REAL ESTATE

Density is the Northeast’s retail calling card

BY Al Urbanski

The Northeast market has always had lots of what both retailers and retail center developers want — density — and the most densely populated region of the country continues to pack them in. Boston added more than 55,000 jobs in the past year, and high-paying ones at that. Median household income there is $85,000. New York City neighborhoods continue adding residential high-rises and rezoning street-fronts for the retail sure to follow. Average retail sales per month in Gotham top $7,000. The population has risen by more than a quarter-million in Washington D.C. and median household incomes approach six figures.

Retail is being re-born in Center City Philadelphia, where PREIT and Macerich are remaking the former Gallery at Market East into Fashion District Philadelphia, a mix of outlet stores and new food and beverage options. And the closely-packed urban character of the Northeast aids PREITs ongoing effort to fill empty department store spaces at malls in prime locations.

PREIT will open six replacement retailers in vacant anchor space this year. At PREIT’S 768,000-sq.-ft. Viewmont Mall in Scranton, Pennsylvania, for instance, a former Sears box was recently re-fitted with a 90,000-sq.-ft. Dick’s/Field & Stream combo-store and a 23,000-sq.-ft. HomeGoods.

“In-demand retailers from the hot off-price segment, such as Burlington and TJX Brands, are backfilling former department stores and driving more traffic and sales than their more traditional predecessors,” said PREIT CEO Joe Coradino. “Demand for quality mall space is robust from brands that understand and embrace the idea that unique experiences are the key for long-term success.”

The tenant mix is changing at successful, secondary-market malls, too, such as DLC’s quarter-million-sq.-ft. Mid Valley Mall in Newburgh, New York. Catering to consumers’ more exacting food and beverage demands, DLC partnered with the Price Chopper on an $8 million renovation of the supermarket chain’s 74,000-sq.-ft. location there. The new concept, called Market 32, presents a quality food-focused approach using contemporary displays and design.

“There are a lot more options for open-air operators now. There’s less of a traffic gap versus traditional malls,” said DLC CEO Adam Ifshin. One area DLC is focusing on is upgrading its quick-service food options, Ifshin said. The developer recently initiated a relationship with Firehouse Subs to deliver something new to long-time customers.

Jeff Edison, CEO of Phillips Edison, operator of some 30 grocery-anchored centers in the Northeast, says that adapting to local market tastes is something he’s been dealing with since he started his company more than 25 years ago.

“The business has not changed much, though one area where we see a lot of change is in prepared foods,” Edison said. “People are buying meals out of the home more. It becomes a necessity to have a Subway store in a center.”

Buying patterns also shift for grocery-anchored centers during economic downturns, he noted. “In a recession, Whole Foods shoppers will go to Kroger.”

But even in the Northeast, one finds growth markets. In Gaithersburg, Maryland, a northern suburb of Washington, D.C., RPAI took advantage of a boom in affluent residents with Downtown Crown. Its name describes exactly what it is – a town center built in and around the Crown residential development, where townhomes start in the $700,000 range.

“In downtown Washington, you can’t add any more GLA. It’s all built out and you can’t go vertical because you’re limited to 13 stories, so you have to go to the suburbs,” said Greg Goldberg, VP of leasing for RPAI’s Eastern Division.

D.C. has some of the largest and most affluent suburban districts in the country and Gaithersburg, home to the FDA and attendant biotech and healthcare corporations, is one. The retail at Downtown Crown consists of two elements—a town center with necessity retail such as a bank and a Starbucks complemented by a lifestyle center with bar and dining options the likes of Old Town Pour House, and the Latin Kitchen & Rum Bar.

It could be argued that the first mixed-use developments rose up in the Northeast. Parkchester, a planned community of 43,000 people erected in the East Bronx in 1940, was acquired some 10 years ago by Olshan Properties, which has tirelessly kept its retail experience in line with times. The longstanding Macy’s is now joined by Blink Fitness, The Children’s Place, and New York & Co.

“Parkchester is an excellent example of a thriving mixed-use environment,” observed Ken Marshall, Olshan’s head of retail at Olshan Properties. “The 500,000 sq. ft. of retail space complements and supports the 12,000 residential units and offices. Parkchester is a city within the city.”

The bottom line: Density has long driven retail innovation in the Northeast, and it will continue to do so and inspire retail developers nationwide.

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REAL ESTATE

North American Properties promises ‘future-proof’ retail

BY Al Urbanski

Along with death and taxes, it could be said, the future is also inevitable, so it makes sense for a challenged retail industry to take stock of it.

That could be the underpinning of the “future-proof retail” approach North American Properties is touting at the ICSC New York Deal-Making Show this week. According to the company, the three large-scale projects featured at the company’s booth all have one thing in common: community.

The three projects, two new and one re-do, are:

Riverton: Billed as the largest mixed-use project in New Jersey history, Riverton will turn 418 acres of on the Raritan River into a full-fledged community (including marina) at one of the busiest highway intersections in the Garden State.

Revel: This project is bringing the people to the entertainment instead of vice versa. Anchored by Georgia’s Infinite Energy Center, a leading event venue, Revel’s leasing agents won’t have to bother recruiting Cinemex or Dave and Buster’s. The destination will be completed Holiday 2019.

Colony Square: The Southeast’s first mixed-use project (built in 1968), Colony Square is being transformed into an arts-infused destination with 940,000 sq. ft. of office space, 260,000 sq. ft. of retail (including a food hall). a 466-room hotel, and 262 luxury residences in Midtown Atlanta. The first phase is set to open in July.

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REAL ESTATE

Augmented reality is Santa’s helper at Centennial malls

BY Al Urbanski

Even before they get to the Santa line, families shopping at Centennial-owned malls this holiday season are able to interact digitally with elves, snowmen, and reindeer positioned throughout the atriums.

The Dallas-based company gifted its customers with Centennial AR, an augmented reality app downloadable to mobile phones. Point the app at holiday character posters stationed throughout the properties, and 2D or 3D interactions with characters are summoned up.

Shoppers can use their camera function along with the app to place themselves in the scene and share it as a holiday greeting with friends and family.

“Our team is constantly evaluating opportunities that support not only our shoppers, but also our retailers and business partners,” said CEO Steven Levin.

Centennial partnered with digital media studio Clever Fox on the app, which is available for free via the App Store and Google Play.

Centennial properties include the Connecticut Post Mall in Milford, Conn.; the Fox Valley Mall in Aurora, Ill.; the Brazos Mall in Lake Jackson, Texas; and the Vancouver Mall in Vancouver, Wash.

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