Name: Brad M. Hutensky
Principal and President, Hutensky Capital Partners
Age: 54
Experience: 32 years
Commercial real estate runs in the Hutensky family. Allan Hutensky founded Bronson & Hutensky in 1979 and co-developed CityPlace, the 39-story office tower in Hartford that remains Connecticut’s tallest building. His son, Brad Hutensky, joined the firm in 1989 and Allan Hutensky retired in 2000. Brad founded Hutensky Capital Partners and its first investment fund in 2002. HCP currently owns 2.3 million square feet of retail properties across the U.S. A Harvard Business School graduate, Hutensky also is a board member and former chairman of the International Council of Shopping Centers.
Q: When you founded the Hutensky Capital Partners investment fund, why did you decide to focus on the retail sector?
A: We felt the best way to provide strong risk-adjusted returns for investors was to focus on one property type. Given our more than 30 years’ experience in retail real estate, that was a natural sector to focus on.
Q: What’s the geographical makeup of the portfolio?
A: We’re located in the 15 largest metropolitan statistical areas in the U.S. All of our properties have an added-value focus. There’s some opportunity to increase value from the time we buy it to the time we sell it.
Q: What criteria do you use to evaluate potential acquisitions?
A: There’s a couple of things. We look at the quality of the real estate and the strength and performance of the tenants, especially the anchors. We look at visibility, the access, the position relative to other properties in the market. And then of course the potential to increase value.
Q: How has the decline of anchor stores affected the value of retail properties?
A: Retail real estate in general has had volatility and part of it is created by retailers figuring out the optimal mix between in-store sales and selling via the Internet. And that has led to some tenants growing and other tenants contracting and in some cases closing their doors. Different uses have performed better than others, but as far as our strategy, we are very comfortable looking at tenants in any shopping center deciding if people need to be strengthened or if they need to be replaced, and doing the right thing for the property. Volatility is a huge opportunity for us. We actually look for properties that have a dynamic nature of the tenants, where we can create some value from solving those problems.
According to the Department of Labor, 92.5 percent of sales are still done in stores. And that number is probably a lot higher than most people suspect given what they read in the media. Retail is always a changing business and there’s been many waves of change over the history of the shopping center. Today, retailers are just starting to scratch the surface of how to use the Internet to attract people to stores, such as ordering online and picking up items at the stores. Retailers are starting to see the benefits of the Internet and that’s actually starting to make the strong retailers stronger.
Q: What are ICSC’s top current priorities?
A: Certainly ICSC continues to fight for passage of marketplace fairness, which would require all retailers to collect sales tax when a sale is made. If you bought an item in another state and it was shipped for you, that retailer would have to collect sales tax the same as if you bought it in your state. That’s very important, because right now the government is allowing a subsidy for an online retailer that doesn’t have a nexus in this state. That’s really taking money from local and state budgets. Also, there’s been a dramatic increase in “drive-by” ADA (Americans with Disability Act) lawsuits where the shopping center owner has not much choice but to pay a settlement to make that go away as opposed to fighting it. That was never the intention of the framers of the ADA. Clearly owners want to abide, but in cases where the angle of a ramp is, say, one degree off or a mirror in the bathroom is a quarter of an inch too low, that’s really not what we need.
Q: How healthy is the retail market in Connecticut?
A: I believe it’s a very local business so you have to look at each market to answer that question. There’s some markets where sales are terrific and in these places rents are higher and occupancy is very high. Seritage Growth Properties, owner of the Sears store that is closing at Corbins Corner (in West Hartford) has already announced a number of retailers that are going in, REI and Shake Shack, and they’re going to redevelop that property. That’s a case where a property that’s not doing well is going to be turned into something that’s highly productive, right across from Westfarms Mall.
Hutensky’s Five Most Memorable Pars:
- #18 Pebble Beach Golf Links
- #17 TPC at Sawgrass
- #14 Ballybunion Old Course
- #5 Pine Valley Golf Club
- #4 Fishers Island Club
