VOL. 126 | NO. 104 | Friday, May 27, 2011
Thrifty Real Estate
By Sarah Baker
One area that has seemed to thrive in the recession is discount retailers, including thrift and dollar stores.
Jackie Ackerman shops in the Collierville Good Neighbor Center at 783 W. Poplar Ave., the newest location in the area for Memphis Goodwill Industries.
(Photo: Lance Murphey)
Low-cost operators, including nonprofit organizations like Memphis Goodwill Industries, are able to find more affordable property than in previous years. That’s because as market conditions have dropped, so has price per square foot, said Dave Leutwyler, Goodwill executive vice president.
“It’s one of those situations where the timing is right and you need to jump on it and we’ve been very successful in doing that,” Leutwyler said. “Our plan is to open four to six donation centers every year and that will allow us to open about a store every year and a half.”
Goodwill currently has 18 drop-off locations and six retail stores in Tennessee. Just like any other business, it has certain standards it analyzes for both operations.
Jess Ossorio of Crump Commercial LLC is the exclusive tenant representative for Memphis Goodwill. He’s constantly on the look out for new locations for the nonprofit, researching demographic reports, traffic counts, income levels and rooftop numbers.
“They want to be well-located, well-lit, safe parts of town where the customers are going to feel comfortable,” Ossorio said. “They do the math behind the scenes with the demographic reports – they have formulas that they plug in the information to that will tell them how that location will perform in terms of the anticipated number of donations, as well as the overall value of the donations themselves; it’s really neat.”
The common belief is that Goodwill stores exist to provide low-cost merchandise for financially distressed people, Leutwyler said, but that’s not the case.
“We certainly do sell things to people who struggle financially and that’s fantastic, but we also sell merchandise to people that have, quite honestly, more money than they know what to do with,” he said. “It really is all about finding the treasures that we have and getting good deals on stuff.”
Goodwill’s newest location, Collierville Good Neighbor Center, 783 W. Poplar Ave., is a good example of a well-situated space in a prime trade area, filling the 23,000-square-foot space formerly occupied by Samuels Furniture & Interiors.
“When we were under construction there, there were a lot of people that were saying, ‘Why in the world would you put a Goodwill in Collierville? We don’t need that, we can afford our stuff,’” Leutwyler said. “But the typical donor is a 35-year-old mother.”
Habitat for Humanity of Greater Memphis’ new ReStore provides an opportunity for people to donate reusable materials and helps support the group’s work.
(Photo: Habitat for Humanity of Greater Memphis/Crystel Hardin)
While the recession has certainly brought more people to resellers, the flip side of the equation is a slowdown in donations, Leutwyler said.
“Because people aren’t buying as much, they’re not donating as much,” he said. “So there is a big demand for donated goods and we’ve been able to sustain donation growth primarily because we’ve opened new centers. It takes about two to three years from the time you buy something new at Dillard’s or Macy’s and take it out of your closet to Goodwill. The shelf life in your closet gets longer and longer because you’re buying less and less.”
Indeed, it seems the community at-large has become more cost-conscious and prudent about spending. Hence the appeal of Habitat for Humanity of Greater Memphis’ new 45,000-square-foot ReStore, 7130 Winchester Road.
Items at the ReStore usually sell at 50 to 90 percent off of the original retail price, offering a cost-effective alternative for people who are looking to update their homes or renovate, said Dwayne Spencer, Habitat for Humanity of Greater Memphis’ executive director.
“It offers a way to make a tax-deductible donation of usable materials they no longer want or need and divert usable material from landfills,” Spencer said. “In a down economy, those sort of plans often fall by the wayside, and the ReStore will allow people to tackle many projects, even when on a budget.”
The ReStore concept not only provides an opportunity for people to donate reusable materials, but it helps support Habitat’s work in Memphis. In 2010, Habitat filed 30 new home permits averaging 1,363 square feet and $89,949, according to real estate information company Chandler Reports, www.chandlerreports.com.
Because Habitat believes location is one of the most critical components of a ReStore’s success, the deal was three and half years in the making.
“It’s just off (Tenn.) 385 and Riverdale near the intersection of Riverdale and Winchester, offering not only great visibility from 385 and Winchester, but it’s also easily accessible,” Spencer said. “From the day we hung our signs on the front and back of the building, we’ve had people stopping by, calling and e-mailing because they’re eager to shop.”
The retail team of Ed Thomas and Andrew Phillips brokered the ReStore transaction.
“We tried to help them find the right space on the right location for the right budget, but it finally paid off,” Thomas said.
Habitat International has a devoted department that specializes in the formulation of new ReStores all across the country. Like Goodwill, the funds raised from the retail stores help support the nonprofit’s day-to-day operations.
“With their guidance and input based on national data and other store comps, we felt very confident with making this major move and investment,” Spencer said.
The ReStore opens June 9, and its regular operating hours will be Thursday through Saturday, 9 a.m. to 5 p.m.