Retail duo aims to inspire next generation with team approach

You see their signs all over Kansas City —now here’s your chance to get to know Kayla Gilchrist and Alli Moran of Colliers International Retail Services Division even better— as the power pair is this week’s MWM Broker Spotlight.

With a two-year partnership and perspective on rent relief, the retail market fluctuations, and the creativity of landlords and tenants alike, the duo caught our attention as we approach Q4 and 2022.

MWM: Why Retail?

Kayla – Being able to look at a shopping center and see the results of your work come to life can be very gratifying. I enjoy meeting national real estate directors, learning all the intricacies about what retailers look for and going on market tours. 

Alli –Following emerging trends and watching retail evolves through ever-changing economic climates is my focus. Attending national conventions such as the International Council of Shopping Centers (ICSC) conference is a great way to network with other retailers and brokers from across the country.

MWM: What challenges and opportunities is Retail facing now?

Kayla - There is a ton of inventory on the market so landlords may have to be flexible on rents and other concessions to get more attraction. Drive-throughs are a sought-after commodity– existing infrastructure and A+ pad sites that can accommodate such are mostly flying off the shelves.

Alli – The challenges include finding tenants for junior and big-box spaces as so many of these retailers are decreasing their overall footprints/number of locations or filing for bankruptcy. Larger full-service, dine-in restaurants that were popular years ago are becoming more difficult to backfill due to Covid and the desire for more convenience-related options including pick-up windows and delivery. Opportunities include Landlords and developers getting more creative with adding patios, drive-thrus, and pick-up windows to existing buildings as well as new construction. We’ve seen an uptick in healthcare tenants leasing retail space so it will be interesting to see how that progresses into the future.

MWM: Tell us about a few market trends you are experiencing with your clients?

Kayla/Alli – With the Covid restrictions in place, most people missed going to restaurants, bars, entertainment users, etc. We foresee these tenants becoming busier than ever. There has been an uptick in prospective tenants seeking second-generation restaurant spaces but in smaller footprints. There are still quite a few national retailers that have not recovered – the most difficult vacancies to fill lately seem to be junior anchor/big-box spaces in power centers and lifestyle centers. There has been some movement with larger discount users, but their rent requirements are generally difficult to meet for landlords. Second generation restaurants under 3,000sf, drive-thru capable buildings, and pad sites are seeing the most activity in our portfolio.

MWM: What have you done to adapt to the changes in CRE?

Kayla – I believe the 2007-08 Financial Crisis prepared us for a worst-case scenario in this industry. It was always in the back of our minds that another disruption would surface but this event was not an easy one to navigate for traditional retail. For our vacancies, we began to focus on users that were still doing well despite the pandemic – medical, fast food, liquor stores, hardware/home improvement users and dollar stores to name a few. There may still be tenants requesting rent relief and we are advising landlords to work with tenants during this time if they can provide proof of a significant loss in sales during the pandemic.

Alli – I have done a lot of reading and listening to podcasts of other veterans in the industry that I admire. It’s also nice to have other senior brokers in our Colliers office to seek advice from as well. There will always be ups and downs in every asset class and I think it’s good to be mentally prepared for the good days along with the bad days. During the Covid shutdown, we had to almost stop prospecting altogether and slowly start back up overtime with the few retailers that were prospering at the time i.e., discount retailers, pizza, liquor, etc. Staying educated and up to date on the latest trends is a huge key to success for brokers and our retail clientele alike.

MWM: Can you share any other current and future projections with us?

Kayla - If construction prices continue to rise, I believe the vacancies in our existing centers will be going down. There is still really no timeline for when the market will be back to how it was pre-covid but there is no doubt we are receiving significantly more activity than what we were a few months ago. 

Alli – Mobile apps will become more effective and evolve to serve retail consumers in different ways. I believe we will continue to see more and more healthcare Tenants leasing retail space. Lastly, I think retailers will continue to adjust to the ever-changing landscape and stay hungry for new deals.

Q:  What leads do you look for?

Kayla/Alli – In our line of business, we look for local and national tenants that are actively expanding, downsizing, or relocating. A portion of our time is also allocated to researching the comparable markets (Oklahoma City, St. Louis, Denver, Omaha) to see what types of tenants may be looking to hit our market. On the landlord side of the transaction, we assist with the leasing and/or sales process. Often, we assist a client with leasing their first space – it’s fulfilling to help small businesses bring their dreams to life.

MWM: How did you get started/interested in CRE brokerage?

Kayla – I started in the industry in 2017 after graduating from KU. My mom, Marty Gilchrist, has been a commercial realtor for over 20 years so I had the chance to grow up around the business and get a flavor for how rewarding this career path can be. Commission-based jobs are not always easy, but it is motivating (and genuinely fun in the process). Two years ago, I met Alli Moran at my previous firm and we decided to become partners going forward. Not many people get to work with one of their best friends, so I feel very fortunate! We focus on Tenant/Landlord representation across the Kansas City MSA. A few of our clients include Hibbett Sports, Supercuts, Self Esteem Brands, Jack in the Box, etc.  About 3 or 4 times a year we will travel to ICSC conferences to connect with different accounts and retail brokers across the country. 

