SHOWFIELDS in Miami with Amir Zwickel
Guest: Amir Zwickel
Chris Ressa 0:02
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris ReSSA. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC management.
in order to actually think to get some moments of clarity where they can have some idea generation because in a busy world, it’s hard to just sit down and without a phone without a TV that distracting distractions. Imagine sitting for two hours on your couch, not moving with a note blank notebook and a pen and thinking of ideas writing a doubt. You haven’t done that lately. I recommend your unplug. You spend some time. Thank you. Hope everyone enjoys the show. I think it’s gonna be a fascinating what’s been one of them just one of my favorites and have a good weekend everyone.
Welcome everyone to retail retold. This episode is an exciting one. We have Amir’s Wiko from Showfield fields. Amir is the a co founder and he runs the real estate for show fields. Welcome to the show, Amir.
Amir Zwickel 4:05
Hi, thank you for having me. My pleasure being here. This this is exciting show fields is getting a lot of press out there right now. And you guys are pretty innovative. Why don’t you tell us a little bit about show fields, who you guys guys are and what you guys are up to these days. Sure. So Sofia’s is the most interesting is going to oil
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And the key to making well informed decisions with confidence in today’s evolving retail climate. I am pumped about today. We have Amir’s a week on the show. Amir is a co founder and the head of real estate per show fields, this unbelievable concept that is really changing how people think about retail. So I think everyone’s gonna, like his perspective how he looks at the world and the story about the deal that they just signed in Miami that’s not even yet open yet on Lincoln
Road. But before we go there, I wanted to talk about unplugging. There’s a lot out there about unplugging to relax, on unplugging to or to rest. There’s this whole mindfulness movement where people are meditating. I think that is amazing. But something personal to me that I’ve realized with unplugging, and I’ve done, you know, bits and pieces where I’ve unplugged to rest and relax, not think about anything. One of the things I realized for myself is I need to actively unplug too thick. Which is counterintuitive. Because you’re running and gunning and moving so fast. Your mind is racing and going through the motions and trying to get things done. People are trying to get things done and they’re moving at a fast pace and they’re emailing and they’re texting and they’re calling. There isn’t a lot of time to sit down and just brainstorm. come up with ideas. Bring in a journal, your thoughts and strategize. And so while most people think of unplugging, to rest, relax and be mindful. I would suggest that people take some time to unplug
and other sling way. Basically we started this journey around three years ago. And it all started from the Twitter the observation we had, which was you know, we noticed that we enjoy much more from online ads or brands that we see online than we enjoy physical retail industry. Or you can say that it was the our Instagram feed was much more intriguing and interesting than what we experienced on the street and He’s get this huge gap between the huge variety of brands innovation that we see online and what’s lacking in the streets. That’s what started our journey and along the way, and we asked ourselves, why how could it be because we live in this unique point of time, which there’s more innovation, more cool brands out there than probably any other point of time in history. But still, when you when you walk the streets of New York, London, Tokyo, Tel Aviv, it all looks the same. And none of these treats the brands that my friends and I shot. And that’s what started our journey. And along the way, we found out that the reason for that is basically, that it’s really easy to start your business online. But it’s almost impossible, opening your own physical store, finding the right size of the space and signing on a long term commitment on the space and renovating it and designing it and operating hiring staff. Having the technology to understand whatever went on there, otherwise, you have no chance to succeed in the physical world today, generating the traffic. So all these barriers prevent for most of the brands in the world today, or more than 90% of the brands in the world today from being able to even consider prime location, physical retail. And then we thought, if we could make the process of opening your own physical store to be as easy as it is to open a website, we can then solve a huge problem for all these beautiful online brands. And while solving their problems. So for the real problem that we’re trying to solve, which is bringing back the sense of discovery to the physical world. And that’s basically what we do at Showfield, we lower the barriers to zero, allowing anyone wants to get in to do so very, very easily. And once you do that, suddenly, dozens of 1000s of brands who can and want to open own physical store, which allows us to curate and pick the most interesting brands out there. And that’s also why we call ourselves the most interesting store in the world. Because we’re able to take the most interesting brands out there and showcase them inside of a building. The way we practically achieve that is by taking relatively big locations around the 15,000 square feet each and divided into two types of areas. 