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The Comforts of Home


The concept of a shopping center as a place where people simply show up to make a few purchases and leave is becoming passé. Increasingly, developers are building mixed-use centers that include residential, office and entertainment components, which turn them more into a consumer home base and less of a functional destination. Add in amenities like town squares, public parks, community gardens and amphitheaters, and the “shopping center” becomes more of an all-around “center” of activity.

Walk this way

Mixed-use centers are popping up for a variety of reasons. According to Brett Hutchens, partner of Sarasota, Florida-based CASTO Southeast, the southeastern development arm of Columbus, Ohio-based CASTO, growth in this category is particularly strong in urban areas and more focused on combining retail with residential components than with office components. He also offered insight into what is driving the popularity of centers that let consumers live near where they shop and eat.

“Younger people prefer to live in an urban area where they can walk to fill their needs for services,” said Hutchens. “This includes grocery, drug and service retailers, as well as restaurants.”

Hutchens said that hospitality businesses are especially valuable to retail tenants of mixed-use centers, as they have high customer turnover and bring people to the street.

“You have businesspeople traveling and looking for entertainment in the evening,” said Hutchens. “And the residential component itself, particularly rental as it has a higher density, puts more people in the street.”

CASTO’s Winter Park Village development in Winter Park, Florida (just north of Orlando), is a 525,000-sq.-ft. mixed-use center that includes 360,000 sq. ft. of retail space and 111,000 sq. ft. of office space, as well as 58 loft rental units on the second floor of a former Dillard’s building in the interior of the center. CASTO is adding another 204 multi-family rental units in a freestanding building in a corner of the site, slated for a November 2014 opening. Retail tenants include Publix, Ann Taylor, Soma and White House | Black Market. Other consumer-focused tenants include Regal Cinemas, as well as national restaurant chains, such as P.F. Chang’s, Cheesecake Factory, Brio Tuscan Grille, Ruth’s Chris Steak House and Mitchell’s Fish Market.

“Residents can do their grocery shopping and eat at one of the restaurants,” said Hutchens. “They can also work there. We can service all their needs.”

Renters equal customers

A wave of mixed-use retail/residential centers has washed over the country in recent years. As explained by Howard Paster, president of St. Paul, Minnesota-based shopping center devel-opment/management firm Paster Enterprises LLC, several factors distinguish the current trend from the retail/residential center trend observed in the previous decade.

“What we’re mostly seeing is projects in dense areas with market-rate multi-family units above storefront retail,” said Paster. “It’s different from the last wave in the 2000s in that it’s fueled by multi-family rental units. More people are looking to live in apartments. People feel more flexible, portable and do not have major commitments with a typical one-year lease.” And what draws consumers to mixed-use centers is often very similar to what attracts the retail tenants, according to Paster. >

“In these urban areas, retailers want community elements like proximity to residents, environments with a lot of walkable hardscaping and landscaping, and community public spaces to draw people to storefronts with a variety of amenities,” he said.

The 1730 Plymouth Road mixed-use center that Paster is developing in partnership with Bader Development in Minnetonka, Minnesota, offers many of the features discussed by Paster. The center measures 150,000 sq. ft. in total, comprised of a 16,000-sq.-ft. ground-floor retail space with five levels of 120 residential units above and two levels of underground parking below.

Slated to start in late 2014 and be completed in spring 2016, 1730 Plymouth Road will feature prominent national and local retail and restaurant tenants, as well as market rate luxury apartments. This mixed-use development includes a blend of both commercial and multi-family residential space, with amenities including an outdoor second-floor pool and cabana area, interior community and fitness rooms, and rooftop gardening area.

Down on Main Street

Mixed-use retail centers that include the full-scale offerings of office space, restaurant, residential and hotel components are no longer a rarity.

“The days of building or retrofitting large, ‘single use’ retail environments are long gone,” said Anne Mastin, executive VP real estate of Columbus, Ohio-based mixed-use town center developer Steiner + Associates. “Mixed-use town center development and redevelopment is the single biggest opportunity in our industry today.”

Mastin said that mixed-use redevelopments are a strategic solution for owners with existing properties that may include shuttered department stores in an era when those traditional anchors are not expanding.

“These projects not only create greater value for their owners, but they bring a welcomed ‘Main Street’ to the greater community,” said Mastin. “People like to be outdoors and eat at cafes. Effective mixed-use developers treat their open spaces and parks like anchors. They create environments where guests come more often, stay longer and spend more.”

According to Mastin, uses including office and residential bring a sense of place and community to retail projects and are “all additive,” when designed and programmed into the overall masterplan of the project.

Partnering with Bucksbaum Retail Properties, Steiner + Associates is developing the mixed-use Liberty Center in Cincinnati. Opening in fall 2015, Liberty Center will include a 200,000-sq.-ft. Dillard’s department store; 80,000-sq.-ft. Dick’s Sporting Goods; and restaurants, including Cheesecake Factory, Brio Tuscan Grille and the first Kona Grill to the Cincinnati market. Other amenities include 75,000 sq. ft. of office space; 240 residential units totaling 190,000 sq. ft.; a 130-room hotel; an 82,000-sq.-ft., 16-screen CineBistro theater with six dine-in screens; as well as tree-lined pedestrian walkways bisecting the site, heavily landscaped parks and natural gathering spaces.

The convenient approach

Mixed-use shopping centers offer consumers tremendous convenience. In some cases, that convenience extends to the comforts of home.

“People live in mixed-use projects,” said Donna Taylor, senior VP asset management and new business development for Covington, Louisiana-based full-service real estate company Stirling Properties. “They have everything they need within walking distance of their home.”

According to Taylor, the presence of residents and office workers in mixed-use centers creates built-in customers for retail tenants. Mixed-use centers also frequently offer entertainment and dining options to further the convenience they offer to consumers.

One example of a mixed-use shopping center with a high degree of consumer convenie

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