- November 22, 2024
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The retail industry was on fire when Greg Sembler led the development of a St. Augustine outlet center in the late 1980s. The economy was in expansion mode and branded fashion — hello, Reebok and Champion — was having a moment.
In preparation for that opening Sembler, with St. Petersburg-based Sembler Development, recalls reading a report that around one-third of all retail sales nationally came from a department store. That industry model, once a strength, has changed dramatically. Today, Sembler says, that figure is closer to 3% — a metric that crystallizes the challenges the firm faces in 2020 and beyond.
The company, which Sembler’s father, Mel Sembler, founded in 1962 and specializes in grocery-anchored retail, has had a solid three-year run despite industry struggles illuminated in that shopping center decline nugget. In total, the firm has developed more than 350 projects, encompassing 29 million square feet and another 10 million or so square feet of leased and managed space. It has another 750,000 square feet under development and construction in its 2020 pipeline. Officials decline to disclose specific revenue figures.
“The secret to our success,” Sembler says, “is the relationships we’ve developed with the retailers.”
Greg Sembler watched his dad work as a young boy, and by 16 he had part-ownership in a Pasco County Publix center. He joined the firm full time in 1983 and has been CEO and chairman, among other leadership roles. He moved back to the CEO role Jan. 1, keeping the chairman post while taking over for former CEO Ron Wheeler, who left amicably to pursue other ventures.
Sembler Development has about nine or 10 projects in some of form of development or planning, and others in the pipeline. A top client and partner is Publix, for which it has built more than 50 centers, and, Sembler adds, it’s doing more for them currently than ever before. It’s also done work for Winn-Dixie, as well as drugstores, such as CVS and Walgreens, among other build-to-suit clients. “[If] interest rates remain low, and the job market remains strong,” Sembler says. “People will not stop shopping.”
‘I love the challenge of development. I love that you start with a clean slate and build from there.’ Greg Sembler, Sembler Development
But with the disruption e-commerce has brought to the traditional shopping center Sembler Development excels in, the question, of course, is will people continue to do that shopping at brick-and-mortar stores? “As long as we don’t see drones dropping grocery bags out of the sky, I think will be OK,” Greg Sembler quips. “I’m keeping my fingers crossed.”
On a more serious note, Sembler cites the Sunshine State population surge — some 900 people a day — for a reason he’s optimistic about both his company and grocery-anchored retail. The grocery industry rule of thumb, he says, is to open a new store every 12,000 to 15,000 people who move into an area. “That’s a new grocery store every 20 days or so,” Sembler says.
Sembler Development is essentially broken into three parts: shopping centers, build-to-suit projects and acquisitions and dispositions of centers through a real estate fund with Tampa-based Forge Capital Partners. The first two have been the company’s bread-and-butter, while the fund, Sembler says, is a burgeoning opportunity.
The initial fund raised $150 million, though one in the planning stages will likely take on about $200 million in projects. The funds invest in shopping centers in low to medium income areas through the federal Community Reinvestment Act. “That’s been a really good business for us,” Sembler says.
The firm can seize those opportunities, in the fund and other areas, Sembler says, partly because of its flexibility. That nimble strategy also helps it fend off competition for projects, which he says has increased significantly in the low-interest rate environment. “The number of developers who want to be in the market is growing,” he says. “There’s no lack of people trying to put together deals.”
Despite those and other challenges, Sembler looks forward to 2020 and the ensuing years, both back as CEO and in personnel: his nephew, Logan Sembler, and his daughter, Eve Sembler, are two potential future executives. That, and solving the retail puzzle, motivates Sembler, 58, to come to work everyday.
“I love the challenge of development. I love that you start with a clean slate and build from there,” says Sembler, who cites his dad, Wheeler and another former Sembler Development CEO, Craig Sher, as mentors. “I love the deal making. It’s entrepreneurial. It’s exciting.”
To read more on the 10 top things to watch out for in 2020, click the links below.
