Now Trending: Hotel and Multi-Family Residential on the (High) Rise
“Now Trending” is an exclusive online series to chainstoreage.com, featuring trending topics that impact the retail real estate landscape.
At a time when the growing influence of millennials and the ongoing development, redevelopment and revitalization of urban communities continue to shape the commercial development landscape, the changes taking place in the hotel and multi-family sectors reflect many of those same demographic and development trends.
There are two noteworthy changes taking place concurrently that have a major impact on retailers. First, hotel and multi-family are crossing categories, rewriting some of the traditional rules and increasingly being developed immediately adjacent to each other. Second, the growing popularity of extended-stay hotels — and the corresponding changes underway within that category — have reinvigorated extended-stay and made a formerly drab format more appealing to travelers, especially millennials.
Coexistence and synergy
More and more clients are coming to me with questions about multi-family high-rise and hotel. Based on the feasibility studies that those clients have requested in cities like Boston, Chicago, Los Angeles and Atlanta, the concurrent development of new multi-family and (mostly) limited service hotel concepts is clearly on the rise.
On Lake Street in The Loop in Chicago, Bighorn Capital is working on a new high-rise project tower that will include 600 hotel rooms and 300 apartments. Nearby, architect and developer Thomas Roszak is planning a 33-story high-rise project with 265 apartments. The project is likely to invigorate a dark Loop corridor surrounded by transportation. In Atlanta, Simon Property Group is expanding the hotel and residential components around Phipps Plaza, a luxury retail regional mall in the city’s Buckhead neighborhood. An AC Hotel by Marriott is one of two major redevelopment initiatives in the works. Along with a luxury apartment complex being built nearby, the goal is to add density to enhance the existing retail environment and ultimately boost the overall value of the real estate. Buckhead is a natural fit for such a strategy, as the area already boasts abundant opportunities for extensive cross shopping with apparel, beauty, health, electronic and convenience retail, as well as a number of appealing restaurant options.
Photo: In the Buckhead area of Atlanta, a Hyatt Grand stands alongside the new Berkshire Terminus luxury apartments.
Simon is pursuing a similar strategy in a number of markets, and is looking at redeveloping as many as two-dozen properties in their portfolio to add or enhance a multi-family/hospitality component. Because greater density in the consumer demand component is such a critical factor for hotels, it is significant that the majority of these and similar efforts from other developers are taking place in cities where large populations of millennials continue to lead an urban resurgence.
Whether the explosive popularity of grassroots hospitality concept Airbnb is the cause or the symptom, the inescapable conclusion is that consumer’s hospitality expectations have evolved. Today, growing numbers of guests are looking for more convenient, chic and amenity-rich hotel experiences — and a number of extended-stay hotel concepts are adapting or being introduced — to accommodate those emerging priorities.
Marriott Residence Inn and Element by Starwood Hotels & Resorts (which plans to open 20+ hotels in the U.S. and Canada over the next two years) are two notable examples. Hyatt House represents Hyatt’s attempt to move into the expanding extended stay space. Hyatt House tends to be more of a suburban concept, typified by properties such as the Hyatt House in Evanston, Illinois near Northwestern University. Suburban extended-stay properties are often located near office parks, airports and regional malls, with convenience the prime consideration. Assembly Row outlets in the Boston suburb of Medford within walking distance of many hotels, is a classic example. In urban neighborhoods, walkability and a vibrant selection of nearby retail, dining and entertainment options is a key factor.
It isn’t just the big national chains that are expanding the extended-stay concept. Independents like ROOST Apartment Hotel in Philadelphia and mid-sized brands like AKA (which has properties in a handful of U.S. cities and one location in London) are making their presence felt with innovative and successful new luxury extended-stay properties. The push for more amenities in the extended stay model is also helping to blur the lines somewhat between residential living and hotel concepts. Designer décor, expanded kitchen amenities, in-house gyms and workout facilities, and residential-style extras such as doormen and maintenance services. The result is something of a mash-up of luxury condominium-style living and a traditional service-oriented hospitality experience.
While the conceptual lines have been blurred somewhat, ultimately, hotels and high-rise residential represent two big pieces of a truly synergistic whole: an essential ingredient in a truly vibrant and commercially dynamic mixed-use urban environment. As hotels and multi-family developments continue to be featured more prominently in high-profile urban mixed-use environments, the impact on retail tenants is extremely positive. Larger numbers of consumers want to be in these vibrant urban communities — and as they spend more time and more money, the classic mixed-use formula of live, work and play may have to become live, work, play and stay.
Jerry Hoffman, president and CEO of Hoffman Strategy Group, brings 30 years of economic and market analysis that provides insights for all pieces of mixed-use projects. Core project specialties include urban retail corridors, infill, and suburban mixed-use as well as shopping center repurposing and redevelopment, entertainment district development, university-led development, and adaptive reuse of property. To learn more, visit Hoffmanstrategygroup.com or connect with Jerry at [email protected]
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Exclusive: Former Home Depot exec tees up at PGA Tour Superstore
Experiential retail is alive and well at PGA Tour Superstore.
The company, the PGA Tour’s exclusive off-course/off-airport retail partner, has built a business dedicated to providing golf enthusiasts of all levels access to the same technology and expertise that card-carrying Tour pros enjoy. Stores are staffed with teaching professionals and have multiple state-of-the-art swing simulators, practice hitting bays, and large putting greens. There is also an in-house club-making and repair facility.
PGA Tour Superstore is a one-stop golf store for players of all levels — and ages. Stores range from 25,000sq. ft. to 50,000 sq. ft. and carry a wide range of equipment and accessories, along with golf footwear and apparel for men, women and juniors.
