DMagazine: Real Estate Daily Blog
By: Terry Montesi, CEO Trademark Property Co.
We’ve all seen it happen, even in our own community. A once-thriving retail center begins to look a little rough around the edges, a few empty store windows start to pop up, and the parking lot doesn’t seem to be as full as it used to be. The place that was once the hub of neighborhood activity, has lost its spark.
It’s a sign of one of the biggest mistakes a retail center can make: not committing to evolve. We believe retail properties must constantly reinvent themselves to maintain their relevance.
From an investor’s prospective, much opportunity lies in rejuvenating struggling retail properties, but how does one go about reinventing a retail property? Where do you start? What should be changed? What should be added?
Those of us in the business know that the “if you build it, they will come” mindset usually doesn’t stand true when it comes to real estate. Engaging the community and other stakeholders is key to understanding how to unlock the hidden potential in retail and mixed-use properties. After all, these are the people who shop, work, eat, and live at your property and will form the important brand perception.
This collaborative development model is appropriate because one size doesn’t fit all. Retail and mixed-used properties must be custom-tailored to the community and the market, and there are a handful of specific considerations that should be taken into account when determining how to accomplish this.
Consideration 1: What’s in a Name?
A name change or rebrand can be a big hurdle to overcome from a brand recognition standpoint, but the payoff can be substantial: A new name or brand enhances the opportunity to completely redefine the property moving forward. At Hillside Village, formerly Uptown Village at Cedar Hill, our research showed that “Village” resonated with customers, but “Uptown” was confusing to the broader trade area.
To combat this confusion, while maintaining the community connection, we decided to rename the project Hillside Village, utilizing “Hillside” as an homage to the area’s topography.
Conversely, a name change can do more harm than good, so research is important.
Consideration 2: Evaluating Tenant Mix
If the center is experiencing vacancy, there’s usually a reason. Perhaps the market has changed, or maybe the original merchandising missed the mark. Use market research to understand the demographics and the community to tell you where they want to shop and then decide how to remerchandise. At Hillside Village, we heard customers calling for fashion forward tenants at an affordable price point. Our leasing team went to work, and as a result, H&M and Charlotte Russe will open at the property in this fall.
Consideration 3: Creating an Experience
As part of Trademark’s “Conscious Place” initiative, we strive to create spaces that educate, inspire, and engage stakeholders. We accomplish this through unique-to-each-location attributes such as public art, environmentally-friendly initiatives, educational opportunities, inspirational quotes, events, interesting public spaces, a strategic leasing plan, and a commitment to the local and artisan, and entrepreneurs.
At Watter’s Creek, for example, we’re implementing evolutionary techniques at a property that is less than a decade old. We’ve added public art, fountains, green space, a book-sharing program for children, a car-charging station, and a water bottle-refill station, all with the goal of ensuring that the property stays relevant amongst newer competitors.
Consideration 4: The Physical Environment
Look around! Is the built environment inhibiting the property’s success? Simple changes like façade changes or upgrades, added amenities, public space re-designs, and other updates can make a big difference in customer experience.
At the Shops at Highland Village, we’ve just broken ground on a multi-million dollar renovation that features enhanced common area and public space improvements, upgraded landscaping, new amenities for adults and children, updated façades, public art, and new signage throughout the property. One of the main elements of this plan is demolition of a passive public space (an existing obelisk and fountain) in the center of the property to make way for an active central common area featuring a bocce ball court, community promotion shed, outdoor fireplace, shaded seating and more. In addition, we are enhancing access and adding shaded seating as well as other amenities to a second existing public space anchored by a pop-up fountain.
Victory Park is another great example of how design can impact performance. The development’s original design was closed off, cold, sterile, and unfinished. After a series of design charrettes and intense community engagement, Trademark put together a list of five initiatives to guide redevelopment. Already, we’ve added a new signalized intersection and crosswalk at Olive Street and Victory Park Lane, and, on Victory Park Lane, we’ve removed existing medians, widened sidewalks to accommodate large outdoor patios, installed new trees and pot corrals, added raised mid-block crosswalks, and put in place making elements like planters, benches and light poles with banners.
Next up, we’re installing new directories, seating and landscaping and implementing a public art program. In addition, Houston Street and Victory Avenue will be converted to two-way traffic with dedicated bike lanes on Houston Street and shared bike lanes on Victory Avenue by the end of 2015.
We’ve have already seen exciting results from a leasing standpoint: Cinépolis USA, a new anchor tenant, will open an eight-screen, 700-seat theatre, and many more merchant announcements are soon to come.
When it comes to reinventing retail, the above considerations are universal. It’s important to engage customers and stakeholders, and combine that information with place-making experience to help properties continually evolve and grow—a strategy we believe ensures long-term success.