REAL ESTATE

Quality Trumps Quantity

BY Katherine Boccaccio

As physical shopping centers battle furiously for customer share, more developers are realizing that bells and whistles aren’t just optional; they’re essential. No matter the size or scope, new shopping centers have to offer something extra to an increasingly discerning consumer — and the group of owners highlighted here is doing just that.

Chain Store Age’s annual development survey — spanning 28 years — showcases notable projects by developers who continue to push the envelope, adding in those now-requisite amenities to even the smallest of footprints.

Consistent with years past, we have not attempted to rank a “Fastest-Growing Developers” listing but, rather, have arranged the companies alphabetically and provided highlights for one 2016 project from each developer. All new developments and expansion projects were completed between Jan. 1 and Dec. 31 of last year.

CBL & Associates Properties

Chattanooga, Tenn.
2016 score: 8 projects in 6 states,
557,000 sq. ft.

Louisiana has much to celebrate from a CBL-Stirling partnership that delivered Fremaux Town Center in Slidell in 2015 and Ambassador Town Center in Lafayette in 2016.

Ambassador Town Center is a 60-acre retail project anchored by Costco Wholesale, Dick’s Sporting Goods and Field & Stream. The 425,000-sq.-ft. complex opened on March 16, 2016, and is 100% leased with an impressive list of tenants that were either new to the market or, in some cases, new to the state. Other notable tenants at this vibrant open-air center include Nordstrom Rack, HomeGoods, Marshalls, Off Broadway Shoes, Red Robin, BJ’s Restaurant & Brewhouse, Chuy’s and Panera Bread.

Halpern Enterprises

Atlanta
2016 score: 5 projects in 1 state,
230,000 sq. ft.

New to the CSA Top Developers list is Halpern Enterprises, which completed five projects last year — all in its home state of Georgia. The family-owned and -operated business, based in a suburb of Atlanta, points to its development of Dawson Crossroads in Dawsonville, Ga., as its most significant of the year. Opened in October 2016 and located across from the North Georgia Premium Outlets, the Publix-anchored center features nearly 100,000 sq. ft. of retail and restaurant space. PetSmart, Freddy’s Frozen Custard & Steakburgers and several new retailers make their debut at the center this year.

NewQuest Properties

Houston
2016 score: 4 projects in 2 states,
1,056,881 sq. ft.

Another newcomer to the CSA Top Developers list is Houston-based NewQuest Properties, which delivered Camp Forbing Town Center to Shreveport, La. The developer, which had previously concentrated its efforts in neighboring Texas, made its Louisiana debut with this center, which features a Kroger Marketplace and Silver Star Grill.

The Camp Forbing Town Center is also notable in that it was the first commercial Planned Unit Development in the city of Shreveport, and its design was the result of the direct collaboration with Shreveport officials and community leaders.

Regency Centers

Jacksonville, Fla.
2016 score: 4 projects in 3 states,
366,118 sq. ft.

A regular on the Top Developers list is Regency, a prolific builder of grocery-anchored centers. For 2016, the company highlights its development of Village at La Floresta in Brea, Calif., which blends grocery, entertainment and other lifestyle offerings designed to appear to the local population. Retailers are chosen based on the needs of the surrounding community and include Whole Foods Market, Mendocino Farms Sandwich Market, Jimmy’s Famous American Tavern, Kriser’s, Plum Pretty Sugar, Floyd’s 99 Barbershop, Blue Eyed Girl, Orangetheory Fitness, Slapfish, Urban Plates, and CorePower Yoga.

The center is LEED Silver Certified and offers a mix of lifestyle shopping needs in a walkable setting, reducing emissions and vehicle miles for nearby residents. High-performance building design significantly reduces energy consumption, water consumption and greenhouse gas emissions. A tiered amphitheater makes a stunning gathering area for the community to listen to live music and enjoy an afternoon or evening outside.

Rouse Properties

New York, N.Y.
2016 score: 6 projects in 5 states,
507,000 sq. ft.

