Inspiring Leaders in Our Changing Industry: Tom McGee, ICSC

This summer, Connect CRE is producing a series titled, “Inspiring Leaders in Our Changing Industry” as a follow-up to last summer’s “Leading in Tough Times” series. We’ve selected leaders around the U.S. and across the commercial real estate spectrum to discuss significant changes in the industry and their organizations. In this installment, you’ll hear from Tom McGee, president and CEO of ICSC.

Charting a New Course: How do you navigate the transition from established practices to pioneering new frontiers within your organization? 

First and foremost, the business case for a transition or evolution of our organization’s goals must be established. Is there a need to respond differently to market influences? Is the industry or the needs of our members shifting? Gathering input from my team, as well as our key external stakeholders, helps us understand both what needs to change and why. From here, we develop a strategic road map to navigate the transition, and communication becomes a key to success. Overcommunicating isn’t a bad thing and the need for transparency can’t be underestimated. 

A Triumph to Celebrate: What recent organizational accomplishment brings you the most satisfaction? What specific challenges did it overcome, and what key factors led to its success? 

The pandemic caused significant disruption in our industry, from both a core business and talent standpoints, and the importance of fostering a younger and more diverse workforce became even clearer in 2020. That year, we launched ICSC’s Next Generation Leadership Network (NGLN) as part of an initiative to support members and CRE professionals under 40. The NGLN meets regularly to discuss industry issues, network, and elevate their stature in the industry and as advocates and future leaders of ICSC. Initiatives such as this have paid off with our Next Generation membership growing by 13 percentage points since 2021.  

We also advocate for younger, diverse talent through the ICSC Foundation, the non-profit, charitable arm of ICSC, which has awarded $2 million in academic scholarships to college students interested in a career in CRE and coordinated 700 mentorship pairings. The ICSC Foundation partnered with Project Destined, a social impact platform providing underrepresented students with training in financial literacy, entrepreneurship, and real estate. This partnership launched the Retail Real Estate Bridge Program in 2023, offering undergraduate students a hands-on, career-based learning experience. Nearly 60 students participated in the pilot program, sponsored by eight ICSC member companies. 

Catalysts for Change: What are the essential elements for achieving significant progress within your organization and the industry as a whole? 

For me, the status quo is never an option. Retail real estate is the ultimate consumer-facing industry and to remain relevant, our members and our organization must continue to evolve and keep pace with change driven by the market.   

When I first joined ICSC in 2016, the headlines were proclaiming an e-commerce takeover and the end of brick-and-mortar retail. A few years later, the “retail apocalypse” narrative dominated the press as well-known national retailers announced store closings. This was followed by claims of a complete demise of physical retail as we know it, with a “here-to-stay” shift to online shopping during the pandemic. 

 Today, when it comes to physical space, demand is outpacing supply. Retail real estate fundamentals are solid and numerous tenants compete for vacant spaces. By continuing to innovate, the Marketplaces Industry has successfully navigated shifting market conditions to meet the needs of the consumer. By offering new digital tools for networking and dealmaking, changing our dues structure, and offering compelling programs to attract a younger, diverse talent demographic, ICSC is innovating to meet the needs of our members.   

 Industry Inspiration: What recent industry advancement impresses you the most, and why? 

 As the industry transforms, so too do the professionals in it, with more and more of the next generation entering the Marketplaces Industry. This includes emerging talent who are eager to network with experienced professionals and learn about the industry. In fact, we hosted nearly 500 students at ICSC LAS VEGAS this year, more than ever before, including those participating in the annual ICSC & UNC Retail Real Estate Case Competition, Student Speed Networking, and a Meet the Retailers lunch. 

The poise, confidence, and drive of the students involved in our programs are truly extraordinary. They are obviously tech savvy, but they don’t hide behind their screens. Our student members come to meetings with an open-mindedness that sets their generation apart. They are engaged, prepared, and willing to ask questions and learn what it takes to succeed in commercial real estate. 

The Road Ahead: Looking forward, what critical changes do you foresee for the industry in the coming years? What advancements do you hope for? 

 Between 2008 and the end of 2023, shopping center GLA grew at a substantially slower rate than retail sales, inflation-adjusted GDP, and the U.S. population. In fact, retail sales have grown almost 90% in that time period, while shopping center GLA has been limited to a mere 6.8% increase. With this in mind, I expect the mismatch between supply and demand of retail space to continue.  

 While sustained consumer spending, a continued focus on physical retail, and increased occupancy rates for retail storefronts and shopping centers are encouraging signs, uncertainties linger. Geopolitical turmoil and the upcoming presidential election may potentially disrupt these positive trends and shift consumer behavior and the economy. Additionally, the implications of AI and other transformative technologies are top of mind. 

Consumer behavior and shopping habits evolve constantly, forcing advancements in store design, customer service, and the use of the store. We’ve seen retail space transition from a place to make purchases to a place where experience matters and, most recently, to a place that is essential to fulfillment and product delivery. The ultimate goal for retailers and center owners is to offer consumers the flexibility to shop where, when, and how they want. 

Guiding the Next Generation: As we acknowledge the industry’s rising stars, what guidance can you offer them to become catalysts for positive change? 

Retail real estate is often thought of as a transactional business, where numbers matter the most.  This is no surprise given the dealmaking aspect of the Marketplaces Industry. However, behind every deal is a relationship that made it possible. While the industry’s rising stars need to be well-versed on fundamentals, such as lease negotiations, they also need to recognize the value of the soft skills required to facilitate meaningful connections with peers and experts in the industry. In our business, honesty and integrity are number one.

Click here to see the full Inspiring Leaders in Our Changing Industry series.