CHARLOTTE – Mike Wiggins is that rare commercial real estate guy who is not only good at what he does but can explain why, both clearly and – bonus – with a little humor, too.
Wiggins, 57, is a partner at Charlotte’s prestigious Crosland Southeast. The Oklahoma–born, South Carolina-bred Wiggins came into real estate honestly, following his father, who owned a residential real estate firm in Columbia, where Wiggins says he worked “for 11 months, nine days and six hours” after graduating from the Citadel in 1979.
After his servitude to his dad was done, Wiggins went into commercial real estate, first forming his own company and then joining Columbia’s Edens & Avant, where he toiled as a vice president for retail development from 1992 to 1999.
He came to Charlotte in 1999 to work for Crescent Resources, for whom he completed 750,000 square feet of retail and had an additional 500,000 square feet in predevelopment, including 16 grocery-anchored neighborhood centers.
In 2004, Wiggins went to Crosland Southeast’s predecessor company as senior vice president for the retail division. When Crosland Southeast broke away three years ago, he became a partner.
Married for 31 years to Chris, Wiggins is the very proud father of Ryan, a 23-year-old adopted son who has Asperger’s syndrome. Wiggins volunteers his time to serve on the board of Philips Academy, which serves kids with special needs.
That resume might sound a little stuffy, but he is not. He met us in a conference room in the Crosland Southeast offices on the 13th floor of Charlotte Plaza wearing a polo shirt, and entertained us with mostly off-the-record stories of his misspent “South Cackalacky” teen years.
Let’s listen in, laugh a little – and learn.
What brought you to Charlotte? I started the retail development division for Crescent, back when it was owned by Duke Energy. I was there for four years, six months, three days and two hours.
Ha. I say that somewhat metaphorically. It was a lot of work, a very public job, working for a public company that was owned by another public company – two boards of directors to answer to. I went from a publicly traded to a private company, Crosland, in 2004.
You’ve worked for two really – what’s the right word? Sterling? – commercial real estate companies. Stellar. Sterling fluctuates with the price of silver. They’re high-class firms. Here at Crosland Southeast we deal in place-making.
Place-making? From our perspective, making a place nice enough to make the customers want to stay longer. In real estate vernacular, that means: Spend more money. We did Birkdale, for example, which I didn’t personally do.
Birkdale, Charlotte’s first big mixed-use development. Every town around here wants another one. We’ve heard that many times. I think it’s really the only true mixed-used development here, not just the first.
Straighten out the whole John Crosland-turned-Crosland Southeast evolution for us. We bought the retail division of Crosland from the Crosland family; John Crosland Jr. was the patriarch. The property management side of the business was sold to CNL out of Orlando. That explains the CNL-Crosland Southeast logo when you walk into the office. They’re over there.
(He motions toward the far side of the reception desk.)
We’re the high-entrepreneurial end, a separate business. We got office-sharing out of the deal, and $100 million in commitments.
Nice. For operating costs or investments? Great question; that’s a very important distinction. It’s committed to investment. The great thing is that we’ve deployed only about $8 million. It’s not all ours to just spend. We have to go back to them on every project. That cross-pollinates us.
Now break down what Crosland Southeast does. We have three buckets. The first is: We seek out single tenant, build-to-suit/ fee development.For example, we are a preferred developer for Family Dollar. It’s also tire stores, Krispy Kremes. The second bucket is neighborhood centers anchored by groceries. We have a Lowes Foods in Jacksonville, N.C., opening in September; and a Publix project in Cary opening in the first quarter of 2015. And, of course – everybody has written about this – we signed Whole Foods to put its third Charlotte store in Waverly.
Waverly – that’s going to be a Birkdale-type thing, yes? That’s the third bucket, the mixed-use side of our business, which is something I’m not as involved in. That’s more Peter (B. Pappas, Crosland Southeast’s partner). As far as Birkdale, there are other examples, but they are in larger and deeper MSA’s (metropolitan statistical areas), D.C. (the District of Columbia), for example. In a suburban setting, it’s hard to start stacking office, retail and industrial uses. The parking decks alone! Retailers want free parking to encourage business. Office is paid parking. And in residential they expect subsidized parking.
And integrating that is difficult? It’s a nightmare in documents. That’s why we have lawyers, to figure that out.
For a fee. Many, many fees. It’s not just the parking, but the parking is emblematic of the difficulties. At Birkdale, we got the right tenant mix. On the tenant side, rents went up in the multifamily (units) after the Starbucks went in.
