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Urban influx, urban infill, and urban migration

BY Jerry Hoffman

Across the United States, cities have been experiencing a development resurgence. Legions of Americans are departing suburbia and returning to urban environments, with millennials leading the migration. Young adults are abandoning the suburban subdivisions they grew up in for denser, more vibrant urban settings. Consequently, once-empty lots, city blocks, and otherwise underutilized properties are being replaced with multi-use buildings that can accommodate new residences, office space, and retail.

It isn’t just new construction and redevelopment that distinguishes these urban infill projects. Urban neighborhoods are being revitalized with a mix of retail that includes emergent, specialty, and value retail concepts. All three complement each other in an urban infill space, providing the right mix of practical and aspirational retail options for daytime workers, full-time residents and visitors. New concepts are emerging specifically to fill niches within these urban spaces.

Jerry Hoffman

TargetExpress and CityTarget are examples of a national retailer reconfiguring its layout and rethinking its operational and merchandising strategy with the needs of urban communities in mind. Target’s new “flexible format” stores precisely tailor their merchandise to a local demographic, and are an excellent fit for bustling urban neighborhoods with high foot traffic and a growing population base of full-time residents.

H&M is another value retailer that serves a similar role in its urban locations. At the same time, emergent and specialty brands really help to add valuable flavor and appeal to the local urban marketplace. From downtown Chicago to the Pearl District in Portland, chef-driven restaurants are opening and thriving, and a mix of new and established retailers are both capitalizing on and fueling this ongoing urban renaissance.

Take Hyde Park in Chicago for example, where The University of Chicago, commercial real estate company McCaffery Interests, and local business owners and investors have been collectively involved in transforming the increasingly vibrant 53rd Street corridor. It began with the development of Harper Court, a 12-story multi-use office tower on 53rd Street and South Lake Park Avenue. The new Harper Court building replaces the Harper Court shopping center that was originally built in the 1970s, and features professional office space above a second-floor LA Fitness. Street-level retail includes Villa Shoes and Ulta Beauty. A list of restaurants and specialty dining options includes Chipotle, Native Foods, Porkchop, Starbucks, and the recently opened Jolly Pumpkin brewery. Additionally, the adjacent Hyatt Place attracts plenty of visitors who shop and eat in the neighborhood.

To the west of Harper Court on 53rd Street and Kenwood Avenue is a brand new 13-story multi-use residential high-rise, Vue53, which has 267 residential units above retail. Built on the site of a former filling station, Vue53 is now the new store location of Target’s flexible 20,000-square-foot TargetExpress prototype. Target will micro-target their merchandising mix to meet various demand components that include University of Chicago students, daytime workers, residents and visitors.

On the north side of Harper Court on South Lake Park Avenue and 51st Street are new Whole Foods, Marshalls and Michaels locations. These new-to-Hyde Park retailers are located on the ground floor of City Hyde Park, a new 180-unit high-rise residential building. To the south is Akira, a local women’s specialty apparel and accessories store with multiple locations throughout Chicago. Harper Court has been the centerpiece to an evolving retail and lifestyle urban ecosystem that includes that all-important diverse mix of emergent, specialty and value retail.

Another classic example of an urban infill project featuring both residential and an appealingly diverse mix of retail is in downtown Indianapolis, where the 26-story 360 Market Square residential high-rise is just now coming out of the ground. Whole Foods will occupy 40,000 sq. ft. of street-level retail with approximately 300 luxury units above. A similar project recently opened in the South Plaza neighborhood of Kansas City, at 51st and Main. 51 Main is a new 176-unit luxury apartment building adjacent to the University of Kansas Medical Center. Whole Foods is scheduled to open on the ground floor in 2017.

With the right combination of retail in place, different retail categories all work together to form a cohesive, coherent and synergistic whole. This retail “quilt” is such an important part of the narrative of new urban mixed-use developments and redevelopments. Developers need to ensure that the right retail pieces are in place to satisfy the different needs of expanding communities. A retail feasibility study is an important tool to help make that happen. It provides the kind of meaningful statistical market analysis that can provide insight into the right retail types, and suggestions on the best retail fit for the market/neighborhood in question.

A comprehensive retail feasibility study can also be used to recruit retailers, adding compelling statistical heft and analytical rigor to a development narrative. Demographic projections can be tricky in rapidly emerging urban centers, and leasing plans and recruitment documents need to account for anticipated new households and upcoming residential. The right analysis can deliver that information in the context of both a mid- and a long-term development outlook.

In addition to current market dynamics and retail competition, developers working on retail and mixed-use projects in urban environments need to be particularly cognizant of foot traffic and pedestrian flow. This is because so much of urban retail is street-oriented. Parking is another issue due to convenience and accessibility always being a challenge in urban spaces. However, when executed correctly, the right mix of emergent, specialty and value retail can help elevate an urban mixed-use project–broadening its appeal and optimizing its chances for long-term success.


Jerry Hoffman is president and CEO of Hoffman Strategy Group, a Nebraska-based urban real estate consulting firm. Its website is Hoffmanstrategygroup.com.

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