60% of the space we call it show and the other 50% we call it. The show part includes content, our experiences that are rotating and changing all the time, include the food and beverage component with a place where people can hang. Changing art exhibitions, lounge launches, new products, lectures by brands, founders, yoga lessons for the local community movie nights, workshops, panels, whatever you can think about the drive thru right coffee to the door, in Daraa, 50%. These are the fields, which is basically our product you can think about it is contained rooms, each one of them, we bring to life a certain brand. And we tell their story in a very immersive and elegant way. Around everything. There’s the technology that we’ve developed in the last couple of years, which comes into place in many different areas of our business. But I’ll mention just two of them. One is the onboarding process. When a brand is invited to join Scholefield. They go through a very seamless process all done online, until they can activate on store basically brand doesn’t need to even step in New York in order to activate the store in our bond location. They are a place where we use a lot of technologies in order to capture and measure everything going on in inside our store. So their analytic cameras and sensors spread out around the building. And we capture a lot of data there. We use this data for two main purposes. One is to constantly optimize the design of the space to better the user engagement. So we use modular systems that allow us to relatively easily change and to in order to push back. And that’s the most important thing to push back value to these brands. These brands are used to live online, they’re used to benefit on many levels of engagement, apart from sales, tangible goods, and we try to allow them to do the same thing in the physical world, right. So they get access to a live dashboard, they can access 24/7 and see everything that went on inside their space. So how many people entered from the street, chauffeurs and how many people entered their space and keep the map and dwell time in front of each product and the demographics of the people who walk their space male female age group era. And we always add more and more features with things and to allow these brands to justify the cost thing at Showfield not only by the traditional ROI of retail, which is sales, brings new great sales to chill fields don’t understand me wrong, but we try to provide them many other types of our wise. The idea is to open similar locations in every major city around the world in the next few years.
Wow. That’s amazing. Unbelievable. Yeah.
Speaker 2 9:47
On our second location in Miami, so we’re super, super excited about that and I’m happy to share more. One. We’re going to sign another deal this year and keeping on scaling as we move forward.
That’s unbelievable. A lot of information there. So some questions. So how are you choosing these brands? How do you choose? Right? You’re curating. I know, I know, a brand can, you know, basically fill out an application or in their six step process to go on? But you guys are curating and choosing some brands as well, correct?
Speaker 2 10:21
Sure. So we curate all brands, we say no to brands every day, either, because we think they don’t fit well. Or, you know, like, we don’t believe there’ll be successful at Showfield. We don’t want brands that we don’t think that will be successful at Showfield. But to your question, when when I think about when we think about duration, first of all, the person who leads that for Showfield is my co founder, Katie hunt. Okay, it is very, very knowledgeable and experienced in all the people seeing in this area. She was the third employee of Warby Parker and cmo injured before they got sold. So she loves that part. But to your question, what we what we’re looking for when we’re thinking about the brands, we’re trying to identify the brands, that would be the most interesting, we’re looking for brands that share the same DNA, meaning they all have to be mission driven, design oriented, consumer centric, and they’re all basically offering the same consumer, which is also what makes them empower each other together in this building.
So one of the things you know, you mentioned that mission driven design of product and consumer centric, but in most retailers have things like that. But what they are, they’re also driven by a product segment. When I walk into a show fields, there might be electronics, there might be clothing, right, there’s that it’s not any one type of product.
Speaker 2 11:53
So actually, we do have like few verticals that all brands need to fall into. One of them is wellness. And when we think about wellness, we think about the wider definition of wellness more like well being with wellness is one vertical that we’re focused on the other one being patient and design.
