Caution - niche content for mixed-use developers. Keep scrolling otherwise: I've spent 30 years developing and redeveloping retail and mixed-use real estate. The one big thing I learned is that each tenant has a halo effect (good or bad) on the rest of the property. For example, Hermes has one effect on its surroundings, Spirit Halloween has another. It's one of those things that once you see it, you can't unsee it. It often manifests as a domino effect - maybe an honest bar with good tacos opens in a rough part of town; locals appreciate it and an independent coffee shop opens next door, followed by a quirky bookstore/vintage shop, attracting odd entrepreneurial adventures like a cat viewing studio with bossa nova vinyl or something. These initial movers lead to more serious restaurateurs seeking adventurous diners, old buildings, and reasonable rents. A virtuous circle of energy begins, attracting home furnishings and art galleries and sooner or later a new group fitness operation. The extreme evolution goes to Erewhon, Sézane, and $2,000/sf condos if that's what the market wants, but often it's simply underused properties attracting capital to meet a community's aspirations. Much of Brooklyn is some version of this pattern, and if you live in a reasonable sized city, you've witnessed it too. For developers, the pattern represents a high-leverage opportunity where simply attracting the right ground floor tenant(s) can increase the desirability of what's above. Said differently: a wonderful coffee shop sells more than espresso, it sells office space, hotel rooms, and apartments. A typical value-add program for an apartment building often consists of going space by space to spend time and money on cosmetics like new countertops, appliances, and paint. Alternatively if the right specialty grocer, pilates studio, and sushi joint opened next door it could have a bigger impact on desirability and rents without stepping foot inside any of the units. Owners and developers with a concentrated scale benefit the most from this pattern. In the case above, the impact is the same on each of the apartments whether there is 40 of them or 4,000 so long as they're in immediate proximity. These economies of scale can change the math of development. If a Stephen Starr restaurant on the ground floor of an 1 million square foot office building can add a few dollars of rent per square foot upstairs, or attract a new anchor tenant, or retain an existing anchor tenant, or speed lease up by a quarter or two, spending $10 million to build the restaurant might make a lot of sense, whereas if there was only one floor of offices above, it might not. A very very small percentage of retailers and restaurateurs have the juice required to make a meaningful impact on their surroundings. I've spent years building relationships with those that do, the ones that have captured lightning in a bottle and can be the catalyst to differentiate a new development. Three years ago, because there's no way I personally could ever begin to take on all the projects these very special retailers and restaurateurs could hatch, I started a business to connect them with other developers. The company (called Automatic) has taken off because connecting with these small innovative brands is difficult - getting in touch with them might mean walking through a kitchen asking "who owns this place?" - a tough thing to do at scale. Automatic brings together developers and property owners with these catalytic businesses through a series of invite-only events across the country. As it's expanded geographically, the community has grown from award winning restaurateurs, emerging brands, and developers to include some of the country's top architects, leading global investors, and larger brands looking to learn from what the cool kids are doing. The primary business is 300-400 person 2-day blowout events in major markets across the country, along with more intimate quarterly dinners at interesting projects, a private online community, and publishing an annual book covering cool projects by Automatic's members (see attached photos). Growing Automatic has been a blast, building a team with my favorite people, and connecting some of the coolest cats in the business. If you're a developer and this resonates, check out automaticmeetup dot com or DM me.

Life goes on @EllliotttB

My daughter, excited about rooming with some others in a questionable NYC apartment: "the bedroom is 12x14 and it has its own half bath" where would you shower? "the bathroom has a shower" why is it a half bath? "you can only go #1"

A big part of daily life in Atlanta is figuring out where to get gas without something wack happening

I used to think title stuff was boring until a friend bought a post office in Tombstone AZ that had Wyatt Earp on the chain of title.

the only thing better than hand-painted signs is gold leaf hand-painted signs

IMW10 + GS2

The latest edition of Asphalt Jungle takes a look at how Atlanta's funkiness shapes real estate development. Check it out: ericweatherholtz (dot) substack (dot) com

Having a tough time with that refinance? Just remember...

“Word has it Blackrock is modeling 9% rates”.

A handful of times I've had a project generate an annual unleveraged yield exceeding 10% and each time thought quite highly of myself. Learned today that my daughter has been renting her clothes out on line and just got $38 for a three day rental of a dress for which she paid $250.

One of our most used transaction attorneys has a hotmail email address. Trying to decide if that's a positive or negative.

Some recent Sunbelt urban/infill retail property trades happening at sub 5% cap rates. My favorite investment sales broker today when asked how buyers are reacting to increasing interest rates: "Nobody cares"

In an America of weighted vests, mocktails, and calories on menus, one has to go to Paris to find a proper restaurant.

Dripping with vibes

My AI has evolved from an encouraging ass-kisser with lots of info into a petulant jackass that finishes every answer with a flourish, tying everything together with some bold and unnecessary statement. I'd avoid him at parties, not sure why I'm paying for him on my computer.

A friend had a termite business in a mid-size southern city for 23 years before selling it. People would pay $500ish up front and $150 or so per year for a bond which meant his company was on the hook to remove termites and repair any damage. Over 23 years of ownership he paid out $0 in claims.

Some commercial property owners will be surprised to learn the solution to lower leasing activity is not requiring more updates from the leasing brokers.

current status