Alli – I began my career in commercial real estate brokerage in 2018. I grew up in the business as my dad was an investor involved mainly in neighborhood retail centers and single Tenant fast food/QSR buildings. After a couple of years of feeling unfulfilled in my accounting job and while pursuing my MBA I decided to take the leap into CRE in hopes of finding a career I could be passionate about and I’m so glad I did! I do about half Tenant representation and half Landlord representation with a few sales in between. Most of my day is spent prospecting, reporting to clients, and researching market trends. I met Kayla through her mom, Marty, and we discovered we shared a similar passion for CRE, retail, and having fun. We’ve been partners for a little over two years!

MWM: What do you see the local and national CRE future including?

Kayla – Gyms, restaurants, bars, and entertainment concepts. 

Alli – Restaurants, healthcare Tenants, and tourism-related businesses. We’ve seen a lot of entrepreneurs come out of Covid. People who may have lost their job are getting creative and starting their own businesses.

The Colliers pair can be reached at kayla.gilchrist@colliers.com or alli.moran@colliers.com . For additional information, visit https://www.colliers.com/en/news/kansas-city/kayla-gilchrist-and-alli-moran.

All eyes focused on Kansas City CRE wins

Last week at CCIM Kansas City’s monthly meeting, Michael Berenbom, managing partner, LANE4 Property Group; Jon Copaken, principal, Copaken Brooks; John McGurk, vice president of development, Milhaus; and Ora Reynolds, president, and CEO, Hunt Midwest, joined moderator Tim Cowden, president and CEO of Kansas City Area Development Council (KCADC), for a discussion of the state of the Kansas City market for the four major asset classes represented by the panel.

The panelists each spoke to the Kansas City projects that have them most excited. Reynolds began with Hunt Midwest’s logistics and industrial footprint and its continuing rapid growth.

“Definitely this cycle and people have written about it, is so different.  The cycle there can be a two-year cycle from when you source a deal to when you build it and lease it, instead of what took a 5, 10, 15-year cycle.  You tend to know what you have when you start with industrial when you start with a building.  You know when the end goal is,” said Reynolds.

Berenbom said he is excited about downtown Lee’s Summit.  

“Whether it’s office or retail we’re looking at, location matters, character matters, neighborhood matters, and downtown Lee’s Summit is one of those neighborhoods that has it.  Sometimes it’s hard to articulate exactly what that is, but we all know if we go spend time down there,” he said.

Copaken spoke about residential development, especially downtown, which has seen continued growth.  But, he’s especially pumped about the renewed discussion of a downtown baseball stadium.

“That’s the catalytic project that can really push things over the edge for the whole city.   It’s good to see that there’s ownership and people actually interested in making something happen,” said Copaken.

McGurk is looking forward to the streetcar extension. He also said he’s starting to see some really healthy rent growth in the multifamily market across the entire metro area, which historically has been a cheap housing market. 

“You’re also starting to see a lot of supply fall off a cliff.  Five years ago you would hear of 12, 15 projects in downtown.  Well, there are maybe three or four that are going to be under construction and delivering in the next three years.  Supply’s really falling off which is just going to increase that rent growth . . . . It’s harder to do deals, but the juice is worth that squeeze probably,” McGurk said.

However, McGurk believes there will continue to be a demand for multifamily housing.  He noted that there is a lack of availability of single-family houses, but also many millennial tenants like the multifamily lifestyle. 

“They like having new, and they like having all the amenities. It’s just a different generation and I’m sure it will change.  Household formation is mid-30s, late-30s now. I’m not saying we’ll have an oversupply in 15 or 20 years, but I think there’s a lot of runway still for sure in multifamily,” said McGurk.

Reynolds said the pandemic accelerated every trend for industrial, with brick and mortar retail moving to warehouse.  But, the pandemic also created supply chain issues.

“It used to be all about just-in-time inventory.  That was it.  Let’s be efficient.  Now it’s just-in-case.  It’s safety stock.  We need it, and we need redundancy as opposed to just in time, which has been amazing for the industrial world,” Reynolds said.

Berenbom said LANE4’s retail product held up well during COVID because LANE4 had the right type of retail assets—the neighborhood, service, convenience-based product.

“And I think that more and more we’re realizing that retail is an integral last-mile solution for a lot of people.  There’s a lot of products where free delivery on your doorstep works, and we’re learning that there are some that don’t.  And we’re learning other ones, like haircuts, are hard to do online,” Berenbom said.

Copaken said the effects of COVID are continuing for the office market.  The uncertainty of the market makes it hard for landlords to do business, especially as tenants ponder lease renewals and change in space needs.

“I think it’s really going to be a tough year for existing landlords to keep, maintain and figure out what to do with their existing tenants.  And, it’s going to be a tough year to work on new projects. The dynamics are not in our favor right now.  They’re really in the favor of tenants,” Copaken said.

Copaken said his firm is trying to create environments that are unique, that people want to be part of and that tenants will pay up to be part of.

“So, we’re renovating, we’re spending money, we’re improving assets.  That’s kind of the only bet we can make.. We’ve decided to put in improvements that make our older buildings as if they were new, and appeal to people who are definitely going to have to pay something more but they’re going to have to pay something more for that quality they want,” he said.