Chain Store Age spoke with Dick Sullivan, CEO and president of the company for the past six years. Prior to that, he was executive VP of the Atlanta Falcons (2002 to 2009), and chief marketing officer of The Home Depot from (1992 to 2002). PGA Tour Superstore is owned by Golf & Tennis Pro Shop, whose controlling owner and chairman is Arthur M. Blank, retired co-founder of The Home Depot and owner of the Atlanta Falcons.
How has your professional background informed your experience at PGA Tour Superstore?
I feel fortunate to have a combination of experience with both retail and sports properties. There are some real synergies with the operational aspect of each of these businesses, most especially the psyche of the fan and the consumer. Whether you’re going to an event or visiting our store, we are always focused on keeping our customers (consumers) coming back.
Our consumer is more engaged today much like the avid fan. For today’s avid golfer, there is an emotional attribute whereby engaging them in our venue and providing them with the service and products they need to improve their game, we will provide a better overall (golf retail) experience.
How involved is Arthur Blank in the company?
Arthur continues to be involved heavily in PGA Tour Superstore’s business strategies. His wisdom and experience make him a great visionary and leader for our business.
We’re in the experience business with high service levels, wide assortments of products at value prices similar to Home Depot, yet for golfers. That was Arthur’s philosophy when he co-founded Home Depot, and we at PGA Tour Superstore are very much in tune with that today.
What shape was the company in when you came on board back in 2009?
We were still in start-up mode and needed resources across the board, from financial to talent, to set us on a growth trajectory. We had nine stores back then. We will open our 24th store this year.
How healthy is the golf industry these days?
Our industry is stable with 25 million golfers but we continue to see challenges in growing the game. There’s some great excitement with a new crop of PGA Tour players, and we’re also seeing an increase in TV ratings. There are also new youth initiatives to draw in the next generation of golfers, and that is something we have to continue to strive to do.
How is PGA Tour Superstore positioned in the market?
We focus on delivering a customer-centric experience in everything we do. For example, our stores have huge putting greens and up to 14 indoor simulators and hitting bays to help golfers practice and get custom fit year round. Golfers come hang out for hours in our stores and we invite that.
Also, our associates are the best in golf, period. Their experience and passion is second to none. Finally, our aggressive growth is at a faster rate than our competitors. We will double the number of stores we have today over the next four years.
In January, the company entered into a partnership with Golf Channel. What was the thinking behind it?
We were already buying media on the Golf Channel locally prior to entering into this relationship, but opted for a national deal to improve efficiencies and expand our reach beyond just our brick-and-mortar markets.
What is the company’s real estate strategy?
We don’t disclose this for competitive reasons. But let’s just say we believe there is still a lot of opportunity here in the United States for what PGA Tour Superstore has to offer, and opportunities internationally as well.
Tell us about the company’s digital strategy?
We are looking to provide an omnichannel platform that will deliver whatever our customer wants and needs whenever and wherever they are. Our partnership with the PGA Tour provides us with a worldwide e-commerce platform so when a shopper visits PGA Tour and hits the ‘shop’ button, we provide the store and backend retail.
We continually focus on “customer strategies” and new ways to provide the services and information our customers want – not just in a digital world or a brick-and-mortar world, but in a seamless shopping environment. Because our customers’ needs are always evolving and we continue to evolve with them. In-store order pickup, ease of mobile shopping, a unique loyalty program, personalization and more relevant, immediate content are all key issues that are important to our customers. We will continue to innovate here and there are certainly “digital” components to each of these issues.
What are the expansion plans?
We plan to double the number of stores we have today over the next four years and believe there is much more room beyond that as well. We have found our model and customer experience to be well received and that means we have many opportunities in both existing and new markets.
You just opened a location in Birmingham. What markets will you be targeting next?
We honestly are looking everywhere where there are passionate golfers and where we believe we can inspire those golfers to play better. We are looking coast to coast, but we keep this information close to the vest for competitive reasons.
Any thoughts about opening stores outside of the United States?
This is certainly a possibility, especially as The PGA Tour continues to expand its brand internationally. We have opportunities now, but we will decide when the timing is right.
Do you have a favorite golf course?
I’d say The Golf Club at Cuscowilla (Eatonton, Georgia), which was designed by Bill Coore and Ben Crenshaw. It’s ranked one of the top golf courses in Georgia. It truly is stunning both from a natural environment and in that it also provides you with great challenges. It’s serene and beautiful and really the perfect escape for a round of golf.
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Loreal veteran joins executive suite at Toys”R”Us
Toys“R”Us has looked to a Loreal veteran to take over its human resources division.
The retailer announced that it has named Tim Grace as executive vice president, global chief talent officer, effective immediately. In this role, the company says Grace will oversee all global human resources functions, including organizational design, talent acquisition, succession planning, learning, change management and labor and employee relations, as well as compensation and benefits. He will report to Dave Brandon, Chairman and CEO, Toys“R”Us, Inc.
“Tim is a passionate leader who cares deeply about developing high-performing teams,” said Brandon. “In championing our 66,000 employees around the world, we believe Tim will help make our company’s culture and talent a competitive advantage, and we are pleased to welcome him as a key member of our leadership team.”
Grace previously served as group vice president, human resources, L’Oreal Group, where he led all human resources functions across North and South America. Prior to that, he spent 12 years at Schindler Elevator Corporation as senior vice president, human resources and administration. In this role, Grace was responsible for human resources in the Americas, and led many initiatives designed to ensure innovative and progressive human resources practices throughout the entire global organization.
Earlier in his career, Grace held various senior human resources roles at Wise Foods, Diageo (formerly Grand Metropolitan) and in the Frito Lay division of PepsiCo. He received a bachelor’s degree in industrial psychology from the State University of New York at Fredonia and Master of Science in Industrial and Labor Relations from West Virginia University.
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