Blockbuster retail deal in Canada
One of the largest grocers in Canada has just expanded its presence in the drugstore business.
Metro Inc., the third largest food retailer in Canada, on Monday announced a deal to acquire the Jean Coutu Group, which operates more than 400 pharmacies, for $3.6 billion. The deal creates a combined food and pharmacy retailer with annual sales of $12.8 billion, and an overall network of more than 1,300 stores in Canada, with 677 drug stores.
Metro's existing pharmacy distribution and franchising activities will be combined with those of the Jean Coutu Group. Jean Coutu will operate as a stand-alone division of Metro with its own management team led by Francois Coutu.
"Bringing together our two highly respected and longstanding Quebec brands represents an exciting milestone in the history of the Jean Coutu Group," stated Jean Coutu, chairman of the Jean Coutu Group. "I am confident that this combination will ensure the safeguard of our entrepreneurial vision and corporate values as well as the perennial strength of the brand and will enable us to pursue our growth plan."
"We're honored to become the steward of the iconic Jean Coutu Group brand and we intend to build on this exceptional legacy," added Eric La Fleche, president and CEO Metro. "It is a unique opportunity to bring together each company's expertise to better serve the growing consumer demand for healthier choices, value and convenience," he said. "The Jean Coutu Group's extensive retail network and state-of-the-art distribution center will provide us with increased scale and reach, operational efficiencies and enhanced growth potential."
Project Profiles: Mixed-use retail
Streets of St. Charles (bottom right)
- Location: St. Charles, Mo.
- Size: 27 acres, 1 million sq. ft. when completed
- Developer and owner: Cullinan Properties Ltd.
- Key tenants: Dining: P.F. Chang’s, Firebirds Wood Fired Grill, Bar Louie, Tucanos Brazilian Grill, Five Guys Burgers and Fries, Pieology Pizzeria, and First Watch and local and regional eateries include Prasino, Wasabi, Mission Taco Joint, Dewey’s Pizza, Picasso’s Coffee House, and U-Swirl. Entertainment: AMC Theatre with eight screens and oversized, reclining seats, in addition to MacGuffins Bar. Retail and services: Leopard Boutique, MOD, Sole & Blues, Olivino Tasting Bar, Rocky Mountain Chocolate Factory, Orangetheory Fitness, Supercuts, MassageLuXe, Think Pink Nail & Spa, Streets of St. Charles Dental, and RCS Bank.
- Other uses/components: 180-room Drury Plaza Hotel, Tru by Hilton, 300-plus luxury residential apartments, two parking decks totaling more than 1,500 spaces, and on-site trolley service to local attractions.
- Construction status: Approximately 80% is complete. Tru by Hilton is expected to open next spring, and construction on a 60,000-sq.-ft., three-story building with ground floor retail and two floors of office space will break ground next spring. A limited number of spaces and sites remain.
Streets of St. Charles has established itself as the destination in St. Charles County and the surrounding area for dining, shopping, entertainment, and as a place to live and work. This premier development with excellent access and visibility from Interstate 70 includes more than 1 million sq. ft. of space in a convenient and distinctive environment unlike anything in the greater St. Louis metro area. Formerly home to Noah’s Ark Motor Inn and Restaurant, the site began its transformation in 2008 into a vibrant and energetic development that is now home to luxury apartments, a state-of-the-art movie theater, offices, two hotels, unique shops, and some of the best restaurants in the St. Louis area. Streets of St. Charles has an energetic vibe and contains a terrific blend of locally owned businesses with nationally known names.
- Location: Santa Clara, Calif.
- Size: 47,811 sq. ft. of retail
- Developer and owner: Irvine Company
- Key tenants: Nob Hill Foods, The Yellow Chilli, Pressed Juicery, California Pizza Kitchen, Konjoe Burger Bar, Vitality Bowls, and Starbucks.
- Other uses/components of project: Walkability, accessibility, and convenience have never been more prized, particularly so in this tech corridor. With Apple, Intel, Nvidia, Qualcomm, and Texas Instruments nearby, the centrality of Monticello is one of its greatest perks for both residents and tenants. The retail at this upscale mixed-use development is highly visible from Lawrence Expressway and Monroe Street with over 84,000 cars passing by each day. For the next generation eager to reduce its carbon footprint, Monticello is steps from the Lawrence Caltrain station, which links to Santa Clara, San Mateo and San Francisco counties.
For Irvine Company, knowing its audience is essential in tailoring an authentic neighborhood experience and meaningful social hub. A diverse mix of stores and restaurants reflect the residential community — cult-status included. The Yellow Chilli restaurant debuted its U.S. flagship by acclaimed Indian chef Sanjeev Kapoor. And come October, Nob Hill Foods opens its first Santa Clara store customized to the Monticello style where an alfresco café fuels the indefatigable tech crowd with coffee and local craft brew. Additionally, the 24,000-sq.-ft. anchor tenant will feature meat, seafood, organic produce, a bakery, and expanded grab-and-go meals. The live-work-play blueprint was conceived with a certain resident in mind: dynamic, urban, connected, progressive. The resort-inspired Mediterranean vibe encourages an active lifestyle with pools, a fitness center, and abundant indoor-outdoor living spaces, including lounges and courtyards. Here, year-round social events cultivate a compelling social fabric. The integrated concierge: Expect text-alerts of pressing happy hours.
