Panera in Shrewsbury, MA with Ben Kaplan
Guest: Ben Kaplan
Topics: California Pizza Kitchen, Panera Bread
Transcript:
Chris Ressa 0:05
Welcome to retail retold everyone today we have Ben Kaplan. Ben is the head of real estate development and facilities for Hamra enterprises. Ben has been in the commercial real estate industry for about 34 years, spending time on the landlord side at Mesa rich, he’s done brokerage. He was at California Pizza Kitchen. And now most recently, he’s the head of real estate development facilities for hammer enterprises. Welcome to the show, Ben.
Ben Kaplan 0:34
Thanks, Chris. It’s great to be here. I feel privileged. Also, I feel privileged. Then tell us a little bit
Ressa 0:44
about your career
and what you’ve done. And just a little insight on hammer enterprises and what hammer enterprises does.
Kaplan 0:52
Sure, I’d be glad to. I wrote a few notes here, because it’s been a long career. You know, graduating in, let’s see 819 85. With a business management degree, I decided to I had no clue what I was going to get into. And my, my wife have now 34 years, I was dating, and right out of college. And her brother was in the shopping center development business here in Boston. So I figured you know what, maybe I should get into real estate. So I did. So first job was a property manager with a condo management company here and cheap Brookline mass, did that for about a year. And then I changed I went to work for a condo developer, converting apartment complexes into condos before the tax laws changed. And, you know, you get investors buying these units left and right. I did that for a little over a year. And then I went to work for a national syndicator of apartments and acquisitions. It was for a very young age, it was a really cool job. He had a private jet. And we would fly around the country looking at 234 500 unit complexes in ours. So that was kind of the start in real estate for me. And then I hung up my own shingle. And my niche was had an office in Brookline mass, and my niche was going out looking to buy small little retail store blocks, and little strip centers. And back then non recourse financing was available. So you could get it from lenders, but you could also get second mortgages from sellers. So it’s that great story of being able to buy real estate, commercial real estate, with basically no money down. And the way I had set it up was I would only buy it if I could drive to it within a couple hours. Because not only did I acquire it myself, I managed it myself. And then I leased it myself. And the leasing. It was something that really clicked right away from small little strips and small little store blocks, leasing to banks, that video stores, so restaurants, you know, the subways of the world and so on. So I really liked leasing. So then kind of downturn happened and then financing became very difficult and challenging. I decided to get into the fi business and partner up with somebody that had just started a brokerage company in Cambridge mass called national commercial brokers. And so I partnered up with them and we were partners for a little over 12 years. And I got that’s when I really started getting into the retail representation and the restaurant representation. first started in retail Hollywood Video was one of my first clients. Wow, it was a great learning experience being a broker. If anybody listening had as did any work with them, they they pretty much outsourced all of their real estate department to brokers. So you had to put the fight packs together and basically it kept me busy. However, I always even at that point, like restaurants and a foodie like a lot of us right and I’m sure Chris here yeah like foodie foodie, especially in this business, right. So I started to want to represent restaurant. So one of our first clients after basically working with a print and early franchisee have an Our bread here in Boston in New England. As a broker, I basically hounded him for about a year. And finally he said, Okay, Ben, why don’t you represent us? So that’s when it all started, started representing him. And then another franchisee, and so on. So I did that for 12 years. And then then the crazy thing happened. I basically with my wife, and only child daughter, who was 12 years old, all from New England, decided to make a big change and move out to Scottsdale Arizona. And, you know, wasn’t really sure what I was going to do loved real estate. And being a broker, I basically was thinking I could either go on the developer landlord side, or actually work for a tenant. So I ended up going out and hooked up with mace rich. Mace Rich was the last breed to form a national restaurant leasing group. They were still doing the restaurant leasing, unlike other large REITs by, you know, VPS or real estate that were managing the malls, right and overshooting the malls for leasing, and didn’t think that it was necessary to have specialized restaurant leasing folks. Perfect timing. So I go out there, they had