And third one is lifestyle technology. In my brain, I saw
TVs and I saw some fashion but now those three verticals make a lot of sense to me wellness, fashion design and lifestyle technology brands. That’s
Speaker 2 12:30
honestly what’s what’s going on in or, you know, urban location is the third floor is focused on fashion and design, the first store is focused on wellness brands. And the second floor is hosting the theatrical experience called House of Showfield, which is a very innovative experience that we lounged around six months ago, was supposed to take place only for a month. But we found ourselves extending it to six months eventually, because there was a huge demand. We brought in more than 60,000 people to that experience so far.
Incredible. And I love the strategy, you guys, it’s well thought out, are.
Speaker 2 13:13
So you know, we’re still thinking about it. It’s part of that sort of that vintage or the fun part of being startup, right? Like we try to make as many mistakes as we can now and experiment with as many things as we can we, we don’t think that we found like, perfect, perfect formula. And now all that we need is just barely three times, we’re still like, very open to changes. And we’re changing all the time
that that experimentation is paramount in that it’s awesome to hear that you’re still doing it. These brands, are they coming to you and want to be in the store more to drive revenue revenue or more for branding opportunity
Speaker 2 13:56
really depends on the brand. So we have four types of brands and Showfield. The first type being anchor brands. So for them, it’s basically another sales channel, although they also get a lot of marketing value. And all of them make money even only from sales Showfield. That said, all of them also using Showfield as a marketing platform to launch a new product. The second part is emerging brands up and coming brands is brands can make only, let’s say $5 million a year some of the B class even and for them it’s more about experimenting with physical retail right like to do sales, some of them will even like make money that only for themselves. But for them they get so many so much other value as well because they get to learn their consumers. They they they get to learn what’s working more and what’s working less. They get to use Geofilter as a platform to lounge themselves and to promote themselves to get social exposure. Short Films got more than 300 billion impressions in social media. And first of all for brands benefited from that. I think there’s almost no brands who didn’t get like media mentions as a result of being short films. And most of them got a lot of them. So that’s really, the brand’s third type of brand, by the way, is curating brands. A good example would be Shopify or entered Showfield for few months. And to get away with them, we curated brands who use their platform from the home district. And our example for curating brands was in chauffeurs is brand assembly or the consultation designer who had the space at your fields. And finally, the fourth type is legacy brands or legacy brands are brands that have been there for a while, most of them have a lot of stores already. And put them in order to come to show feels that they would need to do something that they haven’t done before in the physical world, meaning create an experience that doesn’t exist in any of your other locations. And for them, it’s like, it’s a bunch of reasons, but also, among the rest, it would be associating themselves with quite the cool kids or like the, you know, innovative environment of brands that Showfield
incredible. And so I come in to show fields, and I think you know, innovative new concepts and experiencing things I can buy product in the store.
Speaker 2 16:32
Sure. So old grandson Showfield sell their products in the store. And basically, we allow them total flexibility there as well. So if you want to have a shop and carry model, or people can actually live with the product, you can do that. We manage your inventory the building, or you can have a showroom model where people can only ship to home. Most brands in chauffeurs currently choose the first option with a shopping carry, we found out that people actually still want to go out of the store with a bed. And of course that’s kind of false. It was surprising. But this is what we found out
instant gratification. People want it now. And right. Yeah, that instant people that feel good moment when you get that awesome product. And
Speaker 2 17:18
you’re a bit hard when you have a brand that sells mattresses but yeah,
yes. Totally. That is that is that is hard. For sure that to take that home made a really big bet. Yeah, it’s actually it’s a challenge. So I used to work for Sherwin Williams, the paint stores company, you know, a really awesome paint stores, company, fortune 500, they did a really good job. And when we were entering New York City in the early 2000s, one of the things we were thinking about if someone you know, in suburban America, people take the paint and they put it in their car and they drive home in Manhattan, they would have to walk and walking with multiple five gallon jugs of paint is not easy. So how do you do that? Right. And so we were you know, similar to, I guess, your mattress challenge. And, and so you know, you’ve got this amazing, innovative concept, your revenue stream does that come from the brands paying to be in the store or typical wholesale retail environment.
