Redeveloping Retail for the Next Generation
Since their first appearance in the mid-1950s, retail centers have been evolving to meet the existing needs of the consumer. Now, in 2018, malls offer more than just a shopping fix: they are lifestyle destinations combining retail, leisure and dining concepts. Brookfield Properties' EVP of Development and Anchor Leasing, Richard Pesin, shares how the company is repurposing its traditional anchor spaces and retail centers by transforming them into 21st century leisure destinations.
Anchor spaces have traditionally been occupied by department stores, but due to changes in consumer habits and increased desire for a more diversified mix of retailers and concepts, there is no longer a demand for multiple department stores within a mall. This is demonstrated by the reduction in the number of Sears stores at Brookfield Properties' centers. “In 2012 there were 87 Sears in our portfolio,” says Richard Pesin. “Since then, 16 have either been redeveloped or closed, and seven additional stores are known to be closing by the end of 2019. We have redevelopment plans for many Sears stores in the pipeline.”
So, as the number of department stores has fallen, what is taking their place? “It’s a diverse mix across our portfolio. Everything from sporting goods, supermarkets, and entertainment concepts are going in, as well as non-traditional mall tenants such as TJMaxx,” says Pesin.
Careful consideration is now being given to the merchandising mix of retail centers to help them remain relevant. There is now more of a focus on creating a ‘downtown’ environment in retail centers, adding supermarkets and entertainment concepts that will encourage more frequent and longer visits to a property.
The new concepts being introduced to our retail centers are attracting consumers who will use the spaces in different ways. Life Time Athletic and other wellness concepts will bring increased traffic to centers multiple times each week. The inclusion of supermarkets such as Wegmans—which seeks to recreate the feel of European markets with its multiple departments and prepared food—offers a new type of experience that reinvents the traditional shopping space. Even non-retail spaces like WeWork—a shared workspace located at Pioneer Place—create an exciting environment by combining the elements of work and play. These spaces will benefit other tenants as visitors will explore wider offerings at the mall.
International brands also play a role in the redevelopment of anchor spaces. Mexican edutainment brand, Kidzania will open at two Brookfield Properties locations in the next two years, creating destinations that will attract entire families. Hotels are also likely to become a more frequent offering at retail centers, with customers benefitting from the wide range of amenities that will be available at their doorstep.
“We hope that introducing these new concepts to retail centers will create a better awareness of a center’s wider offering and drive more traffic to other stores,” says Pesin. “Grocery and lifestyle concepts add another layer to our offering and are an opportunity to build traffic patterns and bring people to a center on a daily or weekly basis.”
He adds, “In the next 10 years we expect to see more densification and diversification of our properties, especially at those located in the best markets. There will be more offices, more residential, more entertainment and more hotels. And as parking requirements change we’ll be repurposing those areas and developing better parking structures.”
It isn’t just the merchandising mix that is evolving. The retail center environment is also changing with the introduction of inviting dwelling spaces. Gone are the extensive areas that used to dominate retail centers, replaced by welcoming spaces akin to a luxury hotel lobby.
“One of the biggest things being done to affect this change is engaging hospitality rather than traditional retail architects,” says Pesin. “When you’re in a good hotel lobby you know it—you want to hang out there. The architects we’re engaging are trying to create places where people want to dwell and stay. The space inside won’t feel so cavernous and will be more inviting.”
The redevelopment of anchor spaces, and the wider retail centers around them, also offers the opportunity to incorporate sustainable technologies into new spaces. More efficient lighting, heating and cooling systems all contribute to a more pleasant environment for consumers. This encourages customers to remain in a retail center for a longer period of time and provides efficiencies for tenants.
Brookfield Properties' development team knows how to curate options that will appeal to consumers and encourage repeat visits to our retail centers. Get in touch to learn how we can help select the best location for your large-format concept in one of our anchor spaces.