JLL is boosting its retail team with the addition of Tom Lagos and Patrick Toomey as EVPs and Jordan Uttal and Heather Boren as VPs. They will work alongside EVPs Geoff Tranchina and Scott Burns. We had the chance to sit down with Toomey and Lagos to talk about the retail market, their new team and their goals for the year.

GlobeSt.com: Your team was compiled from three different firms. How were you able to come together?

Patrick Toomey: We all have been acquainted for several years and when the JLL opportunity presented itself, we felt it was the right time to bring our skills together. We all share a common core of values including building strong client relationships, understanding and responding to client needs, outstanding service, and excellence in execution, among other things. We intend to be a premier market-facing brokerage team leveraging JLL's outstanding platform to deliver for our clients.

GlobeSt.com: What are you goals for the team?

Tom Lagos: Our goal is simply aligned with the reason why we joined JLL: “to enhance the client experience and create raving fans” that may sound cliché' but it is reflective of what successful retailers are doing to win over today's service oriented customer. Together the four of us will provide retail investment sales and disposition capabilities and complete the JLL's already robust leasing management and tenant representation platform. We'll also collaborate with the greater JLL Capital Markets platform. Together, our team will deliver three things: 1) best in class property positioning and distribution methods to connect the asset with the correct pool of buyers, 2) battle tested underwriting techniques that sustain value and 3) transactional experience (over 500 retail transactions) to provide certainty of execution. All three elements within one team, is un-matched in our industry. We seek to help clients who are looking to do multiple transaction and need a team that will not only make their lives easier but exceed their expectations.

GlobeSt.com: How is the growth of ecommerce impacting investor interest in Los Angeles retail properties?

Toomey: Ecommerce has been causing concerns for investors throughout the country, particularly for those that have exposure to soft goods. However, most savvy investors are aware that the disruptions in retail are not coming from ecommerce, in fact ecommerce is enhancing most retailers' presence in the marketplace. The upheavals in retail tenants is rooted more in their balance sheets, which typically carry heavy debt from expansions and/or mergers that were done based on sales that did not come to fruition. There are shifts in consumer buying habits, and smart retailers are adapting to and succeeding. Today, consumer confidence is the highest it's been in 17 years and private sector wages rose 2.5 percent year-over-year. There are numerous retailers expanding successfully this year—so far more than the 1,200 store openings have been announced and more to come. The key is to properly underwrite deals based on the fundamentals of occupancy cost, location, etc. before making an investment.

GlobeSt.com: What types of LA retail properties do you see the most investor interest?

Lagos: L.A. retail properties are always in demand by investors from all over the world and in general will demand a risk adjusted premium compared other parts of the country. Our focus has been selling Grocery anchored neighborhood centers, power centers and open air shopping centers all over the country. To wit, we have recently transacted in Mt Olive, NJ, Nashville, TN, Denver, CO and Hawaii. The overall market has been going through a 75 to 100 basis point correction over the last two years with the exception of suburban Power Centers, which have seen a more dramatic hit form the height of the market in 2015. Investors continue to have strong appetite for grocery anchored centers, and will really get competitive for “core” grocery anchored centers in Southern California regardless of economic conditions, so it seems.

GlobeSt.com: What investment advice do you have for landlords in today's evolving retail market?

Toomey: Stay attuned to what is really going on with various retailers, and don't make generalizations about anything. Real estate is not a commodity, and one needs to do proper diligence for any investment, including bringing on new tenants. As a landlord, look carefully at the quality of the tenant's business, including their strategy, balance sheet, etc. With new leasing, get full NNN recoveries as much as possible, require tenant sales reporting, and limit co-tenancies and restrictions. Sales reporting is becoming more and more important with buyers and lenders and adds tremendous value both in financing and selling your property.

GlobeSt.com: What advice do you have for investors looking to acquire retail properties in Los Angeles?

Lagos: Although you may feel like you are paying a premium today, you will not get hurt as your long-term value will be protected and even multiply over time.

Instant Insights /

Debt-Heavy Balance Sheets Behind Retail Concerns

Related Stories

Recommended For You