an office in Phoenix. They’re based in Santa Monica, and they had just bought West core, which was the largest mall developer in in Arizona. So they hired me, I formed a group, and I was there for almost five years, and running the restaurant leasing. I was like a kid in a candy store. I had 80 million square feet of existing property to oversee 20 million under development. And I had a great team and alls I did every week was fly around the country, doing restaurant deals and making lots of friends and had a blast. So did that. And then I ended up consulting while Cpk California Pizza Kitchen. I in representative and back in my brokerage days, Rick Rosenfield, and Larry flax, a lot of people probably listening to this know their whole success story and so on. So they talked me into coming to work for him. So I did, and I left mace Rich and I worked for them for a little over a year. For a lot of different reasons. It didn’t work out. So I started my own consulting business, right when the recession hit about 12 years ago. Yeah, and I did that for two years. And I was consulting, representing landlords that had started building these large developed retail developments that needed restaurant deals, and there weren’t many of them. I would represent some restaurant companies around the country that still we’re expanding, taking advantage of an opportunity. So I did that for a couple years out, and I was living in Scottsdale, and Arizona. Our only child, my daughter decides she wants to go to college back in New England and Boston. So what did we do? We packed up and we’re moving back to Boston back home. So we did that and Panera corporate, who I had long tenure relationship with being their broker, and so on, offered me a job said when he come back with a relocation and you’ll handle the real estate for Panera corporate from basically the Northeast. So really from New York, through New England, up to through through Toronto and Ottawa. Still to this day is the only location outside of the country where there are Panera Bread cafe. So I was there for about two years and had a blast. I mean, I did 40 corporate deals in two years. It was great back when Panera was exploding. So ended up leaving Panera and then hooked up with Hamra where I’m at today, sorry, long winded.
Ressa 9:21
No, it’s great perspective that you know, good to see how a career you know, shapes up. And so what is hammer do?
Kaplan 9:30
So hammer so owned by the hammer family based out of Springfield, Missouri. When I joined the company almost eight years ago, they had 72 restaurants, between Panera Bread and Wendy’s were very large franchisees of Panera and Wendy’s. We are a franchisee also of noodles and company and still in St. Louis. We have nine stores. But when I joined them a years ago, we had a total of 72 stores. today. We have 172. Wow, that’s been both through organic growth and acquisitions. You know, Wendy’s refranchising selling back to franchisees, same thing with Panera. So it’s been, it’s been a lot of fun. Obviously now it’s an interesting time with it within the eight years I’ve been with my camera, but it’s been a lot of fun and obviously the Panera brand is something throughout my entire career. I’ve worn different hats. When it comes to Panera from, you know, broker to landlord to working for Panera corporate. And now with one of the largest franchisees, I have had
Ressa 10:52
on this show a bunch of real estate,
corporate real estate folks that work for franchisors, and I’ve had some small or medium sized franchisees that they kind of do their own real
Kaplan 11:06
estate. But we have very few
Ressa 11:10
that on the show so far that have been a large enough franchisee where they’ve had their own real estate person. And so
can you walk us through what
your relationship is like with Panera? What is the interaction between the head of real estate at a franchisee? And the real estate team met at the franchisor?
Kaplan 11:33
Yeah, that’s a great question, Chris. Um, Panera Bread. A lot of their success I have to start this way has been that outside of our industry. Most guests have no clue that it’s not one company. Right? I mean, you did and that’s, so I have to start that way. But it is interesting. There are a lot of Panera franchisees that have somebody like me, within their company, right? A lot of I would say the majority of franchisees have exclusive broker relationships when it comes to site selection and all that. But my camera who hired me almost eight years ago it was an opportunity he saw that with my background. And again, being the broker being the landlord working for Panera corporate. It was, you know, pretty good bet on his part that, you know, being understanding how to grow and expand the brand, right as far as site selection as far as understanding all aspects of the business and so on. So it’s yeah, it’s, it’s, it’s been it’s been great. What on a on a typical deal.
Ressa 13:06
What type of interaction do you have to have with Panera corporate?
