Five retail concepts urban developers are clamoring for
Multifamily live-work-play projects continue to pump new life into American downtowns, but their eventual success is dependent on developers curating the right retail for the right place. Their driving consideration is to identify candidates that suit the tone and tenor of the neighborhood and, most importantly, the residential space. A fast-food brand, for instance, is unlikely to be a good fit for a luxury apartment building.
First and foremost, developers strive to enlist retail concepts that people like. National retail chains, likewise, would do well to stay in touch with what retail concepts are resonating with multifamily tenants. We at Broder & Sachse are involved in the genesis of many such projects and we’ve developed a short list of the retail concepts most desired by multifamily developers in 2018:
Coffee’s still hot. You can’t have a discussion about retail and multifamily without mentioning coffee shops. Starbucks still rules, but coffee consumption continues to rise and millennials continue to thirst for new (and pricier) coffee concepts. Chains like Blue Bottle Coffee, for instance, provide a trendy boutique feel but retain the advantage of being a chain. People know what to expect at any location, and so do developers. The proliferation of coffee concepts is a trend that is evident across the retail spectrum, with plenty of local, regional, and national names involved.
Authenticity wanted! Local, non-chain retail concepts are a growing phenomenon, especially in the restaurant sector. Developers are clamoring for hometown and home-grown eateries and many established national chains are taking a backseat. Nationals looking to compete in urban trend centers need to recalibrate their brands with an authentic feel or fresh approach. Casual dining concepts are getting the most love from developers at the moment. Bakersfield, inspired by authentic Mexican street fare, is one concept currently expanding across the Midwest and the Ohio Valley.
Snacks and service. Aside from dining, service retail such as laundromats, convenience stores, and banks remain among the strongest performing categories for multifamily. Urban population growth drives a corresponding need for more service retail. At a time when there is continuing uncertainty about the relationship between online retailers and traditional brick-and-mortar brands, service retail will never go out of style.
Right-sized regulars. In the early stages of downtown turnarounds — like the one in Detroit — civic leaders and developers tend to be focused on interesting and innovative retail and dining concepts. But as Detroit develops and more retail space opens up, we’ll likely see more familiar national concepts entering the market. To succeed, however, they must be willing to accommodate older building stock and abandon their cookie-cutter store sizes and layouts. This will challenge national brands for years to come. Look at how long it has taken Target to refine and settle on a workable urban concept.
This is not to say that retailers aren’t discovering creative new ways to differentiate themselves. Sometimes it’s a high-end concept — The Carter Snell Skin Center at The Scott at Brush Park in Detroit, is one. Other times it’s a standout product offering like the artfully crafted bikes from Detroit Bikes at The Albert in Capitol Park. Retail center developers are striving to create dynamic, diverse, and engaging urban environments. That’s not easy, and they welcome all the help that innovative retail chains are willing to bring them.
Richard Broder is CEO of Broder & Sachse Real Estate, Inc., a Detroit-based real estate development company. Contact Richard directly at [email protected]
Big mixed-use project underway in Overland Park
One of the more high-flying mixed-use projects in the nation is poised to spread its wings over Northeastern Kansas.
Ten years ago, Doug Price saw a few schools rise up on a 300-acre farm site in Northeastern Kansas, foresaw residential construction to follow, and envisioned the rise of a new community on the site. The president of Price Brothers acquired the Overland Park, Kansas, property, and started erecting single family homes there in 2015 along with a grocery-anchored shopping center. Next to surface was a major employer in Shawnee Mission Health.
This year, however, the totality of Price’s vision begins to take shape.
Ground has broken on the remainder of the $750 million mixed-use Bluhawk project, which Price Brothers promises will bring retail and entertainment attractions not seen there before in Overland Park, an upscale suburb of Kansas City. They include:
• An indoor multi-sports facility to be managed by Sport Stable that will become the regional base for teams in an amateur hockey league comprised of promising players at several age levels. Price Brothers expects it to draw 1.5 million visitors a year.
• A 316,900-sq.-ft. outlet retail center to be leased and marketed by The Outlet Resource Group.
• A 40,000-sq.-ft. branch of Cosmosphere, a Hutchinson, Kans., Smithsonian-affiliated museum housing the world’s largest collection of artifacts from the U.S. and Russian space programs
Price said his company took the time to let Bluhawk evolve as a community before embarking on the retail portion of the project. “We could have built the lifestyle center with the department store bookends, but thank goodness we didn’t,” Price said. “We came to decide that the future was direct brand merchandising and brought in TORG to create the outlet center.”
The first phase of Bluhawk is due to open in 2020, with Phase 2 planned to open soon after. The completed project will include a civic center, three hotels, 80,000 sq. ft. of office space, and an 800-stall parking structure.
CBRE hires away Transwestern unit in New England
In an unusual bit of mass-recruiting, CBRE has hired away a 48-person team of commercial real estate pros from Transwestern to boost its already robust New England operation.
Led by Steve Purpura, the team is the descendant of an independent company that joined Transwestern several years ago. It handles all classes of commercial real estate, providing tenant advisory, agency leasing, and capital markets services.
CBRE spokesman Robert McGrath said the addition of the team was in no wise an acquisition. Each member was recruited individually and Transwestern was apprised of the recruitment as it was ongoing.
Purpura’s unit completed more than 9.1 million sq. ft. in leasing transactions in Massachusetts during 2017, making it the region’s third-largest commercial real estate operations, according to a ranking by the Boston Business Journal.
“These individuals are among the Northeast’s most talented real estate professionals and their passion for producing exceptional client outcomes is a perfect fit with our market-leading CBRE/New England team,” said Jack Durburg, group president and CEO of the Americas at CBRE.
CBRE’s Boston-based operation, which is a 50-50 joint venture with an unnamed partner, currently includes more than 450 employees.
Transwestern issued a statement wishing well to Purpura and his team and affirming its commitment to the New England region.
“Transwestern is an expanding national company. We continue to add producers from coast to coast. We are confident in our growth strategy which enjoys substantial momentum,” the statement read.