From Bricks to ClicksWhen Demographics and Technology

Collide

• Founded in 1954 & headquartered in Miami, Florida

• 2nd largest homebuilder in the US

• Has delivered homes to more than 750,000 families

• More than 5,500 associates across 18 states

HOMEBUILDING & LAND

FIVE POINT

Land Development & Entitlements

COMMERCIAL

Retail & Office

RIALTO CAPITAL

Investment & Asset Management

FINANCIAL SERVICES

Title & Mortgage

MULTIFAMILY

Apartment Communities

Evolution of Retail

pre-retail

the general store

mail order catalogues

department stores

suburban shopping malls

open air malls

mixed-use

Retailing Today

E-Commerce

The Millennials

Experiential Retail

E-Commerce

E-Commerce

2013 Retail Snap ShotTotal Retail Sales $5.09 trillion

Retail Sales Increase over 2012 4.2%

Total Retail Sales (excluding cars & food)

$3.57 trillion

E-Commerce Sales $263.3 billion

E-Commerce Sales Increase over 2012 16.9%

Percentage of Total Retail Sales 5.2%

Percentage of Retail Sales (excluding cars & food)

7.4%

Source: US Dept. of Commerce

E-Commerce Sales Trends

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013$0

$50

$100

$150

$200

$250

$300

(US$ billions)

Source: US Dept. of Commerce

2013 Holiday Season

• Store Traffic Sales

• 13% increase in e-commerce sales over 2012

• 54% “last minute” shopping increase

• $1B Internet Sales Days• 2013: 10• 2012: 0

Source of E-Commerce Sales 2013-2014

Desktops - 71%Phones - 18%Tablets - 11%

8 main trends of

June 29, 2007

1. Mobile Goes Mainstream

2. Your Phone Is Your Wallet

3. Multi/Omni Channel Retailing

Multi/Omni Channel Retailing

4. Mass Customization

5. Faster Delivery Times

6. High Tech Coupons

7. Better In-Store Experience

New AT&T store, Manhattan

8. The Shrinking Big Box

Millennials American teens and twenty-somethings (born after 1980) who are making the passage into adulthood at the start of the new millenium

Millennials account for 21% of consumer spending . . . and 33% of their spending is on nonessential items

Millennials make up the largest percentage of the workforce

American Generations

Silent Generation

1927-1945 • Disciplined & Self-Sacrificing• Avid Readers – especially newspapers

Baby Boomers 1946-1964 • Hard working & Driven• Television, Rock ‘n Roll, Activism

Generation X 1965-1979 • Individualistic & Wary of Commitment• “Before” and “After” Computers & Cell

Phones

Generation Y “Millennials”

1980-2000 • Entrepreneurial & Tech Savvy• Digital environment, Internet, Smart

Phones

Generation Z 2001 - Today • Culturally Diverse & Over-saturated with brands

• Electronic-centric & Less Interested in Toys

• Already have Eco-Fatigue

The Millennial Demographic

Millennial Identity

• Technology savvy• Confident and self-

expressive• Liberal viewpoints

and open to change

• Ethnically & racially diverse

• Upbeat• On track to

become the most educated generation in American history

Politics & Religion

• Less likely to associate with organized religion

• Primarily “Independent” but tend to vote democratic

• Only 2% have served in the military

• More optimistic about America’s future than any other generation

Technology• 92% have a

smartphone and a laptop

• 83% sleep with their smartphones

• 81% are on Facebook

• 74% feel that technology makes their lives easier

• 50% have posted a “selfie” online

• Millennials spend 21 hours/month on social media

Economics• Began to enter the

workforce during the recession

• High levels of student loan debt

• Lower levels of wealth & personal income

• 1 in 8 have moved back in with parents

• 21% are married• 34% have children• Price conscious

and deal savvy

Source: Nielsen & Pew Research Center

Millennial Shopping Trends

• 88% of Millennial smartphone owners used their smartphones for holiday shopping

• 77% browse online before purchasing in the store – nearly 17% higher than the general population

• 56% admitted to browsing for an item in the store and then purchasing it online from a different retailer – double the rate of the general population

• 19% have been in a store and purchased an item via their mobile phone from a different retailer while still in the store – double the rate of the general population

• 89% would not return to a store if the inventory they confirmed was there was not available upon visit

80% of Millennials consider themselves price conscious and promotion sensitive

Extreme Couponing

97% of Millennials would return to a retailer if

provided with a discount for future shopping events

92% download coupons to their retailer cards before shopping and 80% at the store

79% use paperless coupons

67% go looking for deals after hearing

about them on social media

80% are more likely to frequent a store if it provides a rewards

program

Experiential Retail

59% of consumers say they have all the material possessions

they need

Consumer experience is the single most important factor in continued

growth for retail brands.

Experiential retail is one-on-one engagement between a company’s offering – either product or service –

and the consumer themselves.

Shoppertainment

Virtual Grocery Shopping

Tesla Showrooms

Pop Up Shops & Virtual Storefronts

Top Performing Malls in the US - 2013

Mall Location GLA Sales/SF

Bal Harbour Shops Bal Harbour, FL 450,000 $2,555

Forum Shops at Caesars Palace

Las Vegas, NV 636,000 $1,750

Shops at Columbus Circle

New York, NY 338,000 $1,600

The Grove Los Angeles, CA 575,000 $1,400

The Mall at Millennia Orlando, FL 1,118,000 $1,250

Ala Moana Center Honolulu, HI 2,100,000 $1,200

The Mall at Short Hills Short Hills, NJ 1,370,000 $1,110

The Americana at Brand Glendale, CA 450,000 $1,110

Aventura Mall Aventura, FL 2,700,000 $1,100

Tysons Galleria McLean, VA 824,000 $973Source: ICSC – Shopping Centers Today

Development Impact

• Smaller, Urban Mixed-Use Centers

• Transportation Oriented

• Highly amenitized• “Fiberhoods”• Social Media

• Dramatic Change in Merchandising Strategies• Old Approach: merchandising mirrored the way we bought our clothes –

compliments with large chain stores• New Approach: merchandising mirrors the way we live our lives – specialty,

green, quick serve, chef-driven farm-to-table dining, wellness

Question: Is it sustainable? What happens when baby boomers need congregate care and millennials need schools for their children?