Another perennial listmaker, Rouse Properties, showcases its transformation of Bel Air Mall, a 1.3 million-sq.-ft. super regional mall serving an expansive trade area of more than 570,000 people across southern Alabama, Mississippi and the Florida Panhandle.

Completed by Rouse in concert with the city of Mobile, Ala., Bel Air Mall today provides an expanded retail experience that effectively blends shopping, dining and entertainment. To achieve that, Rouse transformed enclosed mall space into an engaging streetscape and rebranded the property The Shoppes at Bel Air. The transformation, which was completed in the fall of 2016, has had a tremendously positive impact on leasing efforts at the shopping center. Among the many new and exciting tenants the mall has added to its merchandising mix since the redevelopment was announced is Belk, which chose The Shoppes at Bel Air to house its flagship location in Mobile, along with H&M, P.F. Chang’s, Grimaldi’s, Cinnabon, Torrid and Rue21. Baumhower’s and DXL are slated to open in 2017.

Simon Property Group

Indianapolis
2016 score: 10 projects in 8 states,
1,918,000 sq. ft.

Of all of its development projects in 2016 — and this mall powerhouse completed almost 2 million sq. ft. of new space — Simon points to the expansion of a Philadelphia landmark, and the largest mall on the Eastern seaboard, as its most significant.

Simon linked the Plaza and Court areas at King of Prussia Mall, and added a new four-level parking garage so customers can valet their cars and walk seamlessly into the new area. The two-year expansion project, which opened to great fanfare in August 2016, added 155,000 sq. ft. comprised of 50 stores and 13 eateries. Today, King of Prussia Mall is home to more than 400 stores and dozens of dining options, making it a highly desirable shopping and entertainment destination.

Stirling Properties

Covington, La.
2016 score: 5 projects in 1 state,
532,334 sq. ft.

Stirling Properties rightfully takes its credit — along with CBL & Associates Properties — for the delivery of Ambassador Town Center in 2016. And the fact that the new center is a meaningful addition to Stirling’s south Louisiana home base makes the development that much sweeter.

Ambassador Town Center was 100% leased within six months of its grand opening in Lafayette, La., a significant accomplishment that represented the strength of the Lafayette market despite challenging economic times. Stirling and CBL formed a JV to develop the center and, with less than two years of planning, construction began in January 2015. Though not initially contracted to develop the center, Stirling and CBL were able to adapt and deliver the project in an exceptionally timely manner when previous developers could not. The companies currently manage and lease the property. Ambassador Town Center has been credited with creating approximately 2,200 construction jobs, 1,700 permanent jobs and nearly $9 million annually in sales tax revenue for the city of Lafayette.

Taubman

Bloomfield Hills, Mich.
2016 score: 3 projects in 1 state, 2
projects outside U.S., 3,020,000 sq. ft.

Located in the heart of Waikiki, Hawaii, on the island of Oahu, the reimagined International Market Place is a world-class shopping, dining and entertainment destination for tourists and residents alike. Opened August 25, 2016, the 345,000-sq.-ft., three-level center features a curated mix of upscale and lifestyle brands, anchored by the first Saks Fifth Avenue in Hawaii. The top level Grand Lanai offers a menu of 10 diverse dining options from Flour & Barley Brick Oven Pizza to Michael Mina’s Stripsteak. IMP offers up to 75 of today’s most in-demand retail brands at every price point including Christian Louboutin, Free People, Fabletics, L’Occitane, Oliver Peoples, Stuart Weitzman and Swarovski.

In typical Taubman style, the design of the center embraces the rich heritage of the site and its cultural history, translating those qualities in a fresh contemporary approach that is seamlessly woven with its iconic past.

Trademark Property Company

Fort Worth, Texas
2016 score: 4 projects in 2 states,
290,113 sq. ft.

Last year, Trademark completed one new development in Fort Worth and three expansion/redevelopment projects in Germantown, Tenn., Dallas and Fort Worth, all totaling more than 290,000 sq. ft.

It highlights its opening of Waterside — a 63-acre mixed-use development in Fort Worth — as its most significant. Phase I includes local and national retailers and restaurants, anchors Whole Foods Market and REI, 383 multi-family units and free community amenities.

