Location: Lower Manhattan, New York, N.Y.
Size: The transformed Seaport District will encompass seven buildings on several blocks totaling more than 400,000 sq. ft.
Developer: The Howard Hughes Corporation
Key tenants: iPic Theaters, 10 Corso Como, Scotch & Soda
Status: Pier 17, the property at the center of the Seaport’s development plan, is set to open next year.
The Seaport District, New York City’s oldest new neighborhood, sits on the East River in lower Manhattan and boasts unparalleled views of the Brooklyn Bridge and Statue of Liberty. The neighborhood’s rich history, dating back to before the American Revolution, makes it one of New York’s unique settings.
As lower Manhattan’s population continues to skyrocket, the Seaport District is evolving into a much-needed community anchor, bringing premiere dining, shopping, entertainment and cultural offerings to the neighborhood. The revitalized area is also reconnecting New Yorkers to the East River shoreline, which for decades failed to capture the imagination of locals and visitors.
Moreover, The Howard Hughes Corporation’s stewardship of the District ensures that historic preservation is fused with cutting-edge design. When completed, the Seaport District will set a new standard for a 21st century, mixed-use community — one that preserves the past while keeping an eye toward the future.
Third Avenue & 60th Street
Location: Third Avenue at 60th Street, New York, N.Y.
Size: 45,800 sq. ft. total gross leasable area
Owner: Olshan Properties
Key tenants: Dylan’s Candy Bar, Starbucks, Sunglass Hut, Flywheel, Learning Express
Status: Open and operating
Third Avenue at 60th Street in midtown Manhattan truly represents an iconic CBD retail location. The building boasts a strong and distinctive tenant mix combined with an unparalleled location adjacent to two midtown transportation hubs that provide access to and from all areas of the city. These include the 59th Street subway station (NYC’s fifth busiest subway station) and the M15 express bus stop. In addition, the property is located directly across the street from Bloomingdale’s flagship store along one of the city’s most dynamic retail corridors that regularly brings a heavy volume of NYC residents, office workers and tourists right to its doorstep.
Willow Grove Park
Location: Willow Grove, Pa.
Size: 1,179,000 sq. ft.
Key tenants: Primark, Bloomingdale’s, Nordstrom Rack, Apple, The Cheesecake Factory, Michael Kors, Sephora, H&M, Coach, Williams-Sonoma, Pandora, J. Crew
Status: Open and operating
Willow Grove Park is a super-regional shopping center and family destination located just north of Philadelphia. With more than 130 sought-after retailers, the upscale merchandise mix caters to the sophisticated shopper in the region. Consumers can also experience the nostalgia of the property through its vintage grand carousel. Willow Grove Park is home to one of two Bloomingdale’s and Primark stores in the Philadelphia metro market. This Primark location — which opened this past summer — marks the in-demand European retailer’s fifth location in the northeastern U.S. With its diverse retailer mix, mall sales continue to climb, recently eclipsing $600 per sq. ft. Focused on elevating the consumer shopping experience, PREIT recently launched a digital rewards program at Willow Grove Park, which is being rolled out across the company’s portfolio of properties.
Location: Route 310 and Fairview Street, Delran, N.J.
Size: 215,000 sq. ft.
Leasing/management: Levin Management Corporation
Key tenants: ShopRite, Lowe’s, Planet Fitness, Staples, Starbucks, Smashburger, Hand and Stone Massage & Facial Spa, Sleepy’s, Five Below, and other national and regional concepts. Coming soon: Virtua Urgent Care, Edible Arrangements.
Status: Open and operating
Centrally situated within a popular retail hub, Hartford Corners is anchored by a dominant grocer and features a well-rounded mix of national and regional retail and service tenants. The shopping center is located at a multi-lane, traffic-light-controlled intersection with a daily traffic count of 52,000 vehicles. The property serves a growing population of approximately 62,000 people with an average household income of $96,000 within a three-mile radius.
Hartford Corners is part of the Delran/Cinnaminson Route 130 Corridor, a Philadelphia MSA regional shopping area boasting more than 1.3 million sq. ft. of retail space within five miles. Community centers and power centers define the market, drawing consumers from a large trade area.
A robust mass of tenants has been attracted to the center by the market’s strong fundamentals, and Hartford Corners benefits from the traffic flow generated by its own occupants as well as major retailers at neighboring centers.
Location: 20626 East Hampton Plaza, Ashburn, Va.
Size: The 342,000-sq.-ft. Phase 1 comprised 236,800 sq. ft. of retail; and the 105,200-sq.-ft. Phase 2 under development is expected to contain 78,300 sq. ft. of retail and 46,300 sq. ft. of office. The Phase 3 plan is for 152,000 sq. ft. of commercial space and an additional 250 to 400 residential units.
Developers: The property is currently being developed by Miller & Smith and North America Sekisui House, which will continue to be the master developer through Phase 2. Phase 3 will be developed, owned and managed by RPAI.
