Developing Real Estate: How to Find and Invest in Great Locations

The retail industry is more dynamic than ever. Retailers must evolve to succeed over the next decade. However, the cost of real estate continues to rise so convenience store operators must make wise decisions about how to develop properties. This important issue will discussed only at the 2017 National Advisory Group (NAG) Conference in Nashville Sept. 10-13th.

Real estate development is a multi-step process that can be complicated, lengthy and risky. It can take years to bring a project from the initial planning stage through construction to final completion, and there are plenty of obstacles that can pop up along the way. Yet development projects also can be highly profitable investment opportunities. By definition, development projects provide the opportunity to deliver a product that does not currently exist into a market, often providing the fresh new supply to satisfy market demand. When executed well, this aspect of a development project can translate into a runaway success story, something that simply isn’t nearly as possible with an existing asset.

This kind of growth for a convenience store retailer is an exciting time. Reinvesting earnings into the expansion of their branded stores through new construction communicates that a) business has been good; b) by growing the network of stores through brand-new locations, it helps strengthen market share; and c) it has a bright future.

How a retailer achieves this growth is another story. If you can map out your marketplace geography in advance with an estimated amount of locations that you would like to add in the next year, three years or five years, you will be well ahead of the curve. This may seem like a basic concept, but it is amazing to me how many retailers fail to do this. They simple add a store here and a store there—often randomly—then come to discover that they have cannibalized store sales or developed a series of “B” sites.

At the 2017 NAG Conference, a panel of real estate experts will take on the challenge of explaining effective strategies for buying and developing real estate to boost profits, expand your store count or renting out properties to other business owners.

This panel of proven experts includes:
* Charlton Bell, Senior Vice President of Facilities, Tri Star Energy
* Robert Buhler, President & CEO, Open Pantry Food Marts
* Jack Kofdarali, President & CEO, J&T Management Inc.

The panel will be moderated by Mark Radosevich, President, PetroActive Services.

Register NOW for the 2017 NAG Conference.

Strategies for site development include:

Creating A Long Term Strategy: Be mindful that new construction will take time and capital. In most cases, it will take longer and cost more than you originally plan for. Securing sites is only the first step. Designing, permitting, building and ultimately operating your new sites require a tremendous amount of time and patience.

Determine Metrics to Support Projected Store Counts: Operators need to develop metrics for their site selection. Are you more interested in a certain day part? Does your concept require auto accessibility, parking and minimal thresholds for traffic? Is this an urban location where foot traffic is critical? What are your standard hours of operations? All of these questions help to isolate the best possible sites for your concept.

Establish a Time Table: Once you have established a targeted number of new store openings, it is important to create a five-year strategic rollout plan for the sites. Your pipeline of stores may be contingent upon the capital of the organization so the speed of your implementation may have a governor in place. Whether its one store a year or ten, carefully mapping the ideal sequence of stores at least gives you a target to aim for. While leases and permitting may present the ultimate wildcard to your rollout, create a timeline as your foundation.

Visualize The End Game: So what does the end game look like for your company? Will adding 5, 10 or 20 locations over a five-year period position your firm with a solid level of market share to optimize the customers growing needs? Growth for the sake of store count is the wrong approach. Growth by creating greater value for your targeted customers and ultimately for your company and its stakeholders is the prudent path for success. Adding new sites to the fold should create stronger synergies for the bottom line. Ask yourself the following repeatedly, “how long will it take and how much?”

Communicate the Expansion: Creating a real estate long-term strategy is only one part of the overall process. While you may increase the store count within your targeted trade areas, it is equally important to link these stores together with a cohesive communications strategy. Don’t assume that your customers know of all the growth you have experienced in the recent years. Connect the dots for your customers and don’t be afraid to “pound your chest” a bit. Customers like to be reminded that they have made smart buying decisions by patronizing the “up-and-coming” go-getter company like yours.

To learn more about this important issue, register for the 2017 NAG Conference or see the full conference agenda by visiting www.nagconvenience.com.

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