Kaplan 13:10
Yeah, so Panera corporate, traditionally has always had an in house real estate team. And again, I was in house for two years. And the relationship between the franchisee, and corporate real estate is more of a kind of guidance, kind of meeting with the franchisees to give them the knowledge of you know, what their, what their requirements should be the size of the cafe, the demographics, Panera corporate, one of the things that they did initially, which was really smart was they have their own strategy team that basically does modeling and sales forecasting, but also really breaks down demographics, et cetera. So they offer that up to franchisees to be able to give them market plans, that kind of, besides from a high level to look at any given trade area and give direction if that’s the right type of trade area for them.
Ressa 14:23
Do you have like a month? Yeah.
Kaplan 14:26
Speak. So sure. They have, they have annual meetings, that basically the they’re they’re kind of they weren’t called like family reunions at one point. And basically, it breaks down into sessions. So all the franchisees can meet with corporate real estate folks. Like, you know, ICSC that we’re so familiar with, right those conferences every year that I’ve gone. There’s always like for me now I always end up hooking up with a bunch of folks from from Panera corporate real estate right? And get together and we have kind of off site meetings and kind of discuss the future. Like right now I had a call earlier today with somebody at an LLC corporate, in real estate to discuss some of the thinking around how we’re going to change and with the with with this whole current situation. I mean, there’s a lot of that being discussed now. Right, because, you know, larger dining rooms, smaller dining rooms, you know, and I could get into that. So, there’s been, I will say this, working with a lot of different brands, I think that is been a real strength for Panera to understand that right from the beginning. Because they did start franchising to area developers right away when Ron shake, went out and bought St. Louis Bread Company, the way to expand and then turned it in a Panera was realizing the power of the real estate development team and corporate working with the franchisees
got it makes sense. That’s a good place
Ressa 16:19
to pivot. And you mentioned small, big dining rooms, what’s going on in food and beverage today? How are you looking at the world? What are you thinking about coming out of the pandemic
with food and beverage?
Kaplan 16:29
Yeah, sure. You know, I want to share this with you, Chris, because, you know, since you know, everything hit at the end of March, I keep saying this to a lot of friends and landlords and other tenants and so on talking to when it comes and you know, look, one of the things that I’ve been really busy with, on my side of things is working with landlords to try to figure out rent, right, and how we can partner up to work with each other when, you know, initially in April, and this is pretty much known out there that business for a lot of the restaurant food beverage either just stopped 100% or, or was down 85%. So when you’re down and with sales, 85% or even, you know, having to close a store, how do you afford to pay rent? So what the way I’ve said it to a lot of folks, and I still feel this way is that in my entire career, that like a seesaw, right? There was always maybe Kristin, your you know, your long career already, right? Realizing how young you are, today or yesterday is it was always tilted one way or another a little bit, it was more leverage from the landlord standpoint, more leverage from the tenant. I’ve never in my career was like, when an end of March and beginning of April, it was level. It’s like what I would say is you know what, with landlord friends and people that I still call friends, even though we really haven’t agreed to disagree on the rent issue is we’re in the same boat together. And it’s got tons of holes in it. And alls we’re trying to do together is plug up those holes so we can survive. Right? So my world from from restaurant and beverage and so on, from the real estate deal making standpoint and rent and all that conversations are continuing that way. As far as what I’m what I feel, besides my career. I’m also a concept jump. Chris, you and I haven’t even talked about that as yeah, I’ve almost I have I don’t think I ever will I always say I’ve kind of started a book about concepts. And even even named it a call. I called it a chain too early. You know, if you’ve put that in perspective, what we’re talking about, I feel so bad for one off and local, you know, restaurants that were just getting going right. And with this and having a shutdown. I just I it’s sad. It’s sad to see what the raiders and owners are going through right now.
Ressa 19:33
Totally tough time.
What is the cafe of the future look like? You mentioned small, bigger dining rooms, you know, and I’ve heard the same right. Some people think the dining room has to be bigger to space people out. Some people think it has to be smaller than do more takeout and
pick up. Yeah, what’s going on? What is the diagram the future look like?