Speaker 2 18:21
So we don’t touch brands sales, they get to keep everything that they sell. But brands pay us a flat fee every month. By the way, there’s a lot of thought process behind not touching bring sales. We we feel that part of the reason for which all retail spaces around the world more or less look the same. And all multi retail, multi vendor environment, retail environments. Look at this time and host of the same brands is because everyone are optimizing for sales. Eventually, they’re the merchandising that asks one question, who will make more money from it? And and we decided that the person we want to optimize for is the consumer entering the door. So the only thing that we’re optimizing for is consumer engagement, and we can’t be biased. And that’s why we don’t want to touch brand sales. And also some of our prints are not after sale.
Wow, that is a fascinating concept. I hadn’t looked at it that way before in why there’s similarity but that makes sense. There might be some VP of merchandising who’s trying to generate the most might be one brand and you end up with the same into many stores.
Speaker 2 19:37
You end up not being even exposed to new brands. And also parts of our brands are not our first sales and I can give many examples like one of them. Why is the city of Nashville activated a beautiful space until a few days ago a child feels and activated with live shows of top artists. They curated music that was either created in Nashville or by Nashville artists and their Our goal was to encourage to tourism to Nashville by branding it as music theory and they collected 1000s 1000s of emails of people who could come in and planetary to Nashville. It’s only one example. There are other brands looking for like different types of engagement markers thoroughly sales and fossil brings are equal. So the only thing we’re optimizing for is consumer engagement. We feel by the way that eventually it will make these brands successful as well.
Incredible. And how what’s the typical duration that a brand is in your store?
Speaker 2 20:34
Go brunch, John Cho fans for six months. That allows us to cute to create two very big brown moments along the year. And the next one is going to be March 26. When we’re going to allow in chars to bring curation, very excited about that. Lots of beautiful new brands that we’re going to bring to life there. And we work with all these brands, PR companies, you know, create as much buzz as we can around it and excitement we will invite different influencers internally to experience the brand’s first and we make organize a big party around it all.
Six months. Yeah.
Speaker 1 21:13
Awesome. And you know, we didn’t talk about it in the beginning. What’s your background? Amir? How did how did you end up? Where did you where’d you come from the end up creating this special place.
Speaker 2 21:24
But actually, I’ve come from real estate, been doing real estate more or less my entire life. It’s some other type of entrepreneurship as well as a magazine in Israel, and fuels fatality businesses many years ago, but mostly real estate, the real estate developer in Israel before moving here and since 2014, have been doing real estate development here in the US first I led to deals that we did in Brooklyn, very small one. Later on we together with the other guys we call on the provided mezzanine loans, one of the latest largest developers, and a couple years back, also partnered with two other people to raise funds, that is 14 deals in the area of the dorm triangle area in North Carolina, or we invested mostly in generating assets and development as well. And they came here to New York, basically to do the mastering real estate development in Columbia University. And my plan was to become a developer and start with small deals, then go my way until I become a big developer. And come here, you know, because it will these rarely, I was very important to mystic and was looking for like the most distressed market and obviously it’s retail. Same ways office was very distressed in 2009. Retail is very distressed. The only reason you don’t see literally flooding streets is that it’s happening to the wealthiest families in the US. And they’re not that high leverage so they can deal with it most. Although here and there, you see the big closures happening so that the industry is super distressed. And where there is expressed industry, there’s an opportunity, more or less around this time like that was introduced to tell my co founder who was thinking about solving this huge problem for online brands and and allowing them short term activation in the physical welding, kind of like all connected and since they say it was three years ago, we we’ve been working on that together. And I’ve been leading the real estate particle Scholefield, chain fluids, construction and sourcing for new locations, expansion strategy, and so
on. Wow. And are you guys all self funded? Or did you guys raise money as you get as you get to where you are today?
Speaker 2 23:43
So we raised money, both on both VC funds from Norwich real estate investments,
awesome. The capital intensive business
understood, you know,
Speaker 2 23:57
at least for the first location, right, as you as you move forward, you get way more favorable gearing, Stan, and much more credit.
