The Right Market

It’s not too tough to figure out that “mercato” comes from the Italian word for “market,” but the namesake Mercato mixed-use development in Naples, Fla., is far from a simple Italian marketplace.

The lifestyle community, which has completed structural construction and is opening as tenants complete their buildouts, features not only a collection of eclectic restaurants and eateries but also a vibrant retail tenant mix that includes Whole Foods as anchor at one end of Main Street.

“Because the product is an infill location in the mix of things—in fact, in the heart of the Naples commercial district—we have been able to attract a certain type and level of tenant,” said Dougall McCorkle, senior VP of locally based The Lutgert Cos., co-developer on the project. “The Mercato is in the path of the growth and redevelopment in the area.”

Leasing success has stemmed, too, from a strategic positioning of the project. “We identified a number of years ago that two of the more major retail venues in the market were trending in opposite directions,” said McCorkle. The one upscale department store anchor at Waterside Shops, an outdoor mall, had further upscaled to pure luxury, while the area’s conventional mall—Coastland Mall—maintained its position in moderates and juniors.

“We saw an opportunity to fill a gap in the market with the upper-middle retailer, particularly in a lifestyle format,” he said.

Because both developers—Lutgert and Barron Collier Cos.—are Naples family-based companies, it was especially important to deliver a shopping center that would stand the test of time. “Because we are a long-term holder, it was important to create a product that could flex over time, adapting to changes of uses and changes of customer preferences,” said McCorkle.

The uses, which include office and residential components besides the retail, have also allowed the project to continue a forward momentum in spite of economic challenges.

“During a normal downturn, the mix of uses may help to insulate you, but this current downturn has affected all cylinders of the economy—office, residential and retail,” McCorkle said. But, he explained, what has transpired is typical of what can naturally occur in real estate—different uses are affected at different times, which allows one use to move forward while another is awaiting recovery.

An 11-screen, 1,300-seat movie theater by Cines Unidos is set to open late summer, and a martini lounge—Blue Martini—is slated for a late summer or fall grand opening.