Kaplan 19:53
Great question. Depends what segment you’re in. Right. So, you know, again, I’ve kind of been so right today. With Wendy’s fast food, and then with Panera, right fast casual noodles and company, Panera, I’ll say, you know, Panera. Even before this COVID crisis, the business had been pivoting and shifting for years. And a lot of it was what we call outside of the firewall business, right? From catering to rapid pickup to delivery to, you know, all those aspects of the business. So when it came to when it comes to fast casual, you’ll, you know, that was already occurring. So it was a lot easier to pivot when all of the dining rooms had a close, right. As far as the fast food goes, and then I’ll get to your a, again, gives you the answer. I know this is only so long again. That’s what I was worried about. We could go on forever, for sure. When it comes to Wendy’s, right, I mean, you know, the impact of business hasn’t been impacted as much. Because so much already is based off a drive thru.
Ressa 21:11
Right. What is the average Wendy’s drive thru? So
Kaplan 21:14
percentage, it can be over 60%
Ressa 21:17
An average Wendy’s 1516 these days? Yeah, it’s a little little higher. A little higher than that. Okay. Yeah. Yeah. And and Panera has this ambiance, this,
I want to sit down and work and have a cup of coffee and go up and refill my coffee, and maybe I’ll
grab a bagel. How does that all play out with this? I
know you got to try to do more. But you still have that core customer that wants to come in, sit in that nice comfy chair and pull their laptop on top of them and sit for a couple hours.
Kaplan 21:53
What happened to that customer? You know, it’s interesting, Chris, you know, the business has changed. And, you know, we’re talking almost three decades, right? For the brand. And early on. That’s what it was all about. It was about you know, and it still is but like the chill period, right? I don’t know if you’ve ever heard that. But chill period is between breakfast and lunch, lunch and dinner, dinner and clothes. You know, traditionally Panera in the past 30% of its business was killed. And that’s exactly who you’re talking about. I had no idea I wanted to get together for meetings or just like the Wi Fi the Wi Fi. I mean, when Panera first got going, I was one of the first brands to offer free Wi Fi. Right? You know, so an internet. So, you know, what’s interesting is Panera still is that cafe, right that people like to hang out and so on. But it’s kind of like, let me let me pivot a second Starbucks, right? Look what Starbucks is doing lately, which is really fascinating to me. They’re now thinking, You know what, we, we really need to start going back to the good old days of to go and pick up and you know, the larger stores that have a lot of soft seating and they were going to the food component there now pivoting back to the way they were because, you know, how do I say this without saying that because I look I don’t want to sound like I don’t want those guests to come and hang out for hours and have meetings and do all that it’s still always going to be part of Panera. But from a financial modeling standpoint, you know, think about it. Dining Rooms cost money for an operator right and fast casual and fast food so to operate to clean to all that so if you can continue to get your fast casual and fast food business outside of the four walls, and it’s almost the old theory of like, from a what was the concept rallies? Burgers, do you remember? They just drive? Sure. You know why? Why do you need an inn? Why do you need a dining room now I’m not saying Panera is gonna go into that but in my entire career with an era they’ve gone their prototype square footage has gone from right out of the chute it was in the low 4000s At one point it was well over 5000 square feet before COVID It was getting closer to 4000 and I could see it going even smaller and it we’re really talking about the dining room not the not the back of house not the kitchen area.
Ressa 24:40
But what but what do you do with it? If that’s the case? You have all this
existing infrastructure have all these locations that are there bigger so how do you handle that? You can’t just move every location tomorrow.
