Face-lift, retail repositioning or mixed-use makeover? Fifteen college teams presented their plans to maximize value at a real-life retail development in the ICSC & UNC Retail Real Estate Case Competition Student at ICSC LAS VEGAS last month.
ICSC gave the student teams a week to tackle a case study developed by the Leonard W. Wood Center for Real Estate Studies at The University of North Carolina at Chapel Hill’s Kenan-Flagler business school with the help of Edens managing director Nicole Shiman. The challenge is based on a real-life scenario: how to boost the value of Edens’ 254,884-square-foot Shadowood Square in Boca Raton, Florida.
Given three years to hold the property before selling it, the teams decided whether to:
- give the center a face-lift and fill existing vacancies
- reposition it into a lifestyle center and upgrade the facade
- reposition it as mixed-use by selling a parcel to a multifamily developer
Retail properties around the country face similar options today, said ICSC Foundation director of University Partners and student engagement James Dulin. “Instead of creating scenarios based on something that occurred in the past, we were able to take a project Edens is currently redeveloping and give students a shot at it,” he said. “Sure, some parameters were pared down because the students only had a week to create their presentation, but they got as close to an active deal as possible placed in front of them. This learning opportunity is unmatched, and students took full advantage.”
Each team put together an in-depth presentation supporting its chosen strategy, including a property analysis, an implementation timeline, financials and an estimate of what the property’s value would be at the end of the hold period.
Students presented their plans on May 19 at ICSC LAS VEGAS. Participating schools were The University of Alabama; Baruch College; Cal State Fullerton; California State University, Northridge; University of Colorado Boulder; Colorado State University; Indiana University Bloomington; IUPUI; Marquette University; The University of Mississippi; The University of North Carolina at Chapel Hill; Rutgers Business School Newark and New Brunswick; The University of Texas at Austin; Tulane University; and Villanova University.
Preliminary round judges in the back row from left to right were Steerpoint Capital director of investments and development Jack Steger, First Washington Realty CEO Alex Nyhan, Peaceable Street Capital co-founder David Henry, Rappaport CEO Gary Rappaport, WPG CEO Christopher Conlon, Target regional real estate director Nick Pearce and Burlington Stores senior vice president of real estate, construction, store planning, store design and innovation Michael Shanahan. Rounding out the preliminary judges, in the front row from left to right, were Pine Tree vice president of property management Jasmyn Sylvester; Sembler vice president of leasing Eve Sembler; Citi managing director Jared Nutt; DataPoint International founder, president and CEO Kenneth Lamy; Colliers national director of retail services and practice groups Anjee Solanki; Phillips Edison & Co. vice president of property management Ran Meng; and Dollar Tree director of real estate Kien Tsoi.
The finals occurred on May 20, judged by ICSC COO Valerie Richardson, Sycamore Executive Advisors managing director Sandeep Mathrani, Bedrock chief investment officer Catherine Clark, Merlone Geier Partners managing partner Scott McPherson and Stirling Properties founder James Maurin. Among the preliminary- and final-round judges, Rappaport, Henry, Richardson, Mathrani and Maurin all are past ICSC chairs. Another past ICSC chair, Glenn Rufrano, who also chairs the ICSC Foundation and is executive chair of PREIT, announced the winners at the ICSC Student Member Reception that evening.
The first-place team, UNC at Chapel Hill, won $10,000 with its plan to add a courtyard and outdoor dining area to the property to cultivate a lifestyle center vibe and attract upscale tenants and shoppers. The team calculated that its redevelopment plan would result in a 13.92% internal rate of return on investment.
The winning team, The University of North Carolina at Chapel Hill, pictured at ICSC LAS VEGAS from left to right: Spencer Sabatino, Peyton Youth, Christina Steiner and Selden Baldwin
The complex and demanding nature of valuing, managing and leasing retail properties impressed the students. “My biggest takeaway from the case study is how dynamic the retail landscape and asset class is as a whole,” said Selden Baldwin, an undergrad and member of the first-place team. “There is so much flexibility in the type of tenant you choose and how you want to position an asset, which makes retail a really exciting asset class to be a part of.”
Second-place Indiana University Bloomington won $6,000. Pictured left to right are Alexander Dilkovski, Bryce Ott, Morgan Fanning and Justin Tuli.
Cal State Fullerton and The University of Mississippi tied for third place, each team winning $2,000. Pictured from left to right are Cal State Fullerton’s Natalie Nyaung, Daniil Rubio, Joseph Aranda and Eric Rangel.
ICSC Foundation chair Glenn Rufrano, at right; ICSC president and CEO Tom McGee, at left; and The University of Mississippi’s faculty sponsor, Charles Hilterbrand, second-from-left, joined the team for a photo. The students, from left to right, are Charles Mungan, John Cooper, Caroline Taylor and Spencer Cookson.
The ICSC Foundation conducts two student case competitions a year: the ICSC & UNC Retail Real Estate Case Competition in May at ICSC LAS VEGAS and the ICSC Foundation Real Estate Challenge in November, which is virtual. For more information on the ICSC Foundation’s programs, click here.
More on ICSC’s Student Competitions
What Would You Do? A 128,000-Square-Foot Marketplace, 63% Occupied, Is for Sale in a Growing Neighborhood
Fresh Ideas: How Would Students Revitalize a Foundering Mall?
ICSC Helps Students Get out of the Classroom and into the Action in Las Vegas
By Brannon Boswell
Executive Editor, Commerce + Communities Today