One last question on that before we move to Miami for a second. So, you know, you mentioned earlier, a topic I’ve been talking to a lot of people about is
the cost of entry to actually
open an online store and online brand and do business online. Is is inexpensive. But to scale and make a profit and I’ve heard is challenging. And I’ve heard the number is when an online brand gets to $10 million. If they don’t open up a physical presence, that it will be challenging to turn a profit or I’ve heard when they get to Series C funding. You know they’re going to start to open physical stores because if they don’t, it’s going to be a challenge to make a profit. What’s your take on sure Your e Commerce and the profitability of pure e commerce.
Speaker 2 25:06
So you know, 15 years ago, the race to the online world is started. And it used to be the edge being online. And the thing is that now everyone go to the finish line. And it’s super, super hard to stand out because there’s huge noise online. So you know, competing with Casper on on Metris clicks or with Warby Parker on sunglasses, clearly, it’s something that you would need to spend a lot of money or to do. And we’re thought to think that total thing that you know, there is this huge traditional retail industry $2 trillion industry still growing, but very slowly. And this new animal only $600 billion industry, but going much, much faster, the E commerce. And the discussion was always who’s going to win physical retail or ecommerce. And now everyone understand that one can live without the other. And there’s this huge world in between. We call it e commerce, it’s all fields before consumer or successful physical touch point can can happen today. And you see brands that understand very well, in this ecommerce world is worse Showfield intends to dominate in the next few years. We, by the way, break down this ecommerce world to five cities that are all required in order to actually create a physical successful physical touch point today, it was always hard to create a successful physical touch point. But today it’s even harder because the consumer has changed and they have different needs and desires. So the first is convenience, it has to be very convenient for the brand to pop up. It has an it has to be very convenient for the consumer to discover these brands. They can see as curation, because we’re saying that, you know, we’re moving now from the edge of creation, which is the reason why we experienced this huge variety of brands and innovation to the edge of curators, which is the reason why we experience all these influencers. Each one of them is a curator in his own field. And that’s how people see the physical environment has to be curated environment. 30 is content because scraping Instagrammable moments is just not enough anymore. The consumer today’s sophisticated and intelligent and they’re looking for something bit more than that forces community because it’s the master on the brands. And we try to do that at shofar is initiating hundreds of community events. And then the fifth and the last day is connection, because the real challenge is that choosing one of these themes is just not enough, you need to do it all in order to be successful. And I think that’s also what differentiates Sheffield’s from like any other innovator in result today that we have a very holistic approach about everything we do. And we try to rethink retail from top to bottom. And it’s not just, you know, being opportunistic about the vacant space, or solving the vacancies for Lent, or we try to rethink it.
Incredible. I guess, one thing as you were listing those five season, it’s really interesting. And I, I love the C commerce idea and what I hadn’t heard that before. And that’s probably because you guys invented it. One of the things that you didn’t touch on, which a lot of retail thinks about often is value, where does that fit in? And where you’re thinking about price point and price sensitivity to consumers? Is that a? Is that a thought process? Or because you’re in some, you know, high end markets, you’re not thinking, you know, price is not a concern?
Speaker 2 28:40
I think it really depends on our locations, right? I think that like it’s a thought process behind every location that we’re going to open and really going from this location where we open the country when I looked at concentrates price point wise, with, you know, where products are sold for 20 bucks, and we have products that are sold for 2500 bucks. And from both ages we have like very successful brands. So we show these lives within like a high income type of environment in your home. may change, right? So you know, it really depends on where we go. And I don’t think that the curation of brands in Miami is going to look like the curation of brands in in New York, you know, part of what we’re trying to do is also becomes stage to the local environmental brands and artists. So it’s something that we’re going to do in Miami, we’re going to wherever we go, and I think that that there would be a lot of thought process behind price points going forward as well. But currently, it’s it’s a range.
