Back in the 1980s, shopping center developer Dan Poag was developing a new property when his anchor, Kroger, dropped out. Infuriated, he and partner Terry McEwan vowed to devise a retail center concept that could thrive without anchors. Thus was born the lifestyle center—new-built projects that resembled organically developed downtowns with sidewalks, greens, and stores with distinct architecture and design.
Poag Shopping Centers properties like La Centerra at Cinco Ranch in Texas and The Promenade Shops at Orchard Valley set a new retail real estate trend that, post-pandemic, has become more relevant than ever. Dan’s son Josh now runs the business, so we asked him to lay out some of the fine points of lifestyle centers.
Tell us about Poag’s approach to curating a tenant mix.
We don’t try to be all things to all people when putting tenants together. If you look at some of our tenant rosters, you might think there are some that don’t match. But, as with old towns, we believe there needs to be individuality among tenants. We want them to create their own identities and we give them a lot of latitude to design their own storefronts. Otherwise, it looks like a strip center.
Malls that have lost department store anchors in recent years are adding office and residential to activate properties through all dayparts. Is that something you’ve always done?
We have office space within some of our centers, but almost all of them are surrounded by office parks. When we were developing our Promenade Shops at Saucon Valley in Pennsylvania, we were pitching it to an office park as an amenity for workers. It’s a formula that works, like in Research Triangle in North Carolina.
Modern town centers depend greatly on weekly events programming as traffic draws. Has that always played a role in your lifestyle centers?
It’s something we’ve done since our inception. We didn’t have multimillion-dollar budgets to advertise on TV, so we always have used events to bring people to the centers and create an emotional tie to the communities. Going back years ago, my dad and Terry worked with the Susan G. Komen Breast Cancer Foundation to do night walks. We work with and encourage tenants to stage regular events—yoga classes put on by Lululemon is a good example.
Did you survive the pandemic well due to the diversity of your tenant mixes?
We had a tough time. Traffic just dropped by 80%. Now, we have medical tenants and grocery stores—that’s 20% of our portfolio--but lots of individual tenants shut down. It depended on where you were in the country, though. We have properties in Florida and Georgia where, by last May, you didn’t know there was a pandemic going on. In the Northeast, re-openings were much slower.
What was your biggest learning during the pandemic?
Adaptability and flexibility. It’s something we’ve always preached. But the biggest learning during the pandemic was that people don’t have to eat inside. We set up picnic tables. And they don’t have to eat on the property. We embraced Door Dash and Uber Eats. We set up special parking spots for them, and that’s something that is going to stay.