Kaplan 24:54
No no no right? So you know what, when it comes to Panera again, it’s not we Will and we will get the dining room business back. Because that that’s that’s a given I mean people and that’s been one of Panera strength, right of people that during the day want to hang out somewhere and have a cup of coffee or have a have a pastry or, you know, sandwich salad soup or whatever. But people like hanging out so that that really is going to come back that’s not going to change. So the existing cafes that have all these seating, it’s not like those need to go away. But what the difference though is, when it comes to new development going forward, if you can build smaller footprint, think about the investment that just makes deals. It makes deals. hurdle makes more sense, right? If you can, and especially in markets where you’re kind of have a lot of stores already like Chicago, for example, we have we just opened, right but in January our 41st Panera, right, so and company also has a lot of Chicago. So we want to expand there. So maybe if we have a smaller footprint going forward, it would make it a lot more, it would make a lot easier to be able to continue to expand and grow.
Ressa 26:30
Sure makes sense. Appreciate the context. Overall. How do you think consumers over the next 12 months are going to feel about going in the dining room at any restaurant, not
Kaplan 26:47
just Panera. Right. I’ll say it this way. I always and maybe not so much from Panera, but they have a Panera too. It’s the overall experience, right? People always fascinates me. I always think that the only reason I’ll go to a restaurant is because of the food. And, you know, sure, first and foremost, if they don’t like the food, they’re not going to go. But it’s really it’s almost like theater, right? Look at it that way that people like the overall experience. And what really concerns me is sure we can be smart about it. We can physically distance I hate social distance. It’s physically distancing. We can wear masks, we can, you know, do things that wash our hands and all that. But I just don’t see it till we can get 100% through this and get rid of all the masks and not feel like we need to wear those and create that atmosphere again, that that’s going to be I think, really difficult for operators and restaurant tours, to get people to come in that want the overall experience. I just that concerns me. Especially for the higher price. Restaurants and the nicer restaurants.
Ressa 28:09
Yeah, the fine dining for sure. Fine dining. Right. All right. Well, that’s some good insights from someone who’s in it every day. I want to pivot now to Shrewsbury Massachusetts, where you have a story about a Panera that opened, why don’t you start to tell us that story?
Kaplan 28:27
Yeah, so back in my brokerage days with national commercial brokers, when I first jumped into that world of the FIE business, and loving, you know, like I said, I loved when I was buying my own properties. My favorite thing to do besides making money was was leasing and just working with people. I’ve always been a people person. So that was, you know, so I enjoyed getting into the brokerage business. One of my first clients was Hollywood Video, non food, but my first my first client in the food world was Panera Bread and Ron shake had basically had just the from Oban Pong days here in Boston, had went out bought St. Louis Bread Company, and then quickly changed the name over to Panera crest. I bet you don’t know this. Do you know why they changed from St. Louis Bread Company to Panera Bread? No, please tell us. I love this story. So basically, in St. Louis, by the way, where their headquarters still is. They still call them St. Louis Bread Company. They that’s the only market that they’ve never changed to Panera Bread. So the reason is they the first two markets that they opened up St. Louis Bread Company outside was Chicago and Atlanta, and in Chicago, once they put the word St. Louis in there, because of the baseball rivalry between the Cubs and St. Louis, right. People did not go into the store because it was called St. Louis Bread Company. So he quickly, Ron and senior team quickly came up with pan up and came up with Panera. So that’s how the name changed. And up. Yeah. Yeah. Got it. Very cool. Anyway, so Shrewsbury. So I’m getting into the brokerage business, and one of the franchisees, one of the original ones here in Boston today, he’s still his name is Mitch Roberts, PR restaurant. He used to be the head of real estate with Auburn pond with Ron shake. And when Ron basically decided to start franchising right away, the Panera brand, he and a partner of his became a franchisee hear that today, they think they own over 60 here in New England. So being in the brokerage business, you know, I had to be aggressive to try to get clients and I really was fascinated by the