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– Veteran retail exec lauds rationalized, results-oriented approaches to retailing during BMO Capital Markets conference; points to positive change at Best Buy.

Improved offerings, robust digital and omni-channel capabilities, and optimized real estate footprints are yielding positive results for some retail chains despite doom-and-gloom headlines about the “retail apocalypse,” said Joe McKeska, President of Elkhorn Real Estate Partners, during a recent panel discussion at BMO Capital Markets’ 12th annual real estate conference.

While store closures get a lot of attention, the way in which many retailers are transforming their businesses to the benefit of consumers while improving their longer-term strength and stability is the more interesting story, McKeska said during the BMO (Bank of Montreal) conference in Chicago. The event attracted approximately 200 top executives from all sectors of the real estate industry, along with leaders from the BMO Capital Markets group.

A 25-year veteran of the U.S. retailing industry, McKeska lauded retailers’ attempts to remake their business models. In particular, he cited changes to distribution and supply chains that have enabled some chains to compete more effectively in multiple channels. Vulnerable chains should not simply give up and cede market share to Amazon, said McKeska, who formed Elkhorn earlier this year in partnership with Melville, N.Y.-based real estate firm A&G Realty Partners. The joint venture assists retailers and investors as they seek to maximize real estate portfolio performance in alignment with broader business strategies.

“Vulnerable chains need to identify and bolster their strengths, but in order to do that they will certainly need to have a strong plan, as well as the capital and resources to execute effectively,” McKeska said. “Fortunately, we already have some good examples of how to approach this type of transformation—Best Buy being a case in point.”

The panel discussion involving McKeska entitled “Amazon’s Amazing Impact on Real Estate” explored Amazon’s disruptive role—not just its effects on books, electronics, apparel and now grocery, but also on consumer expectations and shopping behavior generally.

Most observers think of electronics retail as having been thoroughly disrupted by Amazon, McKeska noted during the discussion, but Best Buy, for one, has adapted well. “By matching the lowest prices on the Internet, ramping up its Geek Squad and other services and optimizing its real estate, Best Buy has avoided the fate of Circuit City and is now holding its own in a very competitive retail channel,” McKeska said.

This strategy hinges on leveraging existing strengths—including investing in the best real estate in the portfolio—in ways that provide a competitive advantage, McKeska noted. “Best Buy had enough strength and moxie to reposition itself for the future,” he said. “While this approach isn’t guaranteed to succeed, and Best Buy did have some inherent opportunities to differentiate its business, it’s an example that can serve as a lesson for other chains.”

However, launching such strategies does require a clear-eyed assessment of challenges and opportunities, McKeska noted. “Consumer expectations today are that you can order anything at any time, from multiple different channels at no additional cost compared to purchases through traditional retail channels,” he said. “From the perspective of retailers, however, it’s critical to ask hard questions: At what point does your business model need to be rationalized and reality-based? To what degree are retail companies taking into account the higher costs of operating these alternative platforms?”

The key, if possible, is to develop a differentiated business strategy, including leveraging current infrastructure such as stores and warehouse facilities, to create a competitive advantage against online retailers, McKeska advised. “You have to evaluate your business model almost on a product-by-product basis within each category and retail channel,” he said. “How difficult will it be for those goods to move online? Will continuing to sell them through brick-and-mortar stores ultimately be more profitable and efficient? Or, otherwise, how quickly will sales of these products erode as they move online? These questions can no longer be put off.”

McKeska was joined on the panel by Tom Furphy, CEO of Consumer Equity Partners, and Jeremy Giles, President, Central Region, for Prologis. Jeremy Metz, Director, U.S. REIT Research, for BMO Capital Markets, moderated the discussion.


Press Contacts: At Parness & Associates Public Relations, Bill Parness, (732) 290-0121, or Lisa Kreda,


– In column for Real Estate Forum, Joe McKeska of Elkhorn Real Estate Partners cites need
for higher level of analysis in sector disturbed by Amazon and other players.

Shopping center landlords and other investors have long thought of the grocery sector as a “safe harbor” rooted in the reality that “everybody has to eat,” but the time has come to let go of this reassuring conception, writes Joe McKeska, President of Elkhorn Real Estate Partners, in the July/August issue of Real Estate Forum magazine.

“For anyone who invests in grocery-anchored real estate—whether a publicly traded shopping center REIT, private development companies, or your local neurologist and a few of his tennis buddies—it is important to recognize that the calculus required to maximize returns and minimize risk has changed dramatically from the simpler times that prevailed in preceding decades,” McKeska writes.

The 25-year grocery veteran headed real estate operations for Southeastern Grocers, LLC and Supervalu, Inc. prior to forming Elkhorn. A division of Melville, N.Y.-based real estate firm A&G Realty Partners, Elkhorn focuses on helping retailers and investors maximize their real estate portfolio performance in alignment with their broader business strategies.

In the Investors Corner column (“Grocery: A ‘Safe Harbor’ No More”), McKeska cites Amazon’s $13.7 billion acquisition of Whole Foods as well as the accelerating consolidation and general disruption that has marked grocery for the past few years.

To adapt, he cautions, developers and investors need to be more thoughtful and analytical about the types and nature of the grocery stores in their portfolios. “If picking winners in this sector used to be relatively easy—by, for example, closely watching financial strength and performance and new store growth and merger and acquisition trends—those days are gone,” McKeska writes.

In particular, he advises, investors should pay close attention to the ways in which different chains respond to these pressures. Importantly, many of the large, publicly traded chains in the United States are not spending less capital overall—they are simply spending less on net new store growth and focusing more on things such as cultivating ecommerce and digital capabilities or remodeling existing stores.

