Urban Legends
Mixed-use projects have shown resilience during the recession. While not immune to the downturn, the format has managed to continue its forward momentum with respectable leasing activities and project completions.
Real estate experts say that the mixed-use format has weathered the downturn because of its multiple components, and indeed there is no evidence to dispute that. Live-work-play projects offer phasing opportunities like no other format—when the residential use stalls, another component will pick up the leasing slack.
Community acceptance of mixed-use has added to its perseverance. Considered a natural evolution of earlier cities and townships in which residents’ lives centered around a tight urban core, today’s mixed-use projects meld varied retail and restaurant components, office space and residences to recreate a concentrated urban landscape that offers not only convenience and interaction, but plays up the sustainability quotient.
In this special real estate feature on mixed-use projects, Chain Store Age focuses on two companies and two projects that have stayed the course during the downturn. Although situated in vastly different parts of the country, both developments share the same strengths—effective tenant mix, strategic integration of components and a deep understanding of their individual markets.
It takes a village: As The Village at Gulfstream Park enters the home stretch toward its February 2010 grand opening, the 1 million-sq.-ft. mixed-use project in Hallandale Beach, Fla., has ramped up its leasing and pushed construction along through phased development.
“We are phasing the project due to the downturn, starting with retail and then adding office,” said Brian Ratner, president, East Coast development, of Forest City Commercial Development, a division of Cleveland-based Forest City Enterprises and the developer on the project.
The Village at Gulfstream Park will feature 410,000 sq. ft. of retail and 89,000 sq. ft. of office in its first phase. “When the housing market picks up, we’ll go ahead and begin work on the residential phase,” said Ratner.
The Hallandale Beach, Fla., market demographic is upscale, and the project is tailored toward the upper end. The open-air design will showcase exceptional retail and entertainment, as well as the landmark Gulfstream Park thoroughbred racing facility. The residential village will overlook the racetrack.
Future phases include plans for a hotel, additional retail and office space.
“Despite the economic downturn, we’re seeing excellent leasing activity,” said Ratner. “We’ve already announced 50 tenants and are 70% leased.” Negotiations continue, and Ratner said more tenant announcements are on the way.
Committed restaurants include III Forks, American Pie Brick Oven Pizza, Brio Tuscan Grille, Cantina Laredo and Lamborghini Café. Nightlife entertainment concepts will be accompanied by daytime boutique-style shopping such as Apricot Lane, Atelier, Crate and Barrel and Lilly McKay.
Construction on The Village at Gulfstream Park is 95% complete.
On the town: Voorhees Town Center, in Voorhees, N.J., wasn’t born as a mixed-use development. The former Echelon Mall, an older enclosed shopping center, has reemerged as a smart-growth, mixed-use project with a right-sized enclosed mall, a Main Street retail component, office space, upscale condominiums, and restaurants and entertainment.
Philadelphia-based Pennsylvania Real Estate Investment Trust launched the redevelopment in 2007, and the product is now coming to fruition.
“To an extent we have been fortunate with Voorhees Town Center,” said Joseph Coradino, president of PREIT Services, LLC. “We have a property type that accommodates the increasingly environmentally friendly times we’re in. The carbon footprint is better than pure retail.” Typical of the mixed-use format, Voorhees Town Center offers a live-work-play-dine-be-entertained environment, “responding to a number of needs that people have, all in one place,” said Coradino.
Voorhees Town Center has also begun opening in phases. The renovation of the mall has been completed; a 50,000-sq.-ft. office building is now headquarters to The Star Group, Philadelphia’s largest advertising agency. And residents have moved into their new condos.
“The first residential building is 75% occupied,” said Coradino. The second building comes on line in late August or early September, followed by two more residential buildings that come on line by year end.
The retail is moving along as well. PREIT has a signed lease with Intoxx Fitness for 15,000 sq. ft., and Rizzieri has opened a premier salon, spa and beauty school. “There is an interest in mixed-use on the part of retailers, particularly the local and regional sets,” said Coradino. “Overall, the format has fared better than its traditional all-retail counterpart.”