Really? A high-end coffee place had that big an effect? The scent of the coffee beans being ground and brewed. It made it feel like a more livable and walkable place
There’s very little turnover in the restaurants at Birkdale, I’ve noticed. The restaurants are all basically local. There’s not a Del Frisco’s, but a Dressler’s. We brought in all those restaurants to help shape the streetscape – and the movie theater. They activate that Main Street. It’s a very human scale. Standing there, or walking along, you feel like you’re perfectly scaled. I say “we” when it was all Peter – Peter B. Pappas, by the way, not his cousin Peter A. Pappas, who does multifamily (at Pappas Properties, a separate company). It’s a real testament to Peter (B. Pappas) that 9/11 occurred during the leasing-up of Birkdale, and it didn’t hurt rents. He kept people focused on the timeframe. He got everybody to play nicely together. What you’re going to see more of in the future is what we’re doing on a project in Oak Ridge, Tenn., more public-private partnership.
Give us an example of how that works. Oak Ridge is our second major TIF project – tax-increment financing. The future projected gains in taxes are used to subsidize the current improvements that will lift the tax basis.
I’ve never heard it explained so succinctly and clearly. As you said, you’re more on the grocery store and single-tenant side. Yeah, it’s not as sexy. But we work together on these projects. We’re a “band of brothers” and partner-up on projects. We’re not parochial. We’re governed by a certain common set of rules. We work and play nicely together. It’s Peter, me, Tim Sittema, James Downs and Austin Williams – he’s our newest partner and opened our Raleigh office. Peter is the first among equals, but we all share 20 percent (of the business each).
Let’s talk grocers. Harris Teeter has a stranglehold on the market, but here come Publix and Whole Foods, Walmart. Everybody’s after a share of Charlotte’s stomach.
Ha. You really have an everyman way of putting things. Thanks, I think.In addition to the entrance of Publix and Walmart’s Neighborhood Market, I think in the next two years we’re going to see Sprouts (Farmers Market) headed this way.
Sprouts? That’s a new one to me. They’re out of Phoenix – a Fresh Market/Whole Foods kind of store. And with Harris Teeter owning most of the market, and with Kroger behind them now, I see them expanding their share of the market.
Wow, another high-end grocer. Sorry, that’s all I can think of to say. It’s going to be tough. Harris Teeter has such good will here. Lowes Foods tried to come in here years back and had a real tough time. The barrier (to) entry is high.
The Teeter near me, in Plaza Midwood, used to be shabby but now it’s a Taj Mah-Teeter. It’s the original, No. 1 store, at 201 Central Ave. Oh, wait a minute. Let me write that down.
(He scribbles on the back of a business card.)
That reminded me to ask them about their 201 Central brand. Where were we? Oh, what you’re seeing is that retailers gotta grow to survive. If they come in with one or two stores, they better have 10 or 12 planned. You’ve got to split the expense of coming in; you can’t split the startup expenses on a handful of stores.
Whole Foods is at three. Where do they go next? I would think, ultimately, if I had to speculate. . .
Speculate away. . . .that Whole Foods will go into a real urban area. Maybe inside the Uptown freeway loop. They’ll be up against Harris Teeter’s store at Fifth and Poplar (streets). Harris Teeter has found a very smart way of integrating into urban areas. They did it 30 times in the D.C. area with no prior experience with that model. That’s pretty amazing.
How do grocers figure out how to go where? I know that it’s complex, and that I’m in the peanut gallery, but can you explain it? About 14 to 15 thousand residents are inside the loop now, and they’re relatively upscale. You figure $50 a head a week for groceries, conservatively. That’s, what, $750,000 a week. That’s more than enough for a grocery store. But you’ve got other factors, like leakage: people who want to shop at a store on their way home, who want to go to a Whole Foods for a specialty meat, who want more SKU’s – items on the shelf – or want a cleaner store.
What’s the biggest challenge facing developers today? Costs are back with a vengeance after they dipped during the recession. But retailers expect vintage rents – the rents they paid during the recession. . .
When landlords were discounting rents. Exactly. Retailers have very good memories. This has been great, but I have a telephone call in a few minutes.
OK, just one more. Your son, Ryan, has Asperger’s syndrome. If you’d like to talk about that, we’d really like to hear about it. We’re proud to say he just graduated from CPCC with a certificate. He lives in a SouthPark condo and works at Harris Teeter. Autism and related disorders are epidemic. They were episodic before. I really wish I knew why this is happening. If I could do anything else with my life, if I had anything I could solve in my life, I wish it could be to solve this. There’s something about Ryan: He’s never had a bad day. He enjoys life. Through his experience with Philips Academy and CPCC, he’s going to be woven into the fabric of Charlotte. He’s got something going for him that puts him beyond the Asperger’s, and that’s having a big heart.