A quarter-century after mentors urged him to “buy right away,” CBRE veteran Philip Voorhees is testing what he learned by stepping fully to the principal side of retail, bringing a broker’s deal volume and an operator’s eye for complexity to his new role at BISON Partners. In the process, he is rethinking everything from who really owns retail in America to how tenant mix, local entrepreneurship and cap rate yield shape the next generation of shopping centers.
Early Push to Invest
Even early in his 25-year career at CBRE, Voorhees listened closely to industry veterans who told him that earning commissions was not enough.
“When I started, I had all these older guys who were my mentors,” he tells GlobeSt.com, adding that they stressed brokers can make high income but lose that paycheck when they retire, so they should start buying property right away.
Beginning as a fully commissioned broker, he says he “never really had a steady paycheck” and chose to listen to “the people who owned properties and made the decisions,” joining CBRE in 2001 and buying properties himself two years later.
From Brokerage Scale to Principal Mindset
What began as investing on the side ran parallel to a brokerage career in which Voorhees built a team of more than 20 people that sold 1,072 shopping centers and retail properties totaling about $15.6 billion in value. After decades on the sales side, he wanted a change of pace, shifting from brokering deals to full-on investing. This move brought quieter surprises and realizations about how capital behaves and what ownership really entails. One of the first lessons is recognizing how different the foundation of a private capital business can be from that of institutional investors.
Private Versus Institutional Capital
“Private capital investors tend to have other income stream that produces the revenue,” Voorhees says, noting that many American entrepreneurs, especially in the first or second generation, are wary of equities or bonds and instead want to buy property and pass it on to their children.
By contrast, he says institutional capital typically buys for a finite period of five to 10 years or relies on diversification across many different properties. That underlying structure shapes everything from hold periods to risk tolerance in retail, which is the shared background for both Voorhees and BISON Partners.
Why Retail is “the Most Difficult”
Voorhees describes retail as the “most difficult asset class” for several reasons, starting with who owns it today.
“Many of those who owned retail are retired,” he says, pointing to what he sees as an “experience gap” among current owners and operators. Because net operating income from rents is critical, operations sit at the center of investment performance, making execution and day-to-day decisions far more crucial than in some other property types.
The Footprint Challenge
Physical format is another complication. Voorhees explains that an office property might have a 10-to-1 or 20-to-1 coverage ratio, with 400,000 square feet of office building on a 50,000-square-foot parcel. In retail, however, a property might sit on 400,000 square feet of land that must accommodate interior common spaces and parking, with only 100,000 square feet of actual store area. That land-heavy configuration makes parking, circulation and shared areas central to value creation.
“The tenant composition has shifted significantly,” Voorhees says, particularly in mid-box space. In the 15,000- to 40,000-square-foot range, he recalls, there were once about 100 national tenants interested in those boxes, a number he estimates has dropped to “probably more like 20 or 30” today.
That contraction has pushed owners and investors to rethink what tenants they are willing to embrace and how those tenants interact with parking and traffic patterns.
Gyms From Parking Hogs to Traffic Drivers
One of the most significant changes is how investors view gyms. Decades ago, Voorhees notes, owners and investors often disliked gyms because they absorbed so much parking and were seen as a drag on other tenants. Today, from Planet Fitness to premium Equinox, he says fitness users are viewed as bringing in repeat shoppers, with gyms typically busiest early in the morning, from about 5 a.m. to 8 a.m. or 9 a.m., leaving parking open and “normal” daytime customers unencumbered. That shift in attitude underscores how operating patterns and hourly demand can rewrite what qualifies as a good retail tenant.
Limits on “Best of Everything”
Retail cannot stack only top-performing brands in the way an office tower might.
“In a metropolitan office building, you could have the six best law firms in town,” Voorhees says, but in retail, “you probably can’t have T.J. Maxx and Ross and your local clothing folks, too.” Category overlap, co-tenancy restrictions, and tenant requirements mean that even highly desirable brands may not coexist easily under one roof, which complicates merchandising plans.
Fast-Food Economics Evolve
Fast-food operations illustrate how retail fundamentals have shifted.
“Back in the day, a 2,500 to 3,000 square-foot drive-through restaurant would be doing maybe $1.2 million to $2 million,” Voorhees says. Now, he notes, those restaurants are “doing well over $2,000 per foot in sales,” a jump that reflects both higher volumes and rising sales productivity in compact, drive-through formats.
Complexity From the Principal Seat
Voorhees says his move from brokerage to principal has sharpened his appreciation for the complexity of retail ownership.
“When selling retail as a broker, you think, ‘Gosh, everyone should want to own retail,’” he says, but being on the principal side forces a closer look at issues such as how long a space has been vacant and what overall tenant mix will best serve a given space. That lens changes how he evaluates risk and opportunity in each deal.
Credit Versus Cool
He credits CBRE’s Melina Cordero with articulating what he calls the “difference between credit and cool.”
“If the shopping center is filled with boring corporate brands, that shopping center won’t seem textured and approachable,” Voorhees says, arguing that properties need balance in their merchandising. He adds that “some of the institutional cohort understand the need for local tenants,” noting that owner-operators can often secure 3% to 6% CPI rent increases, while a national chain might offer a 10% bump spread across five years.
Managing Tenant Demands and Exclusions
Voorhees also cautions that tenants with heavy requirements can be worth the added work if the economics justify it. He warns that broad tenant exclusions can distract owners from what the property more broadly needs in terms of merchandising and operations. In his view, overly restrictive leases can undermine the flexibility necessary to curate the right mix over time.
Looking Beyond Top-Tier Assets
On the acquisitions front, Voorhees argues that investors should not focus solely on buying top properties where they will simply operate and see limited value improvement.
He expects investors to start asking whether they genuinely need a grocery store asset that offers the lowest return and the highest price, or whether they can pursue alternatives. “Can I get 20% or 30% more cap rate yield?” he asks, predicting that “you’ll see a widening buy box” as investors look for better risk-adjusted returns.
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