Great answer. Thank you. All right. So you guys just announced Miami. You’re opening a store in Miami. You know, tell me about how that deal happened. How did you choose Miami and what were some of the things maybe the lessons you learned? I’m from New York and that you applied to Miami.
Speaker 2 30:04
How much time you have you know, it’s a lot of thought process behind like our expansion strategy, very high level. First phase that that we’re now tackling is opening new, more flagship locations. When I say flagship, I mean a very steady city first year location building with a presence, very high traffic and streets. And I have to check all these boxes. Once I get to a point in which my brand equity is strong enough. And I don’t know to tell you the day after five flagship sites that she took off that shift, then we move to phase two, which would be open dozens of growth satellite locations, satellite locations may be, you know, second two locations within the first few city or shopping malls. We already get a lot a lot of proposals every day. For such locations with not a lot of heavy lift from our from our end in terms of spend out of pocket, meaning bringing in white or like us to a shopping mall is something that like a lot of shopping mall owners are after. So that’s very high level, but like when I dive in the next few flagships that I want to open, so it’s kind of like obvious where like my bed next days would be. So I’m looking at a lot of series, and I’m looking for this intersection between brand equity, foot traffic and cashier. So that’s one thing. Just happening very, very well in Miami. The other thing about Miami is that the DNA of Miami fits very well with watch off it is going terms of art, design, innovation, etc. It’s a growing city, one of the most growing cities in the US. So that helps as well, you know, it’s not that Miami was a yes and the other cities were no, it was just everything I just said, combining it with the deals that we’re looking at in each one of these markets. In this deal specifically, we liked it a lot. We believe that the location where we’re going to open on in Cornwall is the right place for us to be not only in the THINKWARE world is maybe the only corridor retail corridor in Miami that has high traffic 12 months a year. But also our location on Lincoln Road will allow us to enjoy both from tourists clients and from locals. Because we can pass like on the middle we also sit within like two major destinations, which made sense for me being one being the newly opened time on market, the other one being the newly renovated Convention Center. And few other stuff such as one of the most successful Zara stores in the world. So that what makes sense about my real estate why’s that like, you know, we learn in New York and applied in Miami, we were were happy to find a tool for building with smaller loss factor for us. If you remember I mentioned before the 50% show 50% fields, demography fields, we call it duty utilization and it’s easier to achieve the utilization that you want with smaller loss at work on vertical transportation. So that was one less than that. That said, I’m not saying that like I won’t close any deals with multi floors or like more than two really depends on the deal with here it made a lot of sense. I won’t say my the classic building I would look at would be one floor to
Speaker 1 33:22
one floor to so you like two floors, you can live with one floor. And you said the the vertical transportation was more of a challenge for shrink.
Speaker 2 33:34
We have four floors there and we kind of like lose area on on stairwell and on the elevator in each one of these corridors. The last factor is higher and achieving utilization that you wouldn’t want is a bit more challenging.
Do you have security in the stores? Only in events, only in events got it. So brand equity foot traffic. And you know it was a growth city. And so you know Miami was one of multiple cities. You know, you mentioned London before but I’m sure cities like Los Angeles or you know, warm weather 12 months a year foot traffic.
Speaker 2 34:14
We’re looking at Chicago we’re looking at many hours. Yep.
And so you land in Miami Lincoln Road is famous, you know, walk me through you know how you chose this specific piece of real estate.
Speaker 2 34:28
So first of all after like you know identifying with Miami is a place where I need to be it’s basically diving into different sub markets within the theory and understanding where you can open a flagship location or you can open a satellite locations now when they penetrate a new city. I want to first open reflection because people still don’t know why. They New York people start knowing who I am so I may be able to open a satellite location. But in Miami people still don’t know who we are So we want to open a flagships. So you’re looking for the place that have the consistent traffic. And these two places are probably one liquid road and Brickell, city center. Assuming I don’t want to go to a shopping mall and they didn’t see a deal there that made sense for us and brico city center, because Lincoln vote, so then you need to dive in and understand all the deals that exist on the road. And that deal was was the one that made sense together with another one. We brought all the major stakeholders from our team few months back to Lincoln Road, which showed them both deals, all of them wanted the one on 530. So we moved on to a very long negotiation until it was time.