Butler Town Center at Stengel Field(bottom left)
- Location: Gainesville, Fla.
- Size: 450,000 sq. ft. of retail, restaurants, and residential
- Developer and owner: Butler Enterprises
Key tenants: Leases signed with Whole Foods Market, P.F. Chang’s, Irish 31, The Village Jeweler, Grub Burger Bar, and newly renovated, recliner seating Regal Cinemas. In lease negotiations with tenants to fill 13,000-sq.-ft. Stengel Field Food Hall and other new-to-market retailers, boutiques, and restaurants.
Other uses/components of project: Stengel Field Food Hall, the first chef-curated food hall in the greater North Central Florida region 202 luxury apartments located in The Residences, the top five floors of a six-story building, and The Terraces, situated above the retail and restaurants on the main street major “gathering place” component complete with high-tech misting “cloud” fountain and adjacent spray fountain, and an area for staging/entertainment and seating.
- Construction status: Under construction now for a phased opening, beginning with Whole Foods and adjacent retail in spring 2018.
This Main Street-style retail and residential project will be the first of its kind in North Central Florida, creating a new community where people will live, shop, dine, and play near major universities and rapidly expanding major medical facilities. As the capstone development in The Neighborhoods of Butler, which include Butler Plaza (est. 1975) and Butler North (est. 2016) in one area, Butler Town Center will include boutiques and dining experiences not found anywhere else in the region, the first Whole Foods Market in the region, street level amenities including fountains and landmarks for gathering places, and the unique Stengel Field Food Hall, which will offer fine dining from renowned, locally based chef Bert Gill, in addition to national, regional and local dining options, as well as pay homage architecturally to the property’s history as a WWII airfield. Butler Town Center will serve as the emotional core of a 14-county market trade area.
Celebration Pointe(top right)
- Location: Gainesville, Fla.
- Size: 1 million-plus sq. ft.
- Developer and owner: (Owner) Celebration Pointe Holdings, LLC (developer) Celebration Pointe Development Partners, LLC.
- Key tenants: Bass Pro Shops, Regal RPX Theatre, Miller’s Ale House, Kilwins, Uniform Destination, MidiCi, The Neapolitan Pizza Company, Azulene Day Spa, and Liquid Ginger. In lease negotiations with a number of first-to-market retailers and themed/casual dining.
- Other uses/components of project: 140-room Hotel Indigo, Infotech software company headquarters, multi-tenant Class A office building, luxury apartments, and luxury town homes.
- Construction status: Bass Pro Shops is open. Regal will open in Q1 2018. Phase 1 “main street” retail to open in Q2 2018.
Celebration Pointe fills a major void not only in the Gainesville area, but the entire North Florida market. The project provides a unique blend of retail, entertainment, fine dining, hospitality, office and residential offerings all organized as a city within a city. Immediately adjacent and highly visible to one of most highly traveled north-south Interstates in the country ( I-75) as well as a 700-acre conservancy complete with a major trail system (Archer Braid Trail). Segregated into distinct districts yet systematically connected through an internal street system, complete with access to multi-modal transportation, the highly walkable and architecturally pleasing environment is centered around its signature feature, The Promenade at Celebration Pointe. This pedestrian friendly environment is not just another main street project. Guests and residents will be treated to not only entertainment, dining and shopping, but regular events as well as a very pleasing environment, Easily accessible, highly visible, and engaging, Celebration Pointe is destined to be north Florida’s signature destination.
The modern case for mixed-use retail
We have a tendency to take things that have been with us forever, reinvent them, and give them new names. Mixed-use centers, for instance, are essentially the 21st century version of downtowns. But whereas America’s towns grew up organically alongside harbors, rivers, and transportation crossroads, mixed-use centers aren’t always able to be so logically placed.
“Mixed-use centers have caught fire over the past 15 years. They really went crazy in the pre-recession years, but a lot of those projects should never have been built,” said developer Ralph Conti, who got his first taste of live-work-play while at Sears’s Homart Development Company in the mid-1990s.
“Everybody wants mixed-use, but it’s not about what some politician wants,” said Conti, now a co-managing partner at Celebration Pointe, a mixed-use center going up in Gainesville, Fla. “A lot of deals got forced that way, and then they had problems. Mixed-use is going to work best in densely populated areas where there are barriers to entry. An urban footprint is usually where mixed-use works best.”
Conti believes he’s found that in Gainesville, whose population of 131,000 and median household income of $32,000 belie the opportunity existing there.
“It reads like a tertiary market, but the daytime population swells by 100,000. We have the University of Florida with about 54,000 students, Sante Fe College with 28,000. Then you have the UF Medical Center, which brings in millions of people a year. It can be hard to get a hotel room in Gainesville,” Conti said.