Waterside is the first ground-up project developed under Trademark’s Conscious Place experiential development model. Conscious Place elements include “The Grove,” a vibrant public space, shaded seating, free Wi-Fi, outdoor games, sustainability initiatives, a community promotion shed, Waterside’s signature micro-restaurants, a regional public art program that celebrates the site’s history, preservation of heritage trees and Trinity River/Trinity Trails integration.

At full build-out, Waterside will be a walkable district including 200,000 sq. ft. of retail space and riverside restaurants, 800 multi-family residential units, one or two hotels, office buildings and potential for additional high-density, single-family housing, much of which will be situated along the Trinity River.

Westfield

Century City, Calif.
2016 score: 1 project in 1 state,
290,000 sq. ft.

Another name not foreign to our Top Developer list, Westfield opened less new square footage in 2016 than it has in several years — but what it opened is masterful.

Westfield World Trade Center, in Manhattan, opened 290,000 sq. ft. last year, featuring key tenants Eataly, Épicerie Boulud, Apple, Hugo Boss, H&M, Kate Spade, John Varvatos, Lacoste, Banana Republic, Under Armour, Cole Haan, Stuart Weitzman, Aldo and Vince Camuto.

Westfield World Trade Center has become the new port of entry to Lower Manhattan — located at a transportation hub where 13 subway and PATH trains, multiple ferry lines, thousands of local residents and millions of global travelers converge within one unforgettable setting. Designed by acclaimed architect Santiago Calatrava, the property’s light-filled “Oculus” is an artistic achievement all its own and an iconic landmark now instantly identifiable in New York City. The destination’s variety of more than 100 fashion, beauty, lifestyle and technology brands showcases the very best New York has to offer — all in one place.

Westfield World Trade Center is projected to register up to $1 billion in annual sales and welcome more than 100 million customer visits each year.

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Breakout Retailer Awards

BY CSA STAFF

Five dynamic retail and restaurant brands — Altar’d State, Bentley’s Pet Stuff, MOD Pizza, Sugarfina and Warby Parker — took home the honors as the winners of Chain Store Age’s annual Breakout Retailer Awards.

The awards, selected by CSA’s editorial board and sponsored by Paint Folks, recognize innovative retail and restaurant concepts that are on their way up —brands that have crossed the “newbie” line, and are well positioned for growth, in store, online, or both.

The winners received their awards during a special presentation at CSA’s annual SPECS conference. Executives from the winning brands were on hand not only to accept the awards, but also to share insights into their companies and future strategies at a Q&A session during the conference. Representing their companies on the panel were:

  • Dave Bolen, CEO, Bentley’s Pet Stuff;
  • John Dikos, VP of partnerships, MOD Pizza;
  • Kelly Radford, VP, head of development, Warby Parker;
  • Ryan Nelson, VP, retail, Sugarfina; and
  • Aaron Walters, chairman and CEO, Altar’d State.

Here is an overview of the award-winning concepts:

Altar’d State

Based in Knoxville, Tenn., Altar’d State combines a bohemian fashion sensibility, affordable prices and a distinctive store experience with a deeply ingrained mission: to change the world for the better.

“The give-back mission isn’t just what we do — it’s who are,” Walters said “From the very beginning our mission has been to help the less fortunate in and around the communities where we have Altar’d State boutiques.”

Founded in 2009, the young women’s apparel retailer has expanded its footprint to 73 stores, with 15 to 20 new ones on tap for this year. The merchandise mix includes clothing and accessories, with select home décor and gift items integrated throughout the store. The feminine-styled interiors are rich with detail and include chandeliers and vintage accents.

Altar’d State has a number of giving-back initiatives, including a commitment to consistently give at least 1% of sales to local and global philanthropic efforts on an annual basis. The company actively supports programs in local communities, and also supports employee volunteerism.

Bentley’s Pet Stuff

Dedicated to healthy nutrition for dogs and cats, Bentley’s Pet Stuff is positioned as a neighborhood pet store in the fastest-growing segment of the billion-dollar pet food industry: natural foods. Its emphasis on healthy nutrition, smaller-sized, neighborhood store format, and focus on customer service has won it a growing following.