Key tenants: Phase 1 is anchored by Alamo Drafthouse Cinema, The Fresh Market and Great Gatherings. It contains a strong mix of fast-casual and sit-down restaurants, including Matchbox and Uncle Julio’s Rio Grande Cafe. Phase 2 will include an Eddie Merlot’s Steakhouse and one of only four new Barnes & Noble concept stores, which will have a bar and restaurant within the store location.
Status: Phase 1 is currently open, and Phase 2 is anticipated to open in the third quarter of 2017.
The property represents the retail centerpiece of One Loudoun, a 360-acre, mixed-use, master-planned community that is entitled to residential, hospitality, retail and office uses. Loudoun County was named one of the wealthiest by Forbes magazine in 2014, and Ashburn, Va., was named No. 22 in the top “50 Best Places to Live” in the U.S., and No. 1 for job growth in 2016 by Money magazine.
Location: Easton, Mass.
Size: 112,869 sq. ft.
Owner: Phillips Edison & Company purchased the property from Samuels & Associates in 2015. The property was built in 2005.
Key tenants: Anchored by Big Y and shadow-anchored by Target. Additional tenants include TJ Maxx, Petsense, Supercuts and Liberty Mutual.
Status: Open and operating. A 228-unit luxury apartment complex is being developed by AvalonBay Communities behind the center.
When Phillips Edison acquired Highlands Plaza in 2015, it was anchored by Hannaford, which has since been converted to Big Y. The 112,869-sq.-ft. center is located in Easton, a suburb 29 miles south of downtown Boston, with a population exceeding 22,300 in a three-mile radius with an average household income greater than $127,500.
Density and diversity. The two D’s. That, in short, is what sums up the Northeast market for retailers. It’s the place where chains with national expansion plans or new formats to test need to be.
“In the Northeast you have some of the highest incomes and highest education levels, but you also have a diverse melting pot population,” said Greg Goldberg, RPAI’s VP, leasing director, eastern division. “You have dense clusters of suburban offices and residential areas that provide an abundance of buying power and different types of customers.”
Of course, Goldberg said, doing business in the Northeast is more expensive in just about every aspect of retailing than anywhere else in the country, but the two D’s make it worthwhile.
“What’s nice about the Northeast area is that once you gain entry and have your distribution and infrastructure set up, you have lots of stores and doors in a relatively small area,” he said.
Another enduring dynamic of America’s tightly packed upper-right-hand corner is that high-barrier-to-entry markets make new development challenging. Once a chain establishes profitable beachheads in specific markets there, then it often pays to stay put.
“The Northeast is filled with communities that retailers crave, often dense markets with well-educated consumers and stable employment,” PREIT CEO Joe Coradino said. “Well-positioned properties there can continue to be reinvented as the dynamics of consumer preferences continue to cause shifts in the retail environment and tenant lineups.”
Joe Schlosser, senior vice president, portfolio manager, for Phillips Edison & Company, a strong owner and operator of grocery-anchored shopping centers, agrees that his company’s goal in the Northeast is not to develop, but to aggressively acquire in order to create profitable environments for its centers’ tenants.
“Well-capitalized real estate companies with strong operating platforms have an advantage as we’re often able to acquire shopping centers at a discount to replacement cost and leverage our platform to create incremental value on existing assets,” he explained.
Levin Management president Matt Harding said grocery-anchored centers remain a fertile environment due to a healthy infusion of anchors: “Following the recent A&P bankruptcy and liquidation, a growing diversification in grocery tenants has taken place in the Northeast. After several years with only a handful of expanding operators, we are seeing significant growth among chains like ShopRite, Acme, Trader Joe’s and other specialty and ethnic grocers.”
Established centers in the region have slowly but steadily evolved into lifestyle centers, augmented by entertainment, fitness and dining options that have become part of the typical merchandising plans of the large mixed-use developments rising up in more expansive areas of the country. Mixed-use projects do get built in the Northeast, but vertically.
“In Towson, Md., we’re taking an old shopping center and building retail around a 14-story residential tower,” Goldberg said.
“Entertainment offerings are moving beyond movie theaters to also include bowling alleys and miniature golf,” Coradino said. “At Plymouth Meeting Mall north of Philadelphia, we are opening a Legoland Discovery Center which will appeal to families with younger children, and at the same mall we find Dave & Buster’s, a full-service restaurant and modern gaming arcade, to be popular among young adults and families with teenagers.”
Schlosser added: “The rationale is to generate additional foot traffic by creating a social destination. And, we’ve done some of this across our portfolio.”
Fitness centers, especially, have become a highly active category over the last 24 months, according to Harding.
“We have secured seven fitness chain leases totaling 113,000 sq. ft. in our Northeast portfolio over that two-year time frame,” Harding said. “In a sense, the rise of gym tenants at retail properties was a precursor to a larger trend. Today, many shopping centers are transitioning from places where consumers go simply to buy goods and services. Now they visit to enjoy recreational opportunities and engage in community.”
