The lifestyle landscape hasn’t been spared the winds of doom and gloom that have blown across the nation since late 2008. But the still-popular shopping center format has managed to persevere, fortifying itself with a combination of lessons learned, smart tenanting techniques and the flexibility to alter and enhance its form as the economic climate dictates.
In this special real estate feature on lifestyle centers, Chain Store Age focuses on two companies that have stayed true to the open-air concept, continuing to believe in lifestyle’s viability—beliefs not misplaced as evidenced by the success of the specific centers covered on these pages.
Columbus, Ohio-based Casto has found continued success with the lifestyle format, largely by incorporating additional uses such as office, hotel, restaurant and entertainment with its residential and retail components. This hybridization of the open-air lifestyle center has given the format staying power—and Casto is making the most of it.
Driven by Casto’s affiliate company Casto Lifestyle Properties, headquartered in Sarasota, Fla., lifestyle properties with the added value of mixed-use are marching on even in troubled times—Randhurst Village in Mt. Prospect, Ill., near Chicago, is the redevelopment of an existing enclosed shopping center into a new mixed-use lifestyle destination with retail, restaurants, entertainment, apartments and a hotel. And to the south, in Morrisville, N.C., the company has launched construction on Park West Village, a dynamic village to include major retailers, restaurants, movies, residences, office space and more.
The Cordish Co., based in Baltimore, has a unique take on lifestyle—much of the acclaim generated by the company’s signature urban projects has been due to the sheer entertainment value of each. Cordish has clearly added the sizzle to the steak, injecting an ‘urban wow’ into lifestyle and lifting the format to exciting heights.
Kansas City Power & Light District, in Kansas City, Mo., has transformed nine city blocks in the heart of downtown into a mixed-use retail, entertainment, office and residential mecca. The development is drawing from a 300-mile radius—proof that no matter which way the wind blows, the right format in the right location, with the right mix of uses, has magnetic pull.
Lessons learned: Paul Rutledge, VP of operations for Casto, is quick to point out that, no matter how many successful lifestyle centers you have under your belt, there are always lessons to be learned from the one that came before. “If I had a written list of ‘lessons learned,’ it would be to remember that good retail is good retail,” said Rutledge. “Good retailers like to be with other good retailers.” Grouping tenants, rather than creating stand-alone locations, is a boon, not a drain.
In the case of The Cordish Co.’s lifestyle developments, which fall under the urban districting umbrella rather than the more standard suburban open-air format, lessons learned are all about elevating the outdoor environment.
“From a master-planning perspective, the most important lesson gained from our districts was to animate the sidewalks, adding outdoor seating and an outdoor flow, versus creating an internal, enclosed development,” explained Blake Cordish, VP of development.
In the case of Kansas City Power & Light, keeping the project facing the streets allows it to link with the surrounding area, said Cordish, generating activity that transcends the boundaries of the district. “That’s the key guiding barometer to the success of our districts—if they spill out beyond the four walls of the district.”
Tenant typing: There’s no question that tenanting is a huge issue among lifestyle centers. A flurry of announcements—many from lifestyle retailers—that expansion plans are scaled back, on hold, or worse, that store closures are imminent, has left many developers adrift in a sea without an anchor. But, despite the difficulties, both Rutledge and Cordish agree that quality tenants are still looking for opportunity.
“Maybe not all of them are expanding, but the good retailers are still very active in the marketplace via relocating stores and preparing for their future,” said Rutledge.
The district concept has largely insulated Cordish, and its tenants, from the downturn. “Our execution is different than that of a retail-oriented lifestyle center,” said Cordish. “Shopping is not the driver of our visits, but rather is based on impulse.” Entertainment and experiential retail, which anchor the company’s districts, are still thriving, said Cordish, particularly in the strong secondary markets that are the company’s focus.
Marching on: And so, the lifestyle format marches on. Kansas City Power & Light opened its grocery store at the first of the year, a turning point for the district. Cosentino’s Downtown Gourmet Market, a 35,000-sq.-ft. destination, is the high point of the family-owned Kansas City company’s storied 60-year history, as the downtown location features sushi, salad and espresso bars and sophisticated prepared foods augmenting the standard grocery aisles.
“Cosentino’s uniquely combined both prepared foods and staples shopping for a true urban experience,” said Cordish. “One of our goals for this broad district was to become the heartbeat for the existing downtown population and be a spark plug for future growth. The grocer was a huge part of that.”
Randhurst Village, located in Mt. Prospect, Ill., a suburb of Chicago, will feature the redevelopment of an existing 100-acre enclosed shopping center, Randhurst Mall, into an open-air mixed-use lifestyle center destination. The Casto project involves the de-malling of the space, yet all current anchors will remain open during construction, including Costco, Borders Books, Home Depot, Bed Bath & Beyond, Carson Pirie Scott, AMC and Jewel-Osco.
This renovation and expansion will add hospitality, office and residential components, and will introduce a lively mixed-use Main Street-level presence to the space. New landscaping and streetscapes will line the avenues and complement natural gathering spaces. When completed in 2011, the finished project will include 1 million total sq. ft., with 100,000 sq. ft. of hotel and 90,000 sq. ft. of office.