Trend Talk
Any early skepticism about the longevity of mixed-use has been silenced. The art of combining components to create a live-work-play project has evolved into a science. And those that have become particularly adept at building, leasing and managing mixed-use properties say that the right formula makes for a successful development. Chain Store Age talked with three top developers of mixed-use projects and uncovered several trends that are governing, and continuing to evolve, the format.
Trend #1: Adding local flavor
There was a time when developers filled restaurant spaces with chain players and called it a day. Not so anymore. The most successful mixed-use owners have done their homework, researching the locale’s best-in-breed restaurateurs and luring them to the projects — to overwhelming patron response.
At Voorhees Town Center, in Voorhees, N.J., Pennsylvania Real Estate Investment Trust made it a mission to seek out and reel in the area’s top dining establishments, thereby “defining both the retail and the residential,” according to Joseph Coradino, president of PREIT Services Inc. and PREIT-Rubin, Philadelphia.
“Introducing fine-dining, best-of-breed local restaurants helps to drive the upside of the project,” Coradino said. PREIT’s Voorhees Town Center, a 1.5 million-sq.-ft. project that combines retail, residential and commercial uses, has several regional restaurant heavy-hitters under construction, including Firecreek Restaurant + Bar, Doghouse Gourmet Burgers and Osteria Duo, along with local players Spoon Me Yogurt Emporium and Coffee Works Café.
This trend goes beyond even the restaurants, Coradino said. “To an extent, the street residential needs to be experiential, so that residents can dine and shop and go to the gym and visit jazz cafes and coffee shops, and enjoy all the unique experiential real estate that starts to define what the balance of the restaurants and the retail are going to be like, and what the residential quality and character are going to be like,” he said. “And hopefully it will drive the residential rents.”
Trend #2: Creating a full-scale pedestrian experience
The ability to walk from one component to the other, and complete daily-needs activities along the way, is key to the success of a mixed-use project. And developers are finding that not only the merchandising mix, but the positioning of the various tenants, play a huge part in the customer experience and buy-in.
Columbus, Ohio-based CASTO, and its lifestyle division housed in Sarasota, Fla., has long been a proponent of rolling in additional uses to its retail centers to create the kinds of synergies that today’s consumers want from their shopping and entertainment destinations. According to Brett Hutchens, partner at CASTO, people want convenience whether they are at home or traveling, and mixed-use projects provide one-stop answers.
“We have always defined a lifestyle center with a mix of uses, rather than by type of tenancy,” Hutchens said, “and the integrity of that real estate product is still in place today. People want convenience, and as a result we can appeal to hospitality users whose guests like to avail themselves of restaurants, theaters, drug stores and grocery stores when they’re traveling.”
To create a true pedestrian experience means > that not only must the services be in place, but so must the residential. Park West Village, CASTO’s mixed-use project in Morrisville, N.C., answers a significant demand for on-site residential with 250 Phase II multi-family units being layered onto the 375,000-sq.-ft. Phase I retail component. Located on 100 acres near Raleigh, Park West Village includes a town center district, a community center, and a strong entertainment component with restaurants and a 54,000-sq.-ft., state-of-the-art movie theater. The future residential, with office and hospitality, creates the full-scale pedestrian experience.
“It offers several choices in one venue, and offers convenience for the customer,” Hutchens said.
Trend #3: Upping the entertainment ante
“It’s no longer enough just to add an apartment building or a hotel,” said Andy Silberfein, senior VP at Forest City Ratner Cos., New York City. “Tenants want to know that a project will become part of their customers’ daily lives, and that means having dining, entertainment and services, as well as stores.”
Entertainment is a key driver of mixed-use traffic, and savvy retailers know it. Site-selection decisions are becoming more and more weighted on the entertainment uses offered.
“It means having uses that peak at night and during the weekday, as well as on a Saturday afternoon,” Silberfein said. “Over the coming years, projects that look and feel the most like a real downtown — not just a mall — are going to be the ones that thrive. And we’re finding that the most sophisticated retailers are already heading in this direction.”
Forest City’s mixed-use project in Yonkers, N.Y. — Westchester’s Ridge Hill — delivers the entertainment experience that Silberfein described. The 1.3 million-sq.-ft. destination features 12 blocks of dining and shopping, including eateries such as Cheesecake Factory, Elevation Burger, Yard House, Brio Tuscan Grille and Texas de Brazil, along with a 12-screen, state-of-the-art Cinema de Lux, which opened on the property in May.
“Customers are hungry for an experience,” Silberfein said. “An exceptional mixed-use project becomes part of its customers’ lives. It brings them back every week, because it’s an exciting and fun place to be. It’s not easy or cheap to do these projects well, especially in the most affluent and desirable markets.
“But the best mixed-use projects will be the industry’s new fortress malls. They are the places customers want to be, and that will pull the best retail along with them.”