Format for the Future
It was fitting that the setting for the Retail Forum on Open-Air, held on Feb. 28, and hosted by Atlanta-based Jones Lang LaSalle Retail, was Atlantic Station in Atlanta’s midtown district. The 138-acre mixed-use development, codeveloped by Jacoby Development and AIG Global Real Estate, and managed and leased by Jones Lang LaSalle, is perhaps the open-air format at its finest and most comprehensive. Atlantic Station’s livework-play community is an urban smorgasbord of retail, office, restaurant and residential.
Developers and retailers aren’t debating the success of Atlantic Station-type developments or format siblings such as power centers, specialty centers, grocery-anchored centers and the ever-popular lifestyle centers. Rather, they’re replicating them as fast as possible. “We’re fairly built-out in terms of enclosed malls,” said Greg Maloney, CEO and president of Jones Lang LaSalle Retail. “The real opportunity is in open-air.”
Opportunities, according to Maloney, aren’t restricted to development. Property management is another area in which the open-air center presents wide-open growth possibilities.
During its retail forum, Jones Lang LaSalle announced the launch of a dedicated open-air division that will focus specifically on growing the company’s third-party management and leasing business in this niche sector. Three industry veterans, all formerly with Inland Real Estate, were hired to lead the initiative. Michael Longmore, Sig Arnesen and Chris Rehmet joined Jones Lang LaSalle as senior VPs.
“Bringing on board Mike, Sig and Chris adds a new dimension in our retail platform,” said Maloney, “and will enable us to better serve the needs of new and existing clients in the open-air sector.”
Open-Air BuzzEven industry super-veterans with 20 or more years of experience are grappling with shopping center format terminology. Overheard at the Jones Lang LaSalle Retail Forum on Open-Air, held at trendy Twelve hotel in Atlantic Station: “We are defining open-air as power, specialty, lifestyle and grocery-anchored centers,” said one Jones Lang LaSalle executive.
Another industry attendee struggled to come up with a concrete explanation for what, exactly, is a lifestyle center? The consensus by all participants in the forum is that the shopping center industry needs more uniformity in its definition of the various formats, and no one need be concerned that his or her definition may not be “right.”
The plan is actually pretty straightforward. Jones Lang LaSalle, the third largest property management company in the country, has about 100 offices nationwide. The new open-air division will align itself with the company’s other offices, injecting open-air specialists into those pre-existing organizations. “This is an expansion of our services, certainly,” said Maloney, “but it is also a specialization.” Existing clients will also serve as service launch pads. “We will start with our 20 largest clients, garnering commitments from as many as possible to take over the property- management services of their open-air centers.”
Open-air centers, explained Maloney, present a tremendous service opportunity. “Developers self-manage their developments,” he said, “and with so many centers owned by third-party investors, even foreign owners, there is a gaping hole in on-site property management.”
Because open-air is the fastest-growing shopping center category, a division dedicated to its management is not only innovative, it’s strategic. “While open-air centers, unlike enclosed malls, don’t always require an on-site property management team, they do need management teams in the market,” explained Kristin Mueller, executive VP of business development for Jones Lang LaSalle. “Our new team’s niche experience will make us the only national firm with a dedicated division that can service the unique needs of openair owners.”
Mike Longmore, who will spearhead the new division, added, “The open- air format—especially centers such as Atlantic Station—is edging closer to the enclosed mall. And open-air will continue to evolve as it incorporates additional uses.”