brand. He opened up a couple of them. And he didn’t have an exclusive broker. He is working with a couple of different brokers and I kept hounding him. I hounded him for almost almost a year. And he finally said to me, bad and he knew, so I was I was born and raised and Springfield, Mass, which is 90 miles west of Boston. And he had that entire territory, including, you know, around Boston, and in western, which is where Shrewsbury is. So he basically said to me, you know, what, I’m going to give you Wister west to Springfield, where you grew up. So within 30 days a month, we found this site in Shrewsbury, and White City, and it’s an inline space, and we did the deal. And, you know, the deal went smoothly. And all of a sudden after that deal, and once he opened up and started realizing what a good site it was, what a good deal we had negotiated. He basically came to myself and my partner and said, you have my whole territory. But within six months after that, there was another franchisee in New England. He came to us and we started representing them. Within another six months, company corporate had Connecticut where they were doing company stores versus franchise came to us to represent them. So all of a sudden, that one deal and Shrewsbury which was in line, which is still there today. And it’s still it’s not it doesn’t have a drive thru, which we could talk a lot about that that’s kind of been in the last 10 years for Panera initiative if you can get a drive thru to do it. But that’s an old in line store that still to this day does a great business has no visibility of the street when Panera when we first started representing Panera, and if a lot of folks probably listening if they’re, you know, sure there are a lot of people listening. Panera initially could really go anywhere within a center, it didn’t need to be front and center. It didn’t need to be visible because it was such a powerful brand and something new. When it first came out once the word would spread about it. People would go into it and it didn’t need to be an end cap or or whatever. So that deal was the first Panera Bread deal I did. And then if you look, you know, through my career, right? Not only did I represent them here, then when I went to this is interesting when I took the matrix job. There’s a concept out there that was on fire called Paradise Bakery. I’m not sure if Chris if you’ve ever heard Paradise Bay,
Ressa 34:08
they’re a tenant of mine. Are they tonight? Cool.
Kaplan 34:11
So that’s this is a good story. So when I first went out to take the job of Mesa, Mesa Ridge, West Corp. Danny Patterson, who started Paradise Bakery, lived in Phoenix, and basically was a tenant with West Corp and a lot of their centers. So here I come out from Boston, loving Panera and I’m a Panera snob, and I was like Paradise Bakery. You know, they don’t compare well, within a couple months. I became very good friends with Danny Patterson, who’s a great guy by the way. He’s been far out of the business. So I’m doing Paradise Bakery deals and and in Phoenix and, and Arizona. And right when I had done a couple of deals Ron Shea comes in and buys it. So a couple of deals that I had done actually midstream already had Paradise Bakery signs up, and so on. And they were changing them to Panera, but then they backed off of it, because they ended up keeping the Paradise Bakery name up until I think only a couple years ago. So doing that, right, and then a corporate store and me working for Panera, corporate, and so on. And let’s go, let’s go back
Ressa 35:33
to that first store. powerful message that that one, that one, you worked for a year to get the account, you got the account that one deal led to many more opportunities for you.
Unknown Speaker 35:48
Right? What
Ressa 35:52
did you do in your opinion that you think got you
Kaplan 35:57
all that other business? That’s great question for us.
I would say this. One of the things that I really liked about the brokerage business was and I think kind of helped me become a little different as a broker in a lot of ways and gave me an advantage was, I really did immediately. Really take the time to understand the concept, the brand, the person, right? I really, because when I first started representing them, and did that deal, majority of people didn’t know what Panera Bread was. They basically said, I remember a lot of landlords saying to me, when I was introducing the brand is like a bakery concept for you know, 4500 square feet. You know what doesn’t exist? I mean, what is so I really had to educate the landlords and I took the time to do it. And I think that really Matt that’s a
Ressa 37:06
that’s a great tip for landlords out there are for brokers out there to educate the landlords on the brand. Anything in particular about that deal that was you know, unique about the lease about the negotiation with the landlord.
