A Little Bit of Everything
It’s no secret that today’s consumers have busy lives. And, while online retailers may have the convenience edge, e-commerce simply cannot offer the experience found in physical spaces. Smart mixed-use developers are capitalizing by filling the gap — plugging in a wide range of components, such as entertainment, new-to-market stores, hospitality, residences and offices to make brick-and-mortar far more compelling than a computer experience.
Chain Store Age talked to five leaders in the mixed-use development space about what is trending, what projects are on the boards and how the future of mixed-use looks.
That’s Entertainment
Consumers live in a world where entertainment is always a click or a tap away. They are taking this constant entertainment mindset with them when they shop in a physical environment, and mixed-use retail developments are responding.
“Customers want to be entertained, and they want diversity of entertainment,” said Nick Benjamin, development director of Baltimore-based real estate developer The Cordish Companies. “Our customers want to be able to sample craft cocktails created by local mixologists when they shop for clothing, and they want access to a resort lifestyle and resident sommelier when they choose to live downtown.”
Mixed-use developments can provide entertainment options that cannot be replicated online or in the suburbs. For example, Cordish offers a large horseshoe bar in the center of its Garment District boutique within its Kansas City Power & Light District development, and a 20,000-sq.-ft. outdoor pool amenity at its One Light Luxury Apartments residence.
According to Benjamin, mixed-use projects should offer a combination of office, hotel and entertainment uses to best serve their retail tenants.
“A vital office base creates weekday, daytime traffic; hotels produce weekend and weeknight business and tend to bring in customers prepared to be entertained and willing to spend to do so,” said Benjamin. “Residential provides steady weeknight and weekend volume. The best projects combine all of these uses with broad and creative entertainment offerings.”
The 800,000-sq.-ft.-plus Kansas City Power & Light District mixed-use project in downtown Kansas City, Missouri, illustrates the type of entertaining and varied environment Benjamin describes. It has strategic anchors covering a broad spectrum of uses, such as the Kansas City Live! two-level entertainment complex. Other anchor tenants include H&R Block’s world headquarters; a Cosentino’s grocery store; and the 350,000-sq.-ft., 307-unit One Light Luxury apartments.
The District’s more than 50 bars, restaurants and shops also include Sprint Studio and Bristol Seafood Grill. The District was designed with a focus on public and outdoor space, with multiple outdoor amphitheaters and plazas, patios, indoor/outdoor spaces and rooftop patio. It will eventually feature five high-rise apartment and mixed-use buildings in addition to the first phase of 475,000 sq. ft. of retail. The first two, One Light and Two Light Luxury Apartments, will be complete in November 2015 and the first quarter of 2018 respectively, bringing an additional 900 residents and more than 700,000 sq. ft. to the Power & Light District.
Bringing Retail Home
Mixed-use retail developments offer many advantages to developers and retail tenants. One of the biggest advantages is the ability to bring retail home.
“We are seeing market-rate apartments above first-floor retail in dense suburban and urban communities,” said Howard Paster, president of St. Paul, Minnesota-based Paster Properties. “Proximity to transportation and entertainment provides convenience for the residents and the shoppers.”
In addition, Paster said mixed-use developments add a communal atmosphere to the shopping experience by providing public community space for the existing area residents, residents in the new project and customers of the first-floor retail outlets.
“Mixed-use developments create sustainable communities that enable people to live, work, shop and play all in one vicinity,” said Paster.
Although residential and retail complement each other in establishing communities, Paster advised developers, including multi-family dwellings, to use care in their planning.
“Multi-family above retail does require more attention to detail as the mix-of-uses can cause potential conflicts with noise and parking,” said Paster.
Paster Properties is in the process of developing a 155,000-sq.-ft. mixed-use project in Minnetonka, Minnesota, that illustrates the blend of retail and residential Paster discussed.
The mixed-use development will include new, multi-tenant retail space on the ground floor and 115 luxury apartment units featuring oversized windows and large balconies on floors two through six. Sixth-floor units will include even larger walk-out terraces.
Amenities will include heated underground parking, an elevated outdoor pool deck, lounge areas, a fire pit, an indoor clubroom and fitness center. Two levels of underground parking with 190 stalls will be provided for apartment residents, and 80 surface parking stalls will serve retail uses.
“This development will breathe new life into what is currently a limited purpose retail and office environment as the city of Minnetonka continues to grow and thrive,” Paster concluded. “We are looking forward to strengthening our commitment to creating centers that enhance the surrounding communities and serve as a place to bring the citizens together.”
Construction began in August 2015, and the development is slated to open in early 2017.
Shop to Live
Considering the time demands on today’s busy consumer, it is not surprising they are looking to combine shopping with other activities. Mixed-use retail developments are providing customers with the opportunity to accomplish an increasing number of life tasks in conjunction with shopping trips.
“Consumers have countless options for shopping and are looking for all-encompassing experiences to complement shopping trips,” said Joseph F. Coradino, CEO of Philadelphia-based Pennsylvania Real Estate Investment Trust (PREIT). “This is why we’re seeing more and more centers with grocery anchors, fitness centers and medical offices. These are additions that allow customers to get their shopping done while running errands, enjoying lunch or even squeezing in a workout. It’s all about convenience.”
In particular, Coradino said that dining and entertainment options are especially valuable offerings in mixed-use developments.
“Restaurants provide that social experience that shoppers are craving and are additive to the overall environment, in that the consumer dollar isn’t competing with other retailers,” said Coradino. “Studies have shown that those who dine at a restaurant in a mall stay longer and have a higher propensity to spend.”
PREIT seeks to provide customers at its mixed-use centers an enhanced experience with amenities like play areas, Wi-Fi, beacons, seating and charging stations and, of course, dining and entertainment options. At its Springfield Town Center development, PREIT’s s