Overheard at ICSC@Midwest: Real estate developers talk projects, challenges
While the Sun Belt region is the hotbed for new retail openings and new real estate construction, the Midwest is home to several major projects that are underway or were recently redeveloped.
At the recent ICSC@Midwest event in Chicago, leaders from various development companies detailed upcoming projects in the region, while offering insights into what can make a Midwest retail development successful.
Robert J. Burk II, co-founder & managing partner, Urban Street Group
On transforming the Veridian (Schaumburg, Ill.) mixed-use property from the
ground up
“A few years ago, we purchased the Motorola corporate campus in Schaumburg, Ill. It is a 330-acre campus, and we bought 225 acres of that. We came up with a mixed-use plan with the Village of Schaumburg. Thinking about who you're leasing space to or who you're creating an environment for, we had to start with literally miles of infrastructure including new roads, new sewers, and demolishing a couple million square feet of buildings that were there. We treated it as a land transaction and then dealt with vertical construction and vertical development as a separate entity.”
On the importance of physical retail
“For us, it's the creation of an environment, whether it's a single-asset apartment building or these larger mixed-use developments or the retail main streets that we're building now. The idea of creating an environment, standing back, and witnessing people enjoy them is important.”
Robert Gould, VP of U.S. operations, IM Properties
On The Corners of Brookfield (Brookfield, Wis.) mixed-use development
“Corners of Brookfield is around 750,000 square feet at present, but we just acquired 4.5 acres west of it which will soon be apartments and around 20,000 square feet of inline retail. We're about 15 miles west of Milwaukee, and anchored by a Von Maur and a Sendik’s grocery store.”
On attracting tenants
“You have to understand your market, and what your demographic is and who you're looking to serve. Winning the hearts and minds of the community is a big thing, and you just don't do that off a spreadsheet. You've got to put in the hard work to attract them there. The competition isn't going to make it easy for you, and sometimes that competition may not just be big landlords or big malls, but the retailers themselves. You have to prove to them that the development is going to work, and that takes time and costs money.”
Lance Evinger, VP of acquisitions dispositions, Hendricks Commercial Properties
On Indianapolis developments
“A couple of our biggest marquee projects are both in Indianapolis. Bottleworks District, which we've been working on for the past 10 years, is a 12-acre site. It was a 1930s Coca-Cola bottling plant which we turned into a hotel. We did 250,000 square feet of office space, and we are planning another office building. We have a 40,000 square foot food hall there, along with other retail and entertainment tenants. Circle Centre Mall, which was the old Simon mall, spans two city blocks and 1 million square feet. We bought the property last year, and we're going to convert that into a pedestrian-focused mixed-use development with a hotel, retail and a small office component.”
[READ MORE: ICSC Retailer Runway: Brands planning store expansion include…]
On economic headwinds
“Interest rates go up and down, and construction costs only go up. If you've got good real estate, you're going to weather every storm. If you build a balanced project that has different categories, like multi-family, retail, hospitality and office, something's always going to be doing well, and something will always struggle a little bit. But overall you're going to end up okay, and I think that retail and office are back on an upswing.”