Kaplan 37:22
That landlord may rest in peace be very successful, even to this day, it’s, uh, you know, Shrewsbury, if anyone knows the area, and they’ve White City, the centers on two sides of the street. It’s typical power center with plenty of fast casual, fast food restaurants to grocery, etc. And it’s right at the gateway of Western, which is the second largest city in Massachusetts. And it was always a very, very successful center, owned by an individual trying to I forget his name,
was a very store, maybe
he was a he was a nutcase. He basically had an office, that I think that was his only center that he owned. And he basically made a living off to this center. And I remember and being, at that point, kind of a grumpy old man, who basically was really tough, really tough to negotiate. And that was another thing. You know, you’re asking these questions. It besides educating Aman Pinera, which was interesting, it was also it was, it wasn’t difficult for me to always be able to sit down with somebody and kind of listen to them. What what they, you know, when you’re negotiating a deal, right? And that’s kind of what this is all about is, you know, deal making and so on. To me. It’s always been about listening to the person you’re negotiating with, and understanding what their their hot buttons are what they want. And, you know, I remember going out now this is so long ago, but I remember going out there multiple times. And sitting down with him. There’s a he loves pizza. There’s a Papa Geno’s, I’m not sure if it’s still in there. Papa Geno’s unfortunately, is kind of a dying brand. But, you know, growing up here are anybody. I don’t know. You’re probably familiar with Papa Geno’s. Sure, as they were attending to mine. Yeah. Yeah. So, but there was a very successful one in the center. And every time I’d meet with them, I, you know, I meet with him and he actually would buy me pizza for lunch and we’d sit there and that helped. That helped that, besides me taking a long time to get Mitch Roberts to hire me as the exclusive broker. It also that first deal was, I think, I think it impressed him because he knew real estate because again, he was the head of real estate for album pot. I’m not sure if there was an Auburn pawn in that center, but he knew this landlord how difficult so it was kind of like a perfect storm right to be able to get this franchisee to represent but it was also connecting with the landlord, who was very difficult. Big Three takeaways. One,
Ressa 40:35
no quit on getting the assignment with the franchisee to educating the market about the brand and why the brand was great and would help them and three, really building the relationship with the landlord
that created that deal. And those three things really led you to build confidence with Panera to get more business. Yeah,
Kaplan 41:03
that was one other thing that I have to throw in there. The other thing is understanding from the franchisee or the tenant what what the site needs to be right because that’s the other part too. Right? You know is I spent a lot of time with Mitch and so on and also meeting and talking to Panera corporate there you know it’s interesting about a lot of people don’t know this. The real estate department for Panera corporate, even though the headquarters was in St. Louis, was here in Boston. And it’s Ron Shea, who was the CEO is from here. So he always kept the senior team and the real estate corporate office, which is still pointing behind here because I’m actually talking to you from my office to Needham, which, in a building that our company owns that has a Panera right next door. So not only do I do I love the concept I eat at eat way too much. That’s why it’s good. It’s a podcast, because, you know, I eat every day. But, um, so that too, I think that’s an important takeaway for anybody that is really understand what, what’s a good site versus a bad site? And, and don’t, don’t take it on yourself to just kind of think you know, it, you know, really get educated by both the franchisor in real estate and the franchisee as far as what makes a good site
Ressa 42:41
or not. The I appreciate any of the negotiation get contentious in that deal with that local landlord.
Kaplan 42:55
You know, it’s a long time ago, Chris, so I but you know, I get a little fuzzy but yeah, oh, yeah. Yeah, I he was when I say he was difficult. I definitely remember walking out and thinking there was not a chance in heck, we were gonna finish that deal. No doubt about it. He could care less. He could care less about the brand or anything. He just, I mean, Lucky cared about his rent, which, you know, a lot that matters. But he was he was just very difficult. And
Ressa 43:29
that’s a that’s a good segue, though. Because oftentimes, we we go into deals, and we think there’s no chance after a meeting. And sometimes those deals are the most rewarding and gratifying. And they actually happen.
Kaplan 43:42
Right? What do you think? If you left feeling
Ressa 43:46
that what do you think was like a turning point that the deal made?
Think it was I think it was the concept. He finally bought into the concept. Yeah, I
Kaplan 44:01
think it really was there. You know, the there were a couple there weren’t many. But there were a couple open. And I remember getting him to go. He wanted to go with me. But he did go. And I think that was the turning point. I’m trying to remember because at that point, mentioned already opened a store. His first store in Boston was in Framingham and Framingham, from Shrewsbury is, you know, 30 minutes or less. And I was able to convince him to please go to the concept. And I think once he did that, still in make it a lot easier to finish it but it certainly opened his eyes
Ressa 44:45
to the brand and the concept. All right. Well, really appreciate the story and a lot of the lessons learned. I want to pivot to the last piece of the show. Retail wisdom. I have three questions for you tell me when you’re ready.