And that trend, in turn, has spawned a co-tenancy trend of retailers whose offerings mesh with healthy lifestyles, if not merely with the demographic groups that are seeking them out.
“Things are now going almost in reverse,” Goldberg said. “In the past, it was soft goods driving everything else. But now we find gyms and specialty fitness centers like yoga and Pilates studios leading the lifestyle themes of centers, followed by the soft goods retailers that want to be near them.”
Because fitness centers tend to draw a younger crowd, especially during evening hours, on-trend dining and entertainment concepts are among the categories seeking adjacency to them.
“Both millennials and baby boomer empty nesters are interested in more culturally relevant experiences,” said Ken Marshall, head of retail at Olshan Properties. “We are seeing a diverse group of tenants that combine both dining and entertainment becoming a greater driver of traffic at many of our venues.”
“Theater chains like Alamo Drafthouse and iPic are leading this movement, but Dave & Busters and Top Golf have business models that take advantage of this trend too. Most, if not all, of these tenants are working on their Northeast expansion strategies,” he said.
As with new, redeveloped centers across the land, the socialization movement is a reaction to heavy competition from internet retailers.
“Retailers in the Northeast are competing in an environment marked by slowing demand at bricks-and-mortar stores as increased competition from online shopping continues to advance,” Marshall said. “For our portfolio of nearly 3.4 million sq. ft. in the region, we continually evaluate tenant mix and redevelopment opportunities to provide a retail environment that remains relevant to retailers, restaurants and the consumer in these evolutionary times.”
In Levin Management’s mid-year tenant poll, nearly 40% of participants indicated they have adapted their business models in response to e-commerce growth. Many say they are adding in-store services and incentives, incorporating in-store pickup and return options for purchases made online and increasing coordination with their online operations. Others are altering store inventory, introducing experiential aspects, or changing their store prototypes.
And in a region containing four of the top 10 U.S. markets and known for retail innovation, first-to-market tenants are being courted by developers. In lower Manhattan, at Howard Hughes Corporation’s redevelopment of the Seaport District, that means recruiting retailers from abroad.
“We’re working to create a Seaport District with a diverse set of offerings for all demographics,” Howard Hughes executive VP Saul Scherl said. “We are welcoming retailers that are entering the U.S. market for the first time and continue to seek out new brands with a unique retail perspective. This includes 10 Corso Como, a Milan-based lifestyle brand with outposts in Shanghai, Seoul and Beijing, which will open a 13,000-sq.-ft. store in this historic neighborhood.”
Apparently, it’s not difficult to find global retailers looking to expand in the U.S. market and plant their flags in the most densely populated, compactly sized region.
“Demand for prime space in the Northeast has been bolstered by international retailers trying to test the waters, as well as established domestic retailers who continually work to reposition their footprints to best respond to shifts in population and other demographic trends,” Marshall said.
It goes to show that retailers the world over are attracted to the northeastern United States — not only to attain the two D’s of density and diversity, but also to realize the two V’s of volume and validation.
TRENDING STORES: Two Canadian brands are dropping anchor in the United States. Health and beauty retailer Saje Natural Wellness, which operates 45 locations up north, will open two stores in the Los Angeles area by year end. Another 25 stores are on tap for 2017. Featuring natural wellness, personal and home care products and accessories, Saje stores are open, light and airy, with a high level of design. The Saje store at Toronto’s Sherway Gardens features a 30-foot Italian tile façade. … Vancouver-based jeweler Spence Diamonds also has designs on the United States, and opened its first two U.S. stores in November — in Austin, Texas, and San Jose, Calif. Next up is an outpost in Scottsdale, Ariz. Spence specializes in “artisan created” diamonds that are made in a plasma chamber. Customers can watch as the diamonds are created right in front of their eyes. Also, jewelry is displayed in open cases and customers are free to take items out of the cases for try-on. JGA, Southfield, Mich., designed the brand’s first U.S. location. … The North Face’s new two-level, 20,000-sq.-ft. flagship on Manhattan’s Fifth Avenue includes an interactive climbing wall and custom-embroidery service that allows shoppers to personalize product. Many of the store’s outfittings were created using the same materials as North Face products. The fitting rooms are made of the same fabric, nylon and aluminum poles used to make North Face tents. … AT&T opened its largest and most tech-centric store to date, below, a two-level, 24,000-sq.-ft. flagship in a historic building in San Francisco. The first floor showcases AT&T’s range of products and services. The entire second floor fashioned by Twenty Four 7, Portland, Ore., is designed as an interactive, tech playground that highlights connectivity through the Internet of Things (IoT), with six interactive “experience zones,” including ones dedicated to entertainment, the smart home and connected car. The floor is awash in state-of-the-art digital content, including intuitive UI and short 30- to 60-second animated vignettes.