REAL ESTATE

5Qs for Stephen Lebovitz on competitive socialization

BY Al Urbanski

Competitive socialization sounds like the province of psychologists and social workers. In actuality, it’s a new class of retail that is revitalizing traditional malls. It’s also one of the favorite topics of CBL Properties CEO Stephen Lebovitz, who is redeveloping more than 20 of the large mall owner’s properties. Thirty Sears stores closed at CBL malls last year, and concepts like Dave & Busters and Main Event are filling many of them. We asked Stephen for his take on competitive socialization.

A JLL study on competitive socialization says center owners are “cautiously optimistic” about new entertainment concepts. Where do you stand?
We have definitely embraced it. We opened Kings Dining & Entertainment at CoolSprings Galleria in Nashville back in 2014 and that project has been a huge win. Sales are up across the board there by 30%. Restaurants are also a part of these redevelopments, but entertainment is playing a huge role. We opened Dave and Busters and Round 1 at Jefferson Mall in Louisville last year. We currently have 14 entertainment deals across the portfolio.

The average size of these concepts is large, around 15,000 square feet, according to JLL, not large enough to fill an empty Sears store, but too big to situate just anywhere. Where do they fit in the CBL puzzle?
Ours are larger. Dave & Busters are around 20,000 sq. ft. This new generation of competitive socialization and entertainment concepts have a lot more components to them. There’s a concept called Whirlyball, kind of like lacrosse on bumper cars, that’s taking 30,000 sq. ft. of a Sears store at Brookfield Square in Wisconsin. They run a great restaurant and bar and it’s really popular in Chicago and Milwaukee. Then we have a Tilt location that’s taking over a former Sears at CherryVale Mall in Rockford — more than 100,000 sq. ft.

How competitive is it among center owners to land the first-in-market hot concepts?
Within this category of competitive socialization, they want to be part of the dominant center in the market for the traffic, so we’ve had little problem signing top operators. CBL malls are usually the dominant centers in the secondary markets where we do business.

Has the new prevalence of entertainment and food and beverage in malls changed forever your conceptualization of the shopping mall?
What we’re doing is transforming our malls into suburban town centers. This also involves food and beverage and fitness and service uses. We’re even adding nontraditional uses such as hotels, office, and medical. We’re really broadening the definition of what goes into the mall.

What’s your personal favorite alternative entertainment concept, where you might hang with friends and family?
At our Meridian Mall in Lansing, we replaced a Younkers with a concept called High Caliber Karting. These guys are taking the former department store and putting in two go-kart tracks. It’s super fun and is going to have VIP rooms for parties, axe-throwing, and some kind of a soccer derivative game. The founders are in their 30s and are incorporating tech and virtual reality into their game. With Michigan State University less than five miles from the mall, we think this is going to be a hit.

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