Celebration Pointe will add 140 rooms to the market with Hotel Indigo. It will offer up luxury apartments, office space, a Regal RPX Theatre, and The Promenade at Celebration Pointe, a gathering place that fills one of Conti’s other key requirements for a successful mixed-use center: walkability. One locale plenty of north-central Floridians have been beating a path to lately is the area’s first Bass Pro Shops, which opened at Celebration Pointe this year.
“The reason we’re doing this project in Gainesville is that there’s a big hole in this market,” Conti said. “It’s been painfully slow-going, but we’ve been listening to the end users to tell us what it’s going to be.”
Also rushing into the breach with a mixed-use development in Gainesville is the Butler family, whose general store built in the ’30s blossomed into the city’s central retail complex. Now known as The Neighborhoods at Butler, the mega-power-center is composed of three distinct shopping areas housing a Walmart, a Lowe’s, a Sam’s Club, a Target, two Publix supermarkets, a Dick’s Sporting Goods, and a Best Buy.
New to the Butler mix, now under construction, is Butler Town Center at Stengel Field, a mixed-use project that will feature upscale shops at ground level, 202 luxury residences above, and a walkable town environment. Highlight attractions include a Whole Foods, a Regal Cinema, and a food hall with an aeronautics theme pegged to the site’s history as an airfield.
Despite the 150-plus stores and 1.7 million sq. ft. that Butler Enterprises presents to the Gainesville market, the company’s leasing consultant agrees with Conti that the market cries out for more.
“Gainesville has a large consumer base that is under-retailed,” said Gerardo Aguinis, a principal of The Zall Company. “There are over a million people in Alachua County and they have to drive one or two hours to reach the nearest major markets of Jacksonville, Orlando, and Tampa. We have a captive audience here.”
Aguinis notes that people already flock to Butler, but that new additions were needed to cater to their developing tastes. Luxury retailers, as well as some important national and regional players, were missing from the already wide selection of retail being presented at Butler Plaza.
“New generations don’t want old concepts, and that’s nothing new in retail,” Aguinis said. “Our leasing philosophy hasn’t changed. You need to create a destination, and it needs to be an environment where people want to gather.”
Indeed, the Temple of Retail concept that worked so long and so well for mall developers (and still does in many cases) is something not likely to be continued in massive new projects.
“Retail alone isn’t enough to sustain a center anymore,” said Kathleen Brill, VP and director of leasing at Cullinan Properties. “Our research is pointing to the fact that consumers are enjoying mixed-use centers so much because they can do so many errands in one area.”
And sometimes a location needs retail and a whole lot more. Cullinan found that to be the case in St. Charles, Mo., where the company bought and razed a famed local motor inn and restaurant called Noah’s Ark and is lifting the site to even greater prominence. Now about 80% complete, Streets of St. Charles is writing a new chapter in the life of the historic city west of St. Louis. At build-out, the 27-acre site will feature an eight-screen AMC theatre, two hotels totaling 260 rooms, and 300-plus luxury apartments. Some 400,000 sq. ft. is devoted to retail, dining, and entertainment. Tenants include P.F. Chang’s, Bar Louie, Leopard Boutique, Rocky Mountain Chocolate Factory, and Orangetheory Fitness.
Brill said communities nationwide have contacted Cullinan in hopes it could recreate the Streets of St. Charles in their towns, but she is in sync with Ralph Conti on the subject: Mixed-used doesn’t work just anywhere.
“Some of the elements we found successful in St. Charles were location — easy accessibility to an interstate — and voids in key areas such as entertainment and upscale residential,” she said. “This was almost a brownfield site before Streets was created, but local incomes have risen substantially in recent years and the time was right.”
Though mixed-use developments tend to be expansive projects, circumstance can dictate that huge scale is not essential to the concept. Monticello, which combines 47,811-sq.-ft. of street retail under apartments in Santa Clara, is a project of the Irvine Company, master-planner of entire communities in Orange County such as Irvine and Newport Beach. When it comes to live-work-play, Irvine started writing the book decades ago.
“The mixed-use concept is especially effective in Northern California, where land is very precious and there’s a housing shortage,” said Fred Collings, SVP of Irvine Company Retail Properties. “In Monticello, where you can assemble 800 to 900 apartment units and retail and amenities like fitness classes, common public areas, and lounges for computer work, you can make your product a real poster child for the live-work-play concept.”
Retail at Monticello is necessity-based, with a focus on restaurants for the time-pressed, Silicon Valley careerists who live there. Tenants include California Pizza Kitchen, Pressed Juicery, Konjoe Burger Bar, and Starbucks. Nearby employers such as Apple, Intel, and Qualcomm make the center’s location especially valuable.
Food and service-based retail dominate at Irvine’s NoCal residential properties, but exceptions are made when the market warrants them. “We’ll introduce other retail when we can determine through analysis that there is a hole in that market for an apparel retailer, but generally, we don’t have the square footage to accommodate apparel,” Collings said.
The bottom line: Mixed-use will continue to flourish, but not in the cookie-cutter fashion that enclosed malls did. Some will be big, some small. Some will have hotels and entertainment some will focus on residential and needs-based retail. It all depends on the strength of a locale and its needs.