By Ben Johnson
Shopping Centers Today – October 2017
It will come as no surprise that grocery-anchored shopping centers have been a favorite among investors for many years. Still, not all such centers are created equal, asserts Joseph McKeska, a grocery real estate specialist who formed Oak Brook, Ill.–based Elkhorn Real Estate Partners, in March to provide advice to retailers and investors in the sector. McKeska brings some 25 years of experience to the venture, having been SuperValu’s head of real estate for 17 of those years, and, more recently, senior vice president of real estate at Southeastern Grocers.
Elkhorn Real Estate was formed in partnership with Melville, N.Y.–based A&G Realty Partners. McKeska has a history of collaboration with A&G co-founders Andrew Graiser and Emilio Amendola, who had also co-founded DJM Realty back in 1992. “I developed a really deep, strong relationship with them and an appreciation for how they approach retail real estate,” said McKeska. “They always take a much more strategic view and approach by evaluating real estate issues in light of the broader business goals and opportunities, rather than as more-one-off transactional situations.”
Evidently, that relationship has only grown stronger and deeper, leading ultimately to this latest initiative. “Given our alignment and philosophy, given my years of retail executive experience and then given the major shifts that are taking place in the retail landscape and … in grocery more specifically, we collectively determined that there was a need for our services and the need for these types of services was going to continue to grow,” said McKeska.
The timing for this venture is right, McKeska says, because the rampant store growth of the past has given way to a focus on omni-channel retail. “Optimizing your real estate assets and your real estate portfolios — both on the retailer side and on the investor side, given all the changes that are taking place in the marketplace, and the uncertainty — becomes that much more important,” he said. “Consolidation in the industry is going to increase, and I think that’s the general consensus. On a broader basis, there is going to be a lot of pressure on grocery retailers in at least the short-to-intermediate term because of the overall general competitiveness of the marketplace — of which the Amazon–Whole Foods deal is the obvious one. When you layer in the online and omni-channel challenges, the companies that are further advanced have a relative competitive advantage.”
These trends are obviously important to the owners of grocery-anchored centers. “Three or four years ago, I think, people felt like grocery was much more immune to online competition,” McKeska said. “It’s very complex, and it’s very opaque for the average investor who doesn’t understand the grocery market. That is where our platform will come in and help them navigate those waters, because we can provide a much deeper level of insight across the board.”
By Ben Johnson