A broker in Los Angeles-based Rosano
Partners’ Retail Services Group, Michael Lagazo is one of the commercial real
estate industry’s most visible members on Twitter, where he provides followers
with a steady stream of industry news and analysis.
We recently got a chance to talk with
Lagazo about his work at Rosano Partners, his take on the current state of the
retail sector and the inspiring example of his uncle.
Based in San
Diego, I provide landlord and tenant representation services in Southern
California for Rosano Partners. I optimize the value of the property in a trade
area, identify qualified prospects, and design strategic marketing and
financial strategies in agency leasing, portfolio leasing, investment sales and
In addition, I match
tenants’ business objectives to real estate solutions. When a merchant is
considering entry into a new market, expansion in an established one, or
planning a new store concept, I offer strategic planning, site selection and
acquisition, as well as disposition services. My background in managing regional
malls, a luxury resort development and, recently, projects in receiverships gives
my clients a strong and unique advocacy.
HS: You're known in large part throughout
the CRE community for your work in the retail sector: what's the most exciting
thing happening in the sector these days?
The most exciting is the redefining of the relevance of the storefront.
Shoppers have experienced a mind shift, and the retail storefront is no longer the
crucial distribution point for merchants. Ultra-connected customers’ behaviors
are becoming as sophisticated as the mobile devices they use. Shoppers expect
to instantly consume information, services and merchandise at their moment of
need using the technology packed into their mobile devices. Therefore, more
retailers are using their storefronts as showrooms for the products they hope
consumers will then buy from them online.
According to a RBC
Capital Markets report outlined in a June 2013 CoStar article, retailers in the
financial services firm's database are planning to open 83,749 stores over the
next 24 months, and another 42,757 stores are planned to open over the following
12 months. Demand exists but the trend has been to scale back the
footprint by carrying less inventory and warehouse more merchandise at
industrial distribution facilities. Data centers are experiencing growth in
order to support more robust e-commerce activity. This trend is more apparent
in the big-box and junior-anchor components.
Indvik writes in a recent
article, “The retail stores of the future are hyper-efficient, digitally
enhanced showrooms that serve as physical storefronts for online operations.”
An example is Burberry’s 27,000 square foot London store – a
192-year-old building houses the convergence of brick-and-mortar with digital
elements to create a contextualized encounter with a 156-year-old brand.
HS: Give us a quick assessment of the
health of the retail sector and a project for it going forward.
opportunity exists now in retail where supply and demand are in relative
balance or, perhaps, at a minimum imbalance. Retail has stabilized and has
subdued potential in terms of yield and rent growth.
with medical use or storefront clinics will be healthier than ill-positioned
mixed-use projects. Shoppers are familiar with suburban shopping centers so the
migration to urban formats will be measured. Reis
Inc. projects improvement
late this year as rents and concessions are adjusting in favor of landlords. I
imagine that will continue for the foreseeable future.
HS: Fill in the blank: "If I didn't
work in commercial real estate, I'd be a _____."
… start-up guy
in enterprise technology or life sciences, which is where I started. I would
spend more time training at Gracie Jiu Jitsu and local boxing clubs.
However, by the
age of 43, my uncle worked his way from an accountant to a C-level role at a
REIT that later sold its U.S. mall portfolio to Westfield. He has been my
inspiration for working tirelessly in commercial real estate.