Retailers and developers must be ‘all in’ on brick-and-mortar success
Cultivating today’s most successful open-air retail environments – those destinations that generate high traffic, engage consumers, and encourage longer shopping visits – takes an “all in” approach from retail space users, leasing and management specialists, and landlords.
And working together we are making great things happen.
Savvy shopping center tenants, whether traditional retail, entertainment, fitness, dining, healthcare or service concepts, among others, are continually adapting to shifts in consumer behavior and industry dynamics. They know customer service and convenience are key, and social experiences are again a priority. This has contributed to retail’s positive trajectory, with store openings outpacing closures for three consecutive years – and counting.
Strategy is equally important for creating enviable tenant mixes. Third-party commercial real estate service providers like Levin Management Corporation (LMC) are blending new tools with traditional approaches. Our team is actively leveraging seven decades of experience with real-time data through a partnership with Placer.ai. This enables us to harness the power of AI to gain crucial insights into market trends and consumer patterns, and create laser-focused tenanting tactics. Retailers, too, are using Placer.ai to better understand the market and their performance.
Finally, in today’s climate, property owners are capitalizing on leasing velocity– particularly within the open-air sector--to position assets for sustained performance. This translates to a busy time for integrated third-party services providers that are in tune with markets and consumer shifts, have relationships with today’s most desirable retail brands, and approach property operations with a long-term view.
Retenanting success – proof is in the data
Within our leasing and management portfolio, Mayfair Shopping Center in Commack, N.Y., provides a great illustration of a strategic, long-term re-tenanting initiative. A right-sizing requirement by Lidl following its acquisition of the property’s long-time anchor supermarket, and a flurry of store closures resulting from COVID-19 shutdowns, created a prime opportunity for transformation at the 222,000-sq.-ft. Long Island property.
Flash forward 36 months, and 112,000 sq. ft. in new leasing includes Lidl’s in- center relocation to a smaller, free-standing building, and the addition of PGA Tour Superstore, Planet Fitness, Sephora, and a host of dining, fitness, and specialty retailers. Mayfair Shopping Center drew 2.1 million visitors in 2023, according to Placer.ai data – an all-time high and a 19% year-over-year increase.
Reinvestment for a bright future
Strong leasing and decreased vacancies at well-located shopping centers justify property reinvestment. The LMC construction management team’s stepped-up activity shows that landlords are doing just that.
In 2023, we launched a major redevelopment at Blue Star Shopping Center in Watchung, N.J., catalyzed by an in-center relocation and a new 72,000-sq.-ft. LMC-arranged lease with long-time tenant ShopRite. We secured land use approvals for this ambitious project and are spearheading a center-wide modernization. When ShopRite moves to its new space, we will reconfigure the existing store for multiple new tenants.
At West Orange Plaza in West Orange, N.J., a 211,500-sq.-ft. Target lease also propelled recently launched, center-wide renovations. A physical plant expansion/modernization will accommodate Target’s omnichannel requirements, and approximately 14,000 sq. ft. of ground-up construction is adding two new retail buildings. Later phases may include a third new building, and others will be modified and expanded.
The all-in advantage
The bottom line is today’s brick-and-mortar success stories involve properties that go beyond serving as places to shop for traditional goods and services to become diversified, one-stop sites where consumers can also pick up their online orders, come together for meals, fitness and fun, and patronize health, wellness and personal care services.
Approaching the future of brick-and-mortar retail will always require agility and foresight. When space users, real estate services providers, and owners are in it together, the future is bright indeed.