Heavy briefcases stuffed with computer printouts used to be part of a leasing agent's uniform. But these days, deal-makers at Chicago-based General Growth Properties carry little more than a cell phone and a hand-held computer. Dialing into a database, they can access more than 15,000 lease agreements in a matter of seconds.
Back at the office, General Growth officials simply pop a CD into the computer to review color-coded floor plans of individual malls. A cluster of retailers near the food court might appear shaded in red, indicating lower-than-desired sales; an anchor tenant on the second floor might show up in yellow, indicating that its lease is about to expire.
Such tools are part of an ongoing technological renaissance within the shopping center industry that is changing the way many companies operate. Armed with high-tech gadgets, sophisticated software and the Internet, firms are doing deals faster, saving money, and learning more about themselves and the competition.
Investing in technology
"We're seeing a greater interest in and willingness to invest in technology," says Ron McComas, vice president of marketing for Cleveland-based Management Reports International, which develops property management software. "Historically, most owner/manager entities have focused on growing their portfolios. But now there's a trend toward perfecting portfolios, using technology to provide better infrastructure."
The industry is looking to manage transactions more efficiently and to improve communication between brokers, leasing agents and owners, says Todd Zeldin, president and CEO of Atlanta-based ACG Professionals, a retail-focused consulting and technology firm.
Zeldin, whose company can convert 10,000 paper leases into a web-based document management system in about 90 days, sees a movement toward automation and online record-keeping.
"Many companies still keep their leases in filing cabinets," he notes. "But the more time you spend negotiating terms that are favorable to you and the less time you spend shuffling paper, the more profitable you'll be."
In the palm of your hand
New technological tools are leading to changes in some of the industry's most established business patterns, says McComas of MRI. For example, one of MRI's software products, called Advanced Retail Sales Reporting, enables mall managers to continually track tenant sales data. The program automatically applies the appropriate formulae to calculate percentage rent.
"It's always been a struggle for mall managers to get that information," McComas says. "Now, they're linking directly into their tenants' operations using software that automatically feeds property management accounting systems."
By storing such information in databases that can be accessed using cell phones and Palm Pilots, General Growth has given its leasing agents unprecedented mobility, says Terry Leeper, the company's director of information systems.
In the past, even after carrying reams of paper to a deal, leasing agents often found that they lacked key information. Obtaining that information caused costly delays. But Leeper says the use of hand-held computers has dramatically reduced such situations at General Growth.
"It allows the leasing agent to uncover things. Let's say Footlocker is going into a new mall in the Southwest somewhere and wants to cut a deal at $18 per sq. ft.," Leeper explains. "An agent might call up similar deals on the Palm Pilot and discover that Footlocker actually pays $33 per sq. ft. at other stores in that area."
General Growth recently began using another system, called Dealmaker, that enables leasing agents to send deal information directly to a common database. Higher-ranking officials have instant access to that data and are able to approve or reject proposed deals faster, Leeper says.
Mall performance at a glance
Technology also is helping shopping center companies evaluate the performance of their portfolios. Huntington, N.Y.-based PlanData, a real estate-oriented software and services firm, sells a program called SpaceMan that converts raw data into color-coded floor plans. PlanData's clients include General Growth, Columbus-based Don M. Casto Organization, Cleveland-based Forest City Enterprises, and Phoenix-based Westcor Partners.
"SpaceMan helps companies determine a strategy for their properties," says Ron Beattie, PlanData's executive vice president of marketing. "For example, they could color-code sales per sq. ft. and find out who their good performers are. Or they might see a cluster of low performers. They could then ask those retailers to fix a poorly lit area or do something about loitering teens."
General Growth uses the software to examine lease expiration dates, occupancy costs, sales performance and other data. SpaceMan also helps General Growth identify candidates for re-merchandising, Leeper says.
Gaining an edge with retailers
The Northeast's largest retail brokerage firm, New York City-based Garrick-Aug, first began using computers in 1975. "At that time we were only working in the outer boroughs of Manhattan," recalls chairman Charlie Aug. "We set up this system and put in all of the neighborhood retail districts. It gave the location of the space, the size, the frontage. It turned out to be a very effective source in helping people look for locations."
Retailers' demand for information spurred those early efforts, Aug says. That same demand also prompted Garrick-Aug to launch a cutting-edge technology center last year at its New York headquarters. Staffed by five experts, the center cost more than $1 million to develop. It employs sophisticated modeling and database software and enables users to view and analyze hundreds of property sites. Its virtual tours save time and money.
"Let's say I have a retailer who wants to evaluate between 35 and 40 sites," Aug says. "Can you imagine getting in the car in three states and making a drive to see all these sites? It's going to take several days to do that."
The center allows retailers to view video walk-thrus of prospective sites. They can obtain details about pedestrian traffic counts, highway access, speed limits, natural boundaries, demographics, competing businesses. "The retailers love it," Aug says. "They come in and are just amazed."
Inspections, inventories and work orders
As any mall manager knows, the little things add up. ChannelTech Inc., a Houston-based software developer, offers Palm Pilot programs designed to tackle many of the small but important details of property management and construction. All ChannelTech products take advantage of the greater efficiency offered by hand-held computers. EZ Inspector, for example, is designed to replace time-consuming pen-and-paper inspections of building interiors, exteriors, plant and equipment.
"If you were to go into a shopping center and inspect 20 spaces, you'd have 20 pieces of paper that you would have to key in," explains founder Dean Schmidt. "With EZ Inspector, that information is recorded into an access database. It can figure out items like your total cost of sheet-rock repair for all 20 spaces, or the total amount of common area space you'll need to re-carpet."
ChannelTech's Service Caddy streamlines the often woefully inefficient way that most companies handle maintenance work orders. "Most companies still require their maintenance technicians to come by the office on a predetermined schedule to pick up paper work orders," he explains. "But in this system, technicians can basically flip up an antenna and request downloads of service orders. They walk around with Palm Pilots that will actually ring an alarm to alert them if they're late for a job."
Service Caddy also provides management with documentation for each call, Schmidt says. "The computer has a record of when the tenant reported the problem, how long it took to complete, and what was done."
ChannelTech also offers Punch Caddy, an inspection program geared toward new construction and tenant build-out; EZ Tracker, which combines the use of bar code stickers and scanners to conduct inventory for maintenance, repair and operating items; and Lease Caddy, a program that, among other functions, allows property managers to extract tenant profiles directly through core accounting systems.
As the shopping center industry continues to explore e-commerce, many firms are becoming comfortable with the idea of conducting business via the Internet. Some are beginning to take greater advantage of secure connections by making more of their internal matters accessible in real-time on the web.
Overall, the new companies and products reflect a trend toward the unification of now-separate accounting, leasing, facility management and other systems, says McComas of MRI.
"We think that there is a demand for greater integration of all those functions," he explains. "Probably the next major development is in the whole area of work-flow, where technology is doing a better job of enhancing the actual flow of information from start to finish."