And so the long negotiation, you land on Lincoln Road? ulanda, 530? And were you competing for the space? Do you know with any other potential tenants know that they know? And what was the big negotiation economics? Or was it more the legal parts of the lease? What was what was the some of the key pieces that made this a long negotiation?
Speaker 2 36:12
It’s a good question, you know, these things just sometimes move very slowly. Even when you will want to move things faster. Sometimes you just can’t. And you stand, you know, your comments. And it just takes time, especially when you deal with big institutional landlords. And there’s a legal department there, and everything takes more time. And there’s no more stakeholders that need to like, you know, take a look at that. So it just very slow. So in our case, it wasn’t about the business terms too much like we, we met the landlord, and we agreed on the business terms. Now when they are in New York story. Since then, it was a legal negotiation.
I understand where a big landlord, right where a large national landlord, and sometimes, you know, we try to do what we can, and I think we do a best in class job of speeding up the process. But yeah, we end up definitely in negotiation, sometimes longer than both parties would like. And it’s both parties, sometimes, you know, no one wants to give uncertain things and people have their hot buttons. And it is it is what it is, you know, I hope to one day find the answer to make these negotiations go faster, but it is a it is it can be a grind, sometimes.
Speaker 2 37:34
We found a way, you know, like, that’s what we do for granted. We go through all the pain that that we physical return involved in order to save it for them. For our first deal, we signed on a 200 pages list with you know, I guarantee and I gave my firstborn. As John Scholefield they sign on two pages list with millennial proof language. Very, very
Speaker 1 38:00
understood. I guess the the replacement cost of one brand to the other though, is very different than replacing show fields for two with another retailer and it’s financeable and all that those good things. And that’s why you had to give your firstborn on the New York location. On the that’s funny on the on the Miami location. So the construction of the space, you know, is there a combination of the landlord’s paying for some you’re paying for some are you guys doing it? How’s that work and
Speaker 2 38:34
there’s always a component of TI, which of course I cannot disclose here, but there’s always a component of TI and then tau work that will be done there is going to be done by us. Unlike what happened in New York, where there was the huge scope for the landlord and we built our scope in parallel to that. In this case, it’s only US
got it so they’re giving you the keys and a check and you’re building it.
Speaker 2 39:03
Exactly. The building is in good condition. We’re we’re doing the interior
when do you think you’ll open
Speaker 2 39:11
so we plan to open between May and June till don’t have the final opening date but in between May 1 And June 1.
What is it and I really can’t discuss the TI
Unknown Speaker 39:26
only with midterms to this the month and a half ago
and we’re moving fast.
Speaker 1 39:35
And so I know you can’t disclose the TI but what is it costing the bill down to show fields they look incredible. The level of finish looks so high. It looks like it’s expensive. What is What did you know what it’s costing you per square foot to build out a show fields today?
Speaker 2 39:52
I know I prefer not to disclose the number I will just share that. You know. We met I met Joseph On the chairman of Thor equities in our building in New York a few months back and and I asked him because I know that he saw the building before it was built. And he saw it after we did our interior feet out. And I told him, Joe, there’s probably no other person around there that knows retail better. And you mean, how much do you think we spend these days? In between 800 to 1000? bucks? I would say that we haven’t even been
constant. Wow. That’s great. That’s great.
Speaker 1 40:33
So you guys are you guys are becoming construction gurus over there and figuring out how to build it for a Cost Conscious price. That’s good. That said 800 to $1,000 a foot though is, is is a lot, even half of that is a lot. Right. And so, you know, but that level of finish is, you know, first class and top tier. So
Speaker 2 40:57
like, those are, like, you know, between a quarter to a third than that, so
Speaker 2 41:05
we, like, we’re very smart design that allows us to create an elevated type environment without spending a ton of money on on different items within the space.