Bentley’s, which was founded in 2008, currently operates 65 stores, with plans to reach a total of 90 to 100 locations by year-end. Stores average 2,200 sq. ft., with a bright, inviting interior and a signature green paw print on the exterior canopy. The merchandise mix includes a curated assortment of natural pet food brands, along with treats, toys and accessories.

Customer service is a top priority at Bentley’s, which has a strong local bent.

“We educate our team members so they are a resource to our customers,” said Lisa Senafe, founder of Bentley’s Pet Stuff. “Our community involvement is extremely important to us. We are the neighborhood pet store in each town we are in.”

MOD Pizza

From the husband-and-wife team that founded Seattle Coffee Company, MOD Pizza is one of the pioneers of the fast-casual, artisan-style pizza trend and one of the fastest-growing restaurant chains in the nation.

In just nine years, MOD (short for made on demand) has grown to more than 200 locations in 20 states, with plans to open some 100 new units in 2017. The restaurants, which are typically located in retail centers and have a cool casual vibe, serve up fresh-made pizza (and salads) in minutes, with a choice of toppings, for one set price.

But the secret to MOD’s success is more than a quality product. The company’s dedication to a people-first culture, in which everyone thrives, has won it considerable goodwill and loyalty in the communities it serves.

MOD has a number of ongoing philanthropic initiatives, but nothing exemplifies its culture better than the way it treats employees, or its “Mod Squad.” From above-average pay and benefits to hiring people with special needs or those in need of a second chance, MOD has stayed true to its goal of putting people first even as its growth has skyrocketed.

“We have a great value proposition, and our stores are designed with the community in mind, with a focus on creating a fun, friendly atmosphere,” said Charlotte Wayte, marketing manager at MOD Pizza. “But what people will also find is a really authentic customer experience, delivered by our MOD Squad, who are at the core of our business.

Sugarfina

Featuring sweets made by artisan candy makers from around the globe, Sugarfina is a gourmet candy boutique for adults. Launched online in 2012, the brand flourished, fueled by savvy marketing and social media buzz.

Sugarfina made the jump offline with style, opening its first retail location in 2013 with a 1,200-sq.-ft. boutique in Beverly Hills, Calif. The Los Angeles-based company currently operates 23 freestanding stores, along with in-store shops at Nordstrom, and Harrods and Harvey Nichols in the United Kingdom. It expects to open another 12 locations this year.

Sugarfina carries approximately 120 unique candies from around the world, more than three-quarters of which can’t be found anywhere else in the United States. As much as the product, it’s the overall aesthetic that defines the brand — everything about it is luxe. The stores have an upscale, sophisticated feel and a chic, feminine look.

A-level malls, upscale lifestyle centers and high streets make up Sugarfina’s real estate strategy. Stores vary in size, depending on location. The smallest is a jewel box of a shop, a 225-sq.-ft. unit in Manhattan’s Time Warner Center.

Warby Parker

In coming up with a radical new model for selling and buying eyewear online, Warby Parker helped pioneer a new category: retail disruption. The hip eyeglass retailer upended a market long dominated by high-profile — and high-priced — brands by selling its own stylish frames at very affordable prices and offering consumers home try-ons and free returns. The company controls the design and manufacturing of all its eyewear.

Warby Parker has proved itself as adept — and disruptive — in the physical space as it is in the virtual one. Its stores meld the best of online and offline retail, and boost a high-service, low-price model. Shoppers can opt to receive their glasses by mail or pick them up on site. Nonprescription frames can be purchased on the spot. An in-house optometrist is on hand for exams.

No two Warby Parker stores are exactly alike. Instead, the company combines its signature library-inspired design details with elements unique to each locale.

The company has 47 stores, and plans to open a minimum of 25 more this year.

