Every year, one of my personal highlights is the International Council of Shopping Centers (ICSC) RECon convention in Las Vegas. It’s a chance both to connect with the fascinating leaders in our field, as well as to see a few steps into the future. RECon bills itself at the “global convention for the shopping center industry,” and that label is an accurate one: Over 1,000 exhibitors and more than 32,000 attendees make RECon the largest convention in the industry. It’s a chance for us to gauge what new and emerging trends might be on tap for the months and years ahead.
There was a lot of optimism and energy heading into this year’s event, and I think it turned out to be justified. There was a sense that, in 2014, the retail real estate market is back to its old self, with lots of activity, energy and deal-making. Anecdotally, my own calendar and those of many of my acquaintances were jam-packed, which hasn’t always been the case the last several years in the aftermath of the recession.
From an attendance and logistics standpoint, I was also struck by two things: the 2014 conference didn’t feel as crowded as usual, but was actually busier than ever. The recent move to locate off-site by some of the biggest exhibitors has contributed to the sense that the crowds had ebbed somewhat, but it’s also noteworthy that the event organizers expanded to include the Las Vegas Convention Center’s North Hall in 2014 (in addition to the Central and South Halls that have traditionally hosted the event). Just to give you a sense of the size and scale of RECon, getting from the South Hall to the North Hall is a good 15-minute walk — quite a hike (one that I’m sure seemed even longer for my poor female counterparts in heels).
As for what I saw in terms of industry outlook and trends, there were two definite standouts. The first, which I admit was a bit surprising to me, is what seemed to be the proliferation and rapidly growing popularity of hybrid centers. In my time in Vegas, I saw a large number of projects either being developed or reworked into hybrids. What was especially interesting to me is that these hybrid developments, with a mix of power tenants and smaller retailers, are not just popping up in under-malled markets. They seem to be everywhere, and they have the potential to exert broad regional appeal.
The other development that stood out to me is that there was an eye-opening amount of emphasis on restaurants — specifically chef-driven concepts. Many developers are talking about local chefs anchoring their projects. This is a trend that I’ve been talking about for some time now, and it’s clearly no longer emerging — it has clearly emerged! I’m personally excited by the prospect of more unique dining destinations, as I think innovative and appealing restaurant concepts make projects more unique and allow them to pull from larger geographic areas.
The key takeaway here is that I think these are not unrelated trends. Rather, they are two examples of how the industry is becoming more sophisticated and more adept at tenanting to the market, rather than to a formula (which is how so many malls were developed and managed through the 80s and 90s in particular). Each market is unique, and there is no such thing as a one-size-fits-all solution. I think that more flexibility in terms of design and retail and mixed-use options will equate to more vibrant, interesting and commercially successful centers. Really, it’s not about making the mall obsolete; it’s a movement toward improving our dated approach to retail tenanting. In one way or another, I believe that all retail and mixed-use centers (including traditional malls) are going to be hybrid centers in the not-too-distant future.
If you attended the 2014 RECon convention, I’d love to get your thoughts on these and other trends, as well as your impressions of the conference itself. Did it live up to your expectations? What hot and noteworthy developments caught your eye? Let’s keep the conversation going! Leave a comment below or send me your thoughts via email at Jeff@JeffGreenPartners.com.
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