So, yeah, that’s great.
So how long were you negotiating this deal with them?
Speaker 2 41:25
So we’re in touch with principals, and maybe a month,
so eight months to get the deal done? And you have a two page agreement with your brands, and it gets done expeditiously? Maybe you can help change the retail real estate industry.
Unknown Speaker 41:42
In New York, by the way to coil. It didn’t take long, but we’re ready to coil.
Got it. Okay. So
Speaker 1 41:52
anything unique about the story behind how you ended up in Miami, and you’re not open yet, but how the deal got done. You know, this is really cool. I love the insight that you gave of how you guys look at markets and how you chose Miami and landed on MC Lincoln Road. Anything else interesting about this deal?
About the deal itself? Yeah. Or did we hit it? All right.
Speaker 2 42:18
I think in general, like, what’s interesting about nuclear law is that, you know, prices have been decreasing there in the last few years. And I think like we’re now reaching a big point, or like, limb, Cornwall is coming back. And I’m not only talking about shortages, so many good things that are going in, including the convention center that finally completed the renovation, including the James Corner plan that is going to take days run by the same architect to be the highline in New York, who’s going to lead this project where the city of Miami Beach is investing dozens of millions of dollars and making landlords invest dozens of millions of dollars in activating the road with new art activations, and sleeping areas that arise sooner. So I think like, Lincoln Road is really heading to a good place, and were able to, like enter the stock market. exactly in the right point was, you know, time will tell. Awesome.
Speaker 1 43:19
Well, listen, that was an amazing story about shale fields and how you’re viewing the world. And a cool story about how Showfield is ending up in Miami. The last part of the show was three questions. Amir? So here they are, question, one best piece of commercial real estate advice.
Unknown Speaker 43:40
Property tax is a bigger subject than you think.
Speaker 2 43:47
You know, like, some, some tenants negotiate the deal. And I had friends that, like, luckily, I advise them on time on that. But, you know, sometimes you negotiate a deal where like, there’s a time modifying grace with like, some basis of authority, that’s and the tenant is telling himself, okay, the, the landlord is going to pay up to this base, and like, this is the base like, and then I’m going to pay the increases, but like, it’s not going to be a lot. And they don’t even go and analyze like what’s going to happen to the the assessment of the property and to the to the future property tax levels, just because they’re entering the poverty and so it can be it can really kill your business if you’ve done a specifically not only to your lawyer or negotiates the lease for you, but a tax lawyer to prepare projections for the next 1015 years understand exactly before you start negotiating, it will tell No, no, that’s great advice.
Obviously opening short fields, you were a fan of retail or shopping, extinct retailer, you wish would come back from the dead.
Unknown Speaker 44:56
That’s an easy one. I really like lockmaster Awesome.
You You do, man?
Unknown Speaker 45:02
Think good man, a great brand.
Amazing. Do you watch Netflix now? Yeah.
Speaker 1 45:10
Awesome. All right. Last question. I’m gonna give you a product. I just purchased the product. So I got a new mattress. And I stay at Westerns when I travel often. And I love their bed and pillows. So I actually bought the Westin feather and down pillow. And I’m on Westerns website, you know, this is I would call the Western hotels and unknown D to C brand. You should get them in show fields. Their pillows are amazing. What much is the pillow? That’s the question, what is the pillow cost? 120
Speaker 1 45:49
You know, your price is it’s close. $99 So if you get the pillow protector, it’s an extra 14. So anyway, thank you for playing. Emir, it’s been amazing. Thanks for coming on. I am excited about you guys. You guys are definitely revolutionary and you guys are doing something awesome. Keep it up. And if you know you ever need anything, don’t hesitate to reach out. Thanks for coming on man.
Unknown Speaker 46:13
Thank you so much. Thank you for having me.
Thank you for listening to retail retold. If you want to share stories about a retail real estate deal. If you were part of on our show. Please reach out to us at retail retold idlc 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. Also, don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s episode