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12/01/2021

Cullinan's A.T. Toroyan on partnership

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When Diane Cullinan Oberhelman founded Cullinan Properties in the 1980s, she was unique.

Yes, she was one of a very few female founders of a commercial real estate company, but that was not what was compelling about her concept. Her primary experience was in residential real estate, but her vision was to enhance communities, not just build developments. Her formula was to blend office buildings, apartments, and retail together in well-located but under-developed areas and she along with a team at Cullinan Properties expanded the communal living, working, and playing space in well-established towns in Central Illinois.

Cullinan Properties projects like The Levee District in East Peoria and Streets of St. Charles outside of St. Louis helped forge the mold used by the developers of so many of the mixed-use town centers of today, what is commonly touted today as “Live-Work-Play.”

The element that’s often missing in so many new mixed-use developments created today is true partnerships between the developers, municipal officials, and investors whose reputations, dreams, and livelihoods are weighed in the balance of the finished product. We at Cullinan believe that, from a project’s inception, these three parties all need to have aligned interests, so we sit together ideologically at what I call a “round table” and collaborate on all major decisions.

Too many developers try to dictate their own needs and wants to a city or county. What we at Cullinan do first is actively listen to municipalities and find out what the real needs of their communities are. Of course, what we really want and what they really want is often governed by the ever-present third party at the tablethe investors or lenders. When the project’s finished and all is said and done, our first indication that we’ve succeeded is seeing the town officials the investors and most of all, the community at large beaming.

“The pandemic has taught all of us—towns, developers, investors, and tenants—that we need to become lean, efficient, and collaborative.”

Diane Cullinan instilled in her company a level of pride in completion and commitment that requires listening to all the important groups that have a stake in a project. It takes time. It takes abandoning some traditional ideas and understanding future trends. It gets you to a point at which all parties say, “Great. We have a 2 million square-foot project with retail, restaurants, multi-family residential, office, and medical …wouldn’t this be a cool place to live?”

The challenge that the pandemic has presented to both real estate developers and retailers is to form these same kinds of lasting partnerships. To sit down at a table with the third-party consumer being top of mind and to continue to discuss and negotiate how to envision and construct a project that will keep that consumer coming back for years and years. Our projects are intended to be a long-lasting part of the fabric of a community and ones that all can be proud of.

The pandemic has taught all of ustowns, developers, investors, and tenants—that we need to become lean, efficient, and collaborative. The time has come for us to engage in hyper-personalization. Not to look at a new tenant at a signing and say, “Hey, that’s a good deal for us today as it meets our parameters,” but to look at a tenant throughout their stay on our property and ask, “How is this tenant doing? How are they handling omnichannel issues?” Our job is not simply to collect rent, but to help tenants prosper as valuable pieces of a larger puzzle.

When retailers expand into new markets, they often tell their prospective landlords that they want to enter the property on terms that they’re confident will bring them success. Since the pandemic has been in place, retailers’ reliance on and adherence to proven models of their tenancy in centers has become much more important to them in deciding which deals to sign. They are taking longer looks at site plans, co-tenancy, development details, and demographics than ever before. So when retailers and their broker consultants ask for more detailed information or special considerations, we’re doing our best to say yes a lot more than no.

In the old days, the pendulum of leverage swung between the landlord and the retailer and, more often than not, landed on the side of the landlord. Today, however, with a finite number of great opportunities and a fewer number of expanding concepts, our belief is that the pendulum needs to land in the middle.

About the Author

A.T. Toroyan
A.T. Toroyan, the vice president and director of real estate at Cullinan Properties, has spent 25 years in retail real estate working in various capacities for both landlords and tenants. Read More