Longer term, the grocery-anchored sector is likely to confront many other changes, including so-called voice-activated and push-button retail; the rise of services such as Instacart or Blue Apron; and the continued proliferation of specialty channels, including hard discount, ethnic, and natural/organic, the advisor notes in the column.

“To keep pace with these tumultuous times, it is important for developers and investors to understand the market at multiple levels—macro, micro and everything in between,” McKeska writes. “They need to ramp up their overall level of analysis to make the right decisions about whether to buy, sell or hold.”

The goal should be to develop an integrated, data-driven pathway toward maximizing the value of all real estate assets and leases in the portfolio, he counsels, adding that strategic portfolio reviews need to happen much more frequently. “Armed with deeper insights from the use of ‘big data,’ forward-thinking developers and investors can have more confidence as they seek to determine when and how to respond to the rapid changes taking place,” he concludes. “This entails marrying well defined strategy with grocery market and trade area dynamics and the possibilities and limitations that exist relative to any individual real estate asset, whether involving value-add, redevelopment, acquisition, or disposition opportunities.”

To read the full article, go to:


Press Contacts: At Parness & Associates Public Relations, Bill Parness, (732) 290-0121, or Lisa Kreda,


-Newly launched Elkhorn Real Estate Partners takes a holistic approach to helping grocers, other retailers and investors maximize the value of their real estate portfolios.

OAK BROOK, Ill. AND MELVILLE, N.Y. (3/1/17) – A&G Realty Partners today announced the launch of a joint venture with Joe McKeska, a 25-year veteran of the grocery business who previously headed the real estate operations of Southeastern Grocers, LLC and Supervalu, Inc.

The new Oak Brook-based venture—Elkhorn Real Estate Partners–offers grocers, retailers of all types and investors an integrated, data-driven pathway toward maximizing the value of their real estate assets, said Andrew Graiser, Co-President of A&G Realty, a Melville, N.Y.-based real estate firm with offices in Chicago, Los Angeles and Philadelphia.

“Piecemeal approaches to real estate portfolios are simply not enough in today’s environment,” Graiser said. “Elkhorn brings together one of the leading strategic thinkers in the U.S. grocery sector with our nationally recognized capabilities in asset disposition, lease restructuring, valuations, acquisitions, strategic reinvestment, and retail property portfolio optimization. The end result is a truly holistic solution.”

Elkhorn will work to drive asset and portfolio value for retailers and investors in alignment with their broader business strategies via approaches such as:

  • Repositioning assets and portfolios, including identifying opportunities for new or replacement stores, redevelopment of existing stores, and strategic consolidations;
  • Recapitalizing assets in ways that leverage financial markets to increase capital availability;
  • Reinvesting in retail operating and real estate assets to improve performance, including creation of co-investment partnerships between landlords and tenants; and
  • Restructuring real estate assets in alignment with broader market and business plans through lease term, and/or ownership structure modifications and mitigation of surplus properties.

With his extensive background in business strategy, finance, mergers and acquisitions, and real estate operations and development, Elkhorn President McKeska “is ideally suited to guide the strategic efforts of grocers and other retailers,” commented A&G Co-President Emilio Amendola. “Joe has led the real estate strategies of some of the biggest supermarket companies. But his approach is relevant across all categories. It hinges on helping executive teams see beyond individual locations to maximize the strategic value of their overall portfolios.”

The new joint venture will leverage advanced data and analysis, including unique, location-based modeling and geospatial data. “Working with the best data firms in the business, Elkhorn merges leading-edge research with Joe’s decades of experience in retail strategy and analysis to create unique deliverables for our clients,” Amendola said. “The end result is enormously useful. It connects the dots to ensure that real estate portfolios truly support operational success.”

Over the course of his 25-year career, the Oak Brook-based McKeska has successfully developed, acquired, disposed of and managed over 130 million square feet of real estate and acted as a key leader in mergers and acquisitions valued in excess of $12 billion. Prior to Elkhorn, he served as Senior Vice President of Real Estate for Southeastern Grocers, which operates 750 stores in seven states under the Winn Dixie, Bi-Lo and Harvey’s banners. During his 17-year career with Supervalu, Inc. and predecessor entities, McKeska held top real estate positions, including Group Vice President of Real Estate. During his tenure, the $35 billion company maintained operations in 42 states, with 1,500 company-operated stores, 940 licensed stores and 2,700 independent stores serviced by its wholesale business.

According to McKeska, the challenges in today’s marketplace are such that retailers need to be both proactive and strategic about their real estate. He cites the recent chainwide shutdowns at Limited Stores and Sports Authority, and multiple store closures at Sears/Kmart and Macy’s, to name a few. In the grocery sector, meanwhile, new entrants such as Amazon Fresh, Lidl and a raft of specialty chains continue to ramp up the already intense competition, McKeska added. “With respect to real estate, the founders of Elkhorn are of one mind,” he said. “We understand that in today’s environment a strong retail business starts with a healthy real estate portfolio.”

A&G Realty was founded in 2012 by Graiser and Amendola, who have more than 50 years of combined experience in commercial real estate. While best known for its work with healthy and distressed companies in the retail sector, the firm broadened its scope in recent years to handle the disposition of warehouses/distribution centers, single and multi-family homes, and the sprawling campuses of for-profit and non-profit universities. Clients in the retail sector have included Sports Authority, Office Depot, CVS, Supervalu, The Great Atlantic & Pacific Tea Co., Pier1 Imports, Radio Shack, bebe, Aerosoles, and Ascena Retail Group.