I’m crazy about Christmas, as my family and friends attest. How crazy (Click the image to watch the video.) This year I drafted a NASA engineer to help coordinate the outdoor light display at our home. For him, it’s a hobby; for me, it may be an obsession.
In all, we used an FM transmitter and more than 30,000 lights including six concert-level programmable spotlights that twirl and change colors. ‘Gary from NASA’ and I spent more than 200 hours planning, placing, wiring and sequencing the display that covered our entire front yard.
Following setbacks, errors and several tragedies, we flipped the switch. Our younger children thought they were living in a fairyland. The older ones invited friends to check out their dad’s insanity. My wife Rushton smiled and nodded knowingly.
When the cloud deck was at the right height, the spotlights could be spotted from miles away. People could see the spotlights from 280, downtown and one person could even see them from the airport. People all over town made pilgrimages to see the spectacle. Sometimes there was a stream of traffic two blocks long. My oldest daughter, Anne Rainey, a natural entrepreneur, recognized our house had become prime real estate for a business opportunity and started selling hot chocolate for $1 a cup. (Hopefully that will help defray the cost of our next electrical bill.)
Was it worth all the effort? Absolutely. In fact, this is the sixth year the Waltchack household has been lit up like a Christmas tree. Bigger and better than ever. And we’re already making plans for 2020.
2019 was a bigger-and-better year for Shannon Waltchack in a number of ways.
Globally, we increased our headcount to 34, upgraded talent and stretched our footprint even further outside of Alabama. Allow me to update you by considering the 3 silos of our business–Property Management, Brokerage and Investments.
PROPERTY MANAGEMENT
In 2019 we added an additional 552,100 SF to our managed portfolio including 73% that was 3rd party work. This has been a big goal for a couple years and Director of Property Management Jeff Chopin, CPM is doing a fabulous job growing and perfecting our processes.
We made four big hires in 2019, bringing onboard Julie Gieger, CCIM, CPM and Brandon Pennington to our Birmingham office. Sandra Bowman oversees our growing portfolio in Tennessee from Nashville. Cynthia Essary joined the Accounting team as the Accounting Manager.
On a sweet note, we secured the management of Savage’s Bakery properties in Homewood including Sike’s Shoes, Jack & Jill and Roly Poly.
That account comes with some fringe benefits including cookies and cakes which we’re all pretty excited about. If you know of anyone who needs assistance with management of their commercial properties, we’d love to help.
BROKERAGE
As with property management, we added quite a bit of seasoned talent to our brokerage team.
John Hardin, SIOR, CCIM a 36-year CRE veteran is working on sales and office leasing. Tyler Bradford, CCIM, formerly the VP of real estate for Books-A-Million, is now leading our retail team. Keith Shamblin, formerly with Retail Strategies, will be working on retail leasing and site selection alongside Tyler. Finally, Jonathan Kahalley joined the marketing team to increase broker support. He will also help our brokers by upgrading our reporting to owners.
INVESTMENTS
Our first fund, SW Neighborhood Centers I, closed on shopping centers in Orlando, Tampa, Atlanta and Norfolk, VA. We have room for 1 more center in Fund I and we will begin raising equity for the second fund in Q1 of this year. The footprint of the second fund will expand to include the Midwest in addition to the Southeast. While property appreciation is stronger in the Southeast, the cash-on-cash yields are higher in certain Midwestern cities including Cincinnati, Columbus, Indianapolis and Kansas City, where the population growth is as strong as Southeastern cities. Over time, we hope to construct a portfolio of roughly half Southeastern properties and half Midwestern properties.
The lynchpin of our strategy for these unanchored, highly convenient centers is that service retailers are growing despite all of the bad retailing headlines. Typically, service retailing is difficult, if not impossible, to do online. Countering much of the brick-and-mortar marketplace, this category of retailer is growing. This newly released ICSC paper discusses this trend empirically. 59% of our tenants in the fund are service and food.
And while you’re at it, here’s an article from the Wall Street Journal discussing a similar topic.
Len, Tim, Andrew and I are incredibly grateful for our clients, employees, lenders, vendors and investors; you make it possible for us to do what we love. We’re thrilled we have so much good news to report and hope you’re heading into an exciting new year.
Gratefully,
Derek Waltchack
P.S. come see our Christmas lights next year. We’re sourcing something special that will bring the show right into your car. Until then, let’s have a great 2020 together.
