Everything For The Retailer
After 25 years in business, Atlanta-based The Shopping Center Group is still going strong.
Randall Shearin

Sam Latone and David Birnbrey

The Shopping Center Group has been helping landlords and retailers connect in the Southeast for 25 years. Founded as a retail tenant representation company in Atlanta, the company quickly opened offices throughout the southeast and beyond.

Shopping Center Business recently met with the two principals of The Shopping Center Group, David Birnbrey and Sam Latone, at the company’s new headquarters in Atlanta’s Galleria office park.

“Twenty-five years ago, we were one of a handful of brokerage companies around the country who were the pioneers of the tenant representation business,” says Latone. “It was a new endeavor in retail real estate.”

The tenant representation business was spawned when national and regional retailers and restaurants such as Costco, Bed Bath and Beyond, Blockbuster Video, Jason’s Deli and Ross Dress For Less, all current clients of The Shopping Center Group, began to seek store locations outside the malls and expand beyond their primary markets.

“The retailers didn’t have the local market knowledge to find the best locations to sell their  products to the customers,” says Latone. “They turned to the brokerage industry. As a new industry, there were only a handful of real estate brokerage companies in the late ’70s and early ‘80s who were representing retailers at the local level.”

The Shopping Center Group was founded in 1983 by Jeff Langfelder and Frank Buonanotte with the idea of having a local, boutique brokerage that would represent retailers in Atlanta. At that time, Langfelder was busy directing the real estate program for a relatively small retailer -— The Home Depot. While Buonanotte still remains with the company as one of its directors, Langfelder left the company in 1991. Birnbrey, who joined the company shortly after its founding and Latone, who joined the company in 2000, have been directing the activities of The Shopping Center Group since 2000. As business began to grow, they would often find themselves in other markets of the Southeast searching for sites for retail clients. Those trips led the company to find compatible and complimentary broker/agents in those markets to work with, some of whom would later became affiliated with The Shopping Center Group. Today, the company — which prides itself on local knowledge — has 21 offices in the Southeast as well as offices in Michigan and California.

Times have also changed The Shopping Center Group’s original core business. Today, more than half the company’s revenues are derived from landlord services. The company still represents more than 300 national and regional retailers and restaurants exclusively in at least one market in the Southeast, but the landlord services division of the company has grown considerably.

“The landlord services area of our business is something that we’ve devoted a lot of time and attention to over the last 10 years,” says Latone. “It has become a very significant portion of what we do.”

The company is currently leasing close to 55 million square feet for various landlords, from as large as pension funds and REITs to as small as private owners and limited liability corporations. Clients include RREEF, SCI Real Estate, Opus South and Hendon Properties. The properties range from freestanding properties to small, unanchored strip centers to ground up leasing on major lifestyle and power centers. The company manages close to 8 million square feet of retail space. In 2002, the company launched an investment sales division. In 2007, the company closed nearly $500 million in investment sales transactions.

In July 2007, the company merged Atlanta-based Corporate Property Dispositions (CPD) into its fold, adding further services to retailers and landlords. CPD focuses on excess real estate for major national retailers such as The Home Depot, for whom they handle most of the excess real estate. CPD operates a nationally managed program for the company’s clients and works with brokers throughout the U.S. to sell or lease excess real estate for retailers.

“We believe that we can be almost everything to the retailers and landlords that we work with,” says Birnbrey. “We’ve come into many meetings with retailers where we are expecting to get an assignment to handle their expansion of new stores and it ends up that they want us to handle the disposition of their surplus properties.”

One advantage that The Shopping Center Group has is the company’s “obsession with technology,” says Birnbrey. “We pinch no pennies when it comes to adding to our arsenal of technological, GIS and mapping capabilities.”

The company employs 45 full-time mapping people in its offices. That is about 25 percent of the company’s employees. The company also holds a 3-day mapping conference each year to bring its GIS/mapping department together to hone their efficiencies and talents. The employees share ideas and create efficiency, accuracy and consistency in their product.

In a time where a lot of companies are cutting back, The Shopping Center Group invested in a new enterprise resource system during the first quarter of 2008. The new system will streamline its contact database management and makes The Shopping Center Group’s technological collateral more efficient and cutting edge.