Kaplan 45:05
I’m ready, Chris, go for it.
Ressa 45:07
One, what is your best piece of commercial real estate advice?
Kaplan 45:11
So I’m gonna go site selection, right? Because that’s kind of what I’ve, you know, I’ve hung my hat on my whole career. One of the things that always amazes me is, I asked folks, and you know, I hire brokers, and some of my best friends out there are brokers that I use exclusively in markets and trade areas. And one of the things I always ask is, all of the corporate real estate folks that come out and tour, have they ever done it on a weekend? And I tell you that 99.9% Say no. And it just baffles me because early on in my career, I realized that, and this was for retailers to what’s one of their busiest days of the week. Saturday, and I can tell you right now, people listening to this, I’d love to get feedback on how many people actually when they’re out touring, when we’re going I’ll be out touring again, hopefully soon, God willing, right? How often do they do it on a weekend?
Ressa 46:13
I think that’s not just for the retailer. I think that’s for brokers, landlords, everyone should go to retail properties on weekends.
Kaplan 46:20
Absolutely. No question about?
Ressa 46:23
That’s a great point. I
Kaplan 46:24
would say that would be my bet. And the only other thing too, I want to answer on that, too. And I know a lot of this is going to be edited. But is one of the things I always do too, when I’m looking at dirt, no matter where it is what it is. As long as it’s not so overgrown. I get it. When I tour, I get out of the car. And I walk to the middle of a site. And it’s amazing to me, how many people and brokers always say to me, it’s a little weird. Why are you doing that. And it’s just always been something I’ve done, because it’s amazing when you go to the middle of the site, where you’re going to put the building, and just stand there a little bit and look around, there’s going to be things you’re going to see from an access or low traffic flow, that if you sit in the car and look out the windshield, they’ll never see. So that would be my other advice.
Ressa 47:16
Two pieces of commercial real estate advice, one, get to the property on the weekend to stand in the middle of the dirt.
Second question, extinct retailer, you wish you’d come back from the dead?
Kaplan 47:31
Yeah. I’m gonna go restaurant, right, because that’s kind of what we’re talking about. There was a concept that’s unfortunately no longer here called T locks. T locks l u x e, it started in Harvard Square. And I actually represented him back in my brokerage days. At one point, they probably had about 15 stores around Greater Boston. And it was my favorite concept. Because not only was it a cool, cool tea shop, they had back in the day, they had panini sandwiches and just really cool space and good food. And, you know, it was just nice to see. And unfortunately, about six months ago, the first one was the last one that closed in Harvard Square and Cambridge, that they Regency actually, I think just bought them a real estate a whole block, and they’ve torn it down and building new. I don’t think T locks is coming back. But that would be one that I love that concept and missing. Awesome. Last question.
Ressa 48:47
So we’re all at home and I’ve been looking at home products
a bunch lately. And one of the hot home
products I had no idea was smart water leak detectors,
Kaplan 49:00
smart water leak detectors. Honeywell has
Ressa 49:05
their Wi Fi water leak and freeze detector.
Kaplan 49:10
My wife would love that. What does that retail for? I’m gonna say 1495
Ressa 49:21
Well, it normally retails for $79. But it’s on sale for 5868 Thank you for playing. It’s been a fun show. I
Kaplan 49:28
pleasure Kristen, thank you for having me on. Thank you.
Speaker 3 49:35
Thank you for listening to retail told, if you want to share a story about a retail real estate deal that you were a part of on our show. Please reach out to us at retail at DLC mgmt.com This show highlights the stories behind the deals from all perspectives. So it doesn’t matter if you’re a retailer, broker, entrepreneur, architect or an attorney And also don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s