Reacting to market surprises in real time
More than 40 years ago, Don Casto bought a large swath of undeveloped property about 10 miles northeast of Columbus, Ohio, near a milltown called New Albany. It was a sleepy village of less than 400 people at the time, but Don knew this was in the path of growth and that the Ohio Department of Transportation had plans to build an Interstate through there that would connect Columbus with John Glenn International Airport. He held the deed and waited.
I-670 wasn’t completed until 2003. In the intervening time, L Brands founder Les Wexner built a home in New Albany while The New Albany Company facilitated additional growth in this very attractive community. Now a suburb of 11,000 people with median household incomes topping $200,000, it was rated as the No. 1 suburb in America by Business Insider.
In 2018, following many years of planning, the partnership behind the development was ready to start construction on an initial 70-acre phase of the interchange-wide development that had since been named Hamilton Quarter. It was intended to be all retail. However, two weeks before we were going to break ground, our plan was altered immeasurably by a game-changing new tenant.
The Hamilton Quarter developers were approached by The Ohio State University about putting a medical center at the location, and very quickly this exciting potential addition became a reality. Their initial phase would be the biggest space on the property—a 250,000-sq.-ft. building plus room that would allow them to double the size of the facility in the future. All at once, what was to be a 70-acre retail center turned into a mixed-use project with 40 acres of retail and a 30 acres of medical campus.
Target was our retail anchor, and we were very fortunate that they worked hard to understand the symbiotic impact Ohio State could have on the project. Others headlining Phase I now include Hobby Lobby, Chick-fil-A, Bath & Body Works, Five Below, Starbucks, and Torchy’s Tacos.
The impact SU Wexner Medical Center would have on our retail contingent would grow to be extremely meaningful. The medical center’s first phase gets over 2,500 visits daily. What’s more, the average annual salary of its plentiful staff topped $100,000. Hamilton Quarter provides a convenient destination for employees and visitors of the medical center to meet all of their shopping and dining needs--truly a one-stop shopping experience.
We have learned that when developing a large interchange site, it’s wise to mold it over time in phases. It is critical to give the local market time to react and tell you what else it needs. We have found this practice lends itself to facilitating longstanding market value in a center.
Our other distinct focus is balancing functionality and convenience for the consumer in site and building design. Striking the balance of high-quality site design, architecture, and visibility to maximize functionality ultimately provides the best opportunity for sustained success – regardless of use.
We have seen these qualities be carried through in Phase II of Hamilton Quarter with tenants that include BJ’s Wholesale Club and Sheetz. Med-tail plays a part there, too. OhioHealth has two freestanding community locations at the Hamilton Quarter interchange.
Hamilton Quarter was originally intended to be a very traditional power center, and I’m sure it would be doing exceptionally well right now in that capacity. However, what we ended up with on that interchange—thanks to thoughtful planning, lots of hard work and a measure of good timing and good luck—was a phenomenal case study for mixed-use. Retail real estate today is a rollercoaster ride that requires great creative thought and effort.
As the author Alan Watts once wrote, "The only way to make sense out of change is to plunge into it, move with it, and join the dance."
Eric Leibowitz is vice president of development and leasing at Columbus-based Casto.