Livingston: "We believe the future of retail real estate looks completely different.’"
Over the past 25 years, Centennial has owned or operated nearly every type of retail real estate, a trait that has benefited the Dallas-based company in boldly meeting the varied demands of today’s consumers.
Chain Store Age asked Centennial’s president, Whitney Livingston, to give us a flavor of the new demands being put upon retailers and operators of retail centers.
Have we gotten to the point where three department stores at a mall are one too many?
It really depends on location, target demographic, market conditions, and the specific retailers involved. And of course, department stores as well as shopping centers must adapt to the changing demands and behaviors of consumers to stay competitive in a dynamic retail environment.
While the department store landscape has changed drastically, we still have thriving centers in our portfolio with three department stores. In centers where three might be too many, Centennial sees an opportunity to gain control of bullseye real estate that’s ripe for mixed-use development.
Have we also gotten to the point where retail-only centers have become outdated?
We believe the future of retail real estate looks completely different. Retail-only centers can be a convenient option for shoppers who are looking to make a targeted purchase. They can also face significant challenges.
We believe that placing a strong focus on community, social connection, and diverse uses better positions our assets to remain relevant. In October this year, we opened multi-family residential at three of our properties and are in the pre-development stages at three other centers.
Millennials grew up in malls. Now they are the heads of young families. What is it they want in retail-based centers that their parents didn’t?
Millennials grew up in the Golden Age of malls and I, myself, am a millennial. We were the first digitally native generation, and we were also the first to expect a seamless omni-channel experience across all brand platforms.
Millennials crave unique experiences. They want activations, events, artwork, pop-ups, and unique food-and-beverage options, as well as gyms, nail salons and dry cleaners. They also expect merchandise to evolve quickly and constantly. Previous generations were more satisfied by purchasing a product with a long shelf life.
And Gen Zers?
What sets Gen Z apart from every other generation is that they’ve never known a world without smart phones or the internet. They are the most tech-savvy generation and are driving metaverse technologies and reshaping the online marketplace in ways that haven’t been seen before.
For Gen Z, retail-based centers must ensure a regular drumbeat of engaging, relevant, and sharable content. Centennial’s online product search platform, SHOP NOW, is just one example of how we are actively testing new digital solutions to better meet the needs of the younger generation. Gen Z also likes to shop quickly using frictionless mobile payment apps like Apple Pay or Google Pay.
What do you aim to achieve in re-tenanting malls with entertainment and restaurant brands? Extending dwell times? Extending property hours?
All of the above! Research shows that 40% of customers will choose a shopping center based on the dining options. F&B is a major traffic driver that significantly increases dwell time. Centennial is in the process of executing several mall-to-mixed-use conversions. We have thousands of multifamily units in progress. We strive to create walkable live-work-play communities where something exciting is always just around the corner. Experience is one thing you can’t buy online.
Last year Centennial acquired Bayer Properties, a developer of entertainment-and-retail-based urban centers. Did that marriage make Centennial a different company?
Our companies have a common DNA. We have “people-first” corporate cultures and share a similar vision for the future of retail real estate.
Centennial’s portfolio primarily consisted of enclosed malls in major markets. And as we know, successfully transforming these assets means reducing the enclosed mall space and adding complementary open-air retail space as well as multi-family and independent living residences, hotels, and offices. Bayer had been an owner, operator and developer of open-air retail space for almost four decades. It had built a reputation for exceptional merchandising, placemaking, and design.
So this deal was a win-win-win. It expanded Centennial’s reach nationally, diversified our portfolio, deepened our relationships with the luxury tenant community, and allowed us to add an incredible roster of seasoned professionals to our team.