centers and are actively looking for more. Typically we investigate over 100 offerings per month in a footprint that encompasses Alabama, Florida, Georgia, Tennessee, Kentucky, North Carolina and Virginia.
At first whiff, we eliminate some properties—the demographics are outside of our upscale target profile, the access is difficult, the price is too high. Other opportunities require more investigation and our sixth sense comes into play. We have both an analytical understanding and gut instinct about each center under consideration.
Here’s an example. Take a look at the aerial below of a shopping center located in Tampa, Florida. This was a deal a broker sent us.
What do you notice? What’s good? What’s bad?
As experts in this specific niche, we know that some uses have a high store-closure rate while other uses and certain brands never move—have you ever seen a UPS store close? Me neither. And we have a list of another fifteen retailers who almost never move. Like Zac, we can discern that the “glue” that holds the center together is legit. Of the 100 properties we consider each month, an average of twenty get beyond the initial screen.
Here’s where our expertise transforms into profit. Having closed on hundreds of properties, we know how to negotiate a fair price. We know how to develop a merchandising plan for each center, find the right leasing team and implement attentive property management.
We repeat this process again and again, always emphasizing quality of investments over quantity of properties. With each acquisition, we build our reputation in this specific realm of real estate.
And do you know what’s happening in this niche? It’s exploding. I just returned from an ICSC convention in Chicago and learned that SITE Centers (the old DDR) has bought their first small unanchored center in Austin, TX. They plan to buy many more. And three more national REITS alerted the brokerage community at the show that they’re going to pursue a strategy of acquiring the same product type.
Our thesis is that these easy-to-access and highly visible centers are and will be the home for Amazon-resistant retailers. And that will be the future of bricks and mortar going forward. Where does your expertise lie? What is that niche where you possess a depth of information that makes you indispensable or assures that you will be able to benefit financially? The shoe evaluator’s position is filled but you undoubtedly have a wealth of knowledge that can be utilized more fully.
Draw on our knowledge and perhaps you’ll someday return the favor.
I hope you all have a fantastic 4th quarter and Holiday season.
P.S. How lucky are we that we live in an era where anyone can become an expert on anything with the web. What’s your passion? Dig in!
Also, check your closet for some old Air Jordans!