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A Tale of Two City Developers

BY Al Urbanski

If you live in a big city, you gauge your age by the changing real estate. As a kid and then as a teenager, I saw Shea Stadium and Giant Stadium being built. Both are now memories. Driving a New York City cab in the early ’80s, I rarely got a fare to Williamsburg and, when I did, I quickly turned around and headed back to Manhattan over the Williamsburg Bridge. That landed you on Delancey Street on the Lower East Side where turn-of-the-century (20th, that is) tenements still lined the street and where uptown gentry might only venture for cheap fashion or a corned beef sandwich at Katz’s Deli.

Over the past 20 years, those neighborhoods have served as landing pads for ambitious and creative young people forging their own big-city dreams. They’ve also served as blueprints for the reclamation of rundown neighborhoods in nearly every A and B metro in the United States.

Joseph Ferrara cut his teeth in New York real estate in the terraforming of Williamsburg and the Lower East Side. “We jumped into the East Village before anyone,” said Ferrara. “We did it in Williamsburg, offering the first ferry access. In Downtown Brooklyn, we broke ground on the first for-sale condominiums.”

The second-generation builder and principal of BFC Partners has turned his attention to his own home turf of Staten Island, the New York City borough voted least likely to ever be cool. Ferrara emphatically disagrees. He predicts that the Empire Outlets that BFC is building at the Staten Island Ferry terminus of St. George (rebranded as “The North Shore”) will become one of New York’s top tourist attractions, as well as a draw for outlet-deprived locals. It most certainly will be aided by a compelling billboard — the 630-foot-tall New York Wheel.

“The Wheel will be the world’s largest LED canvas, and every night it will put on an orchestrated light show,” Ferrara said. “The Staten Island Ferry, meanwhile, is already the No. 3 or 4 tourist attraction in New York. Every year, 23 million people ride it, and anyone accessing the terminal has to walk through my project.”

As Ferrara and BFC explore new ground in New York, Scott Smith and WRS Inc. will be reclaiming and repurposing one of the South’s legendary retail and entertainment centers, Underground Atlanta.

The subterranean site came into being in the early years of the 20th century when Atlanta built a bridge and elevated street level for freight train access to the Georgia Railroad Depot. Building owners moved their entrances to their second floors and the “Underground” thrived for years as a nighttime scene of bars and music halls. It faded when Atlanta relaxed its public drinking laws and then was transformed by Rouse into, essentially, an underground mall in 1987.

That lasted but 10 years, however; and in 2014, the city of Atlanta put the largely abandoned site up for sale. Smith and WRS came calling and this past March bought the property for $34.6 million with a plan to turn it into a mixed-use facility, including a dormitory building for nearby Georgia State University.

“We saw the possibility of building a community right in the heart of downtown Atlanta,” he said. “Mayor Kasim Reed and his staff shared the same vision to put this property back in play. This was the original shopping area of Atlanta, and we were confident it was something we could regenerate. With Georgia State, we have a built-in local audience of 40,000 people.”

Rouse’s redevelopment had thrived for its proximity to the World of Coca-Cola, one of the city’s leading tourist attractions, and the promise of the approaching 1996 Atlanta Olympics. However, once the Olympic Flame was extinguished, so too was the long-term viability of Underground Atlanta.

“It turned out to be just another mall, and you could find a mall anywhere,” Smith observed. “People had no reason to be there after 6 p.m.”

And so, like so many developers of retail projects, WRS will attempt to attract its own core of shoppers with residential towers and necessity-based retail at street level that will lead to more stores below ground. Smith’s and the city’s ultimate hope is to create a thriving new neighborhood packed with modern city-dwellers.

“Our timing is good, because there’s a tremendous movement to come back downtown,” Smith said.

Underground Atlanta and WRS are also helped by another growing movement that other developers will surely continue to benefit from — cities willing to make attractive deals on potentially prime real estate. “This will be the first time this property is on the Atlanta tax rolls,” he said.

What does this tale of two city developers say about the future of downtown retail? Perhaps Charles Dickens will forgive us for transposing his most famous opening line and posit that, perhaps, it is the worst of times and it is the best of times.

Al Urbanski
[email protected],
@AlUrbanski (Twitter)

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