Episode 455: Curbline Properties CEO David Lukes on Redefining Convenience Real Estate
Convenience retail is all about simplifying life, and Curbline Properties (NYSE: CURB) is leading the charge with strategicallyΒ ...
President, Chief Executive Officer & Director, Site Centers
Search every verified David Lukes interview, podcast appearance, and on-the-record quote β each transcript cross-checked by AI and human review to confirm speaker identity. David Lukes, president and CEO of SITE Centers, oversaw the spin-off of Curbline Properties in October 2024, which began trading on the New York Stock Exchange under the ticker CURB. Lukes described Curbline as the first publicly traded REIT solely dedicated to convenience properties, with no debt and significant cash on hand. He stated that the company focuses on small, convenience-oriented retail assets and that the strategy is driven by the use of geolocation data from cell phones, which he said has enabled institutions to confidently invest in unanchored convenience properties. Lukes noted that convenience properties thrive because customers spend little time on site, and he characterized the portfolio as balancing national credit tenants with local tenants. Lukes described the retail market as "in a euphoric moment" with high tenant demand and limited space. He said SITE Centers had transacted a significant volume of property sales and acquisitions to fund the spin-off, calling it the most transaction activity he had seen in retail in a long time. Lukes emphasized a strategy of buying smaller properties with smaller tenants, arguing that this approach requires less landlord capital for growth. He also cited the work-from-home trend as a long-term driver for suburban convenience retail, and noted that the company uses cell phone data for both leasing and acquisition decisions.
“The spin-off established Curbline as the first publicly traded REIT solely dedicated to convenience properties, creating a unique and growth-oriented company with no debt and significant cash on hand to expand.”
“Institutions have historically focused on large format grocery-anchored retail because they had reliable data like tenant sales, but the advent of geolocation data from cell phones since 2018-2019 has enabled institutions like us to confidently invest in unanchored convenience properties with robust customer traffic da...”
“Convenience properties thrive because customers are running errands quicklyβtwo-thirds of our customers spend less than seven minutes on siteβmaking these properties highly desirable for tenants who pay premium rents for access to wealthy suburban consumers.”
“Our portfolio balances about 70% national credit tenants like Starbucks and Chipotle with 30% local tenants, which provides a good mix of growth potential and risk management, as local tenants often have shorter leases but are very sticky.”
“We avoid full-service restaurants because their buildings are often purpose-built and less adaptable, preferring quick service restaurants and other convenience tenants that fit into ubiquitous, similar-sized spaces, which lowers tenant turnover costs.”
“Having no debt and a pile of cash at IPO is unique for a REIT; it gives us runway to make investments before needing further equity, allowing us to grow prudently despite fluctuating interest rates.”
“We focus on simplicity to avoid the complexity discount in public REIT markets, staying very focused on our mandate to protect downside for investors while showing significant growth potential.”
“Parking is the number one detail in evaluating convenience retail properties; for example, replacing a low parking user tenant with a high parking user like a gym can significantly impact asset management and tenant mix.”
“We actively avoid mixed-use developments because densification in suburban areas often reduces convenience due to parking and access issues, which conflicts with the American suburban lifestyle we target.”
“AI and data analytics have made it significantly easier to analyze property performance and tenant site selection, improving investment decisions and enabling tenants to pay higher rents through better customer targeting.”
“About six months ago we announced a spin-off of a new company called Curbline that will be spun-off in the fourth quarter from SITE Centers, and that business is to grow by buying assets, particularly small retail assets that are convenience oriented.”
“We have almost $200 million of deals that are moving towards contract to buy, and to fund those and to make the spin take place, we're also selling a lot of properties.”
“We've got a little over two and a half billion dollars of properties that we've either sold, were under contract, or we've awarded to buyers in the last six or eight months, so we've got a lot of transaction activity happening right now.”
“This year is the most transactions I've seen take place in retail in a very long time; it's a very active market right now.”
“Retail is in a euphoric moment right now; tenant demand is very high, there's very little space left on the market, rents are growing, tenants came out of COVID very strong and looking for space.”
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