When Kite Realty Group acquired Oakbrook, Ill.-based Retail Properties of America, Inc. (“RPAI”), last year, the president of RPAI’s Eastern Division, Matthew Beverly, was quickly snapped up by Cullinan Properties to serve as its new CEO. The Peoria-based developer of mixed-use properties such as Streets of St. Charles in metro St. Louis and Rock Run Crossings in Chicago metro views real estate development similarly to RPAI. We sat down with Matt to see how things were progressing.
How are shoppers different than they were five years ago? I think today that consumers are more focused on their most precious commodity: their time. Today’s shoppers consider their experience when allocating their time. Whether it’s quick retail errands, service visits, or spending the day shopping and sharing a meal with friends, consumers are looking for the best way to spend their time. So, in designing a property today, it needs to be viewed as a gathering place providing a unique experience that is activated day and night.
As a result of the 2020 COVID-19 pandemic, what changes in consumer preferences or attitudes have you seen? We’ve seen a migration to working remotely, both full-time and in a hybrid format. Technology in recent years has furthered remote working capabilities, but the pandemic forced people to work from home, using these advancements daily. We’re also seeing employers move to suburban locations with headquarter relocations or satellite office openings. We have seen employers place a premium on sites that offer the same type of amenities as the urban locations, with robust food and entertainment options. As a retail owner and developer, Cullinan is trying to meet these demands by integrating the office and retail components.
Over the years, landlords have tried to “internet proof” their retail centers at every class of shopping center such as power and neighborhood centers. How has the pandemic altered this strategy? We’ve been expanding the variety of our restaurant lineups for years now bringing a better balance at these retail centers between soft goods, services and food uses. What we’re seeing post-COVID is that the space configuration for these restaurants and tenant focus has changed. We’re working with tenants at our existing properties and development projects to identify locations to add drive-thrus, larger outdoor seating areas and short-term parking areas for to-go or delivery parking.
Cullinan has focused on its Midwestern base and worked assiduously to cultivate relationships with local communities and municipalities. Is this essential for developers in these changing times? Without a doubt. As we focus on additional markets in the South and Southeast, we’re opening satellite offices to foster relationships to acquire great real estate and execute our development strategies. With the trend toward remote working and employers having a greater presence in suburban markets, there’s a lot of great real estate out there that is miscast, whether it’s a property in need of densification or a change in use. These types of developments require vision as well as the ability to connect with local municipalities and surrounding communities.