The company also has a unique training program where younger brokers are placed with senior brokers in a mentoring relationship. The company’s brokers work in teams of two to four people. A senior agent or agents are paired with a junior agent and one or more broker trainees. The company does not advertise that they have jobs available. Jobs are created when there are veteran associates who are extremely busy, and willing to train someone in return for getting the help they need and most important, when the right people are available for this role

“We don’t just fill roles so that we can have more people in the company,” says Birnbrey. “There is a give-and-take that’s required of us bringing someone on. The senior agent is required to train that person in return for the work that they are going to provide for them.”

Trainees are typically in their jobs for a year or two before moving on to junior agent status.

Trainees and junior employees may not make much money for the first 3 years, but after they hit a stride in the business, they tend to be compensated at higher rates than they would be at larger brokerage companies.

“Our company’s focus is on being the best place to work.  If we can validate on that promise, our agents will build careers with our company that can and should last a long time,” says Latone.

The company’s operations are centralized, yet decentralized at the same time. For instance, corporate marketing and accounting are centralized, while brokerage, research and mapping are done at the local level.“Consistency is critical to us,” says Birnbrey. “It is important to us that a retailer, landlord or developer looking at a map created by our company in Birmingham and looking at a map in Orlando look at a reliable and even product. The keys, colors and design of our maps are the same from one office to another.”

Projects and clients tend to be represented in teams coordinating their activities with an organized and cohesive approach. There is often a single point of contact, but always a concerted and systematic approach to the process. The company has a flow chart that shows how its associates work together. At the top of the chart is the client. At the bottom are the firm’s two chief executive officers, Birnbrey and Latone.

“Everything flows down from clients to us,” says Birnbrey. “The client is always at the top.”

One of the most unique aspects of The Shopping Center Group lies in its ownership.

“We believe that the best way to engage people, keep them as long term players and keep them as loyal participants in our program is to make them partners in the company,” says Birnbrey. “It is a very important part of our core program.”

The Shopping Center Group rewards employees with ownership shares based on a combination of longevity and contributions to the company. It is not based on productivity. Many of the owners are not production-based employees. There are office managers, administrators and mapping department employees who are also owners.

“Shares are given based on what they do for the company outside of the things they need to do,” says Birnbrey.

Ownership in the company pays distribution dividends every year with an asset value that covers death, disability and retirement. Of the 203 people in the company, 58 are owners. 

The Shopping Center Group has been a member of ChainLinks Retail Advisors, a collaborative national brokerage company with over 600 brokers in 62 major markets in the U.S., since its inception. In addition to the company’s participation on the board level since ChainLinks was first started, Latone currently serves as its chairman.

“We really believe that ChainLinks is a critical part of our past, present and future,” says Birnbrey. “ChainLinks gives us the ability to have a national perspective. It gives us the ability to call anyone from any major metropolitan area in the U.S. and get real information. It also allows us the benefits of timely and productive dialogue with retailers, landlords and developers throughout the country.

The Shopping Center Group is looking toward geographic and core competency expansion anywhere that’s logical, complimentary and non-conflicting.

How has dealmaking changed over 25 years?

“When I got into the business, it wasn’t uncommon for a pro-forma to be scrawled on the back of a cocktail napkin,” says Latone. “Now, it’s not unusual to see a financial report that is 70 to 80 pages slicing and dicing every aspect of a shopping center development. That sophistication is a result of increased complexities in the transactions as well as a more mature, more educated group of people directing them.  Many of today’s brokers, developers, landlords and even retailers have come from law schools and/or MBA programs. The level of sophistication is so much greater than it was 25 years ago.”

Following that sophistication is the capital that invests in today’s commercial real estate deals, says Latone. Wall Street capital, international investors, hedge funds and international banks have made the industry global in nature.

“Deals also take significantly longer,” says Birnbrey. “25 years ago, a typical deal could be accomplished in a matter of weeks. Now, it is not inconceivable for an uncomplicated transaction to go on for more than a year. More people are involved with deals today to make sure that every move and every effort is proper and well thought out.”

“The global aspect of this business and the capital requirements of this business have led to an industry that is far more sophisticated than we could have dreamed 25 years ago,” says Latone.