Everything’s Coming Up Lifestyle

As retail developers ponder the next wave of lifestyle shopping centers, the original concept is morphing into hybrid lifestyle-power centers, mixed-use developments with lifestyle centers, daily-needs lifestyle centers and combinations of all of the above.

Across the country, developers are changing, adjusting and refining the lifestyle concept to fit different market opportunities and site capabilities.

Hybrids emerge: Cleveland-based Developers Diversified Realty entered the lifestyle business four years ago with the acquisition of Paseo Colorado in Pasadena, Calif. Since then, the company has purchased three more centers. Two more lifestyle operations will arrive when Developers Diversified closes its acquisition of Oak Brook, Ill.-based Inland Retail Real Estate Trust later this year.

Currently, the firm’s pipeline contains six new lifestyle centers, including some hybrids.

What’s a hybrid? “I think hybrids are what you will see in the future,” said Marc Hays, senior VP of easing, specialty centers, Developers Diversified. “We’re about to open one in San Antonio, called the Village at Stone Oak.”

Stone Oak spans 500,000 sq. ft., with 325,000 sq. ft. given over to power-center stores and 175,000 sq. ft. in a Main Street lifestyle format.

Power anchors at Stone Oak include Super Target, Hobby Lobby, Cost Plus World Market and DSW. Lifestyle tenants include Talbots, Chico’s, Coldwater Creek, J. Jill, Starbucks, Jos. A. Bank and Ann Taylor Loft.

“Not that opportunities for pure lifestyle projects don’t still exist—they do,” continued Hays. “But developers today need to lease to tenants that provide enough critical mass to bring customers back for more visits than they have in the past.”

Lifestyle leads to community: New York City’s New Plan Excel Realty Trust has developed twist on the hybrid concept. It is converting community centers to hybrids by adding lifestyle retailers.

In fact, New Plan recently created a position called head of lifestyle leasing. “The concept is to add lifestyle elements and tenants to community centers with appropriate demographics and anchors in place,” said Mike Carroll, executive VP of real estate operations for the firm.

Roosevelt Mall in Philadelphia illustrates New Plan’s concept. Despite its name, Roosevelt Mall is an unenclosed, outdoor community center anchored by a Macy’s. “We have added some soft-goods retail here,” Carroll said. “We’ve brought in a Deb Shop, Foot Locker and Foot Action, and we’re planning to add others.”

At New Plan’s Hillcrest Shopping Center in Spartanburg, S.C., the community center line-up includes Ross, Publix, Petco, Panera Bread and Marshalls. “A wing of this center offers lifestyle opportunities,” Carroll said. “We’ve signed Chico’s as our lead tenant in that wing.”

According to Carroll, New Plan no longer pigeonholes centers with terms such as “community” and “lifestyle” center. “These are our shopping centers, and, when appropriate, we’re changing the way we merchandise them,” he said.

Lending lifestyle to mixed-use: The Forest City Commercial Group in Cleveland has five lifestyle projects under development in the eastern United States. Each is part of a larger mixed-use development with distinctive architecture, landscaping and amenities.

The Village at Gulfstream Park in Hallandale Beach, Fla., for example, will include retail, office, restaurants and a casino, which takes advantage of the development’s location next to a racetrack.

Architectural styles play a key role in mixed-use projects. Gulfstream Park, for instance, will feature a Mediterranean style, while the Promenade Bolingbrook, near Chicago, will employ a Prairie style.

“Landscaping and amenities are important, too,” said Mark Bulmash, senior VP, East Coast development, Forest City. “One of the drawbacks to older open-air centers was that the designers didn’t pay enough attention to landscaping as a way to create context for retail.”

At The Summit Lehigh Valley in Bethlehem, Pa., the architectural theme salutes the region’s industrial past. Amenities include landscaped gathering areas oriented toward a picturesque local mountain range.

Forest City also uses public space in its projects. Victoria Gardens in Rancho Cucamonga, Calif., boasts a public library, an auditorium and a community meeting area. “You can create a retail center or a community,” Bulmash said. “A community reinforces activities like retail and gives projects vibrancy and long life.”

Lifestyles’ daily routine: Developers Realty Corp. in West Hartford, Conn., has five lifestyle-center projects in its pipeline, in Palm Coast, Deltona, and St. Augustine, Fla.; Plano, Texas; and Williamsburg, Va. All are mixed-use with retail, residential, hotel, office, restaurant and entertainment components.

Developers Realty leasing strategies include seeking retailers capable of becoming part of a customer’s daily routine. “We think you can build a successful lifestyle community around customers’ routines,” said David Dumeer, VP, Developers Realty.

“Within these mixed-use communities, residents can also attend church, go to the health club, take in a viewing at an art gallery, eat dinner and socialize, all within walking distance of their homes or offices,” said Dumeer.

In Plano, Texas, for example, Developers Realty is building a 1.2 million-sq.-ft. mixed-use community. The 600,000-sq.-ft. retail component will include high-end junior anchors, fashion tenants, restaurants and a regional grocery store. Mixed-use elements include a hotel, an office complex and residences. “Even though the surrounding market contains over 5 million sq. ft. of retail stores, pre-leasing on this project has been swift and exciting,” said Dumeer.

Another example is New Town Shops on Main in Williamsburg, Va., surrounded by commercial and residential developments and a network of hiking and biking trails. Bonefish Grill, Panera Bread, Opus Chop House, Maggie Moo’s, Ichiban, and a number of other national and local restaurateurs provide varied lunch menus for the area’s 50,000 employees.

High-quality national retail anchors and inline shops, as well as necessary services offered by tailors, travel agencies, banks, doctors, lawyers, luxury spas and other resources, all work together to cement New Town’s role in the area’s daily life.

Many faces of lifestyle: W/S Development Associates has developed a number of projects with variations on the lifestyle-center theme. “Project design depends on the location and the market,” said Brian Sciera, VP of lifestyle centers for the Chestnut Hill, Mass.-based company.

In the Shops At Blackstone Valley in Millbury, Mass., the company mixed power and lifestyle retailers.

But in Hingham, Mass., key power-center tenants had already located in surrounding towns, and a hybrid didn’t make sense.

At Hingham’s Derby Street Shops, Sciera’s team sought out anchors unique to the area, installing Barnes & Noble, a two-level Crate & Barrel, Kohl’s, a two-level REI and the first Whole Foods Market on the south shore of Boston.

They also brought in more than four-dozen national lifestyle retailers including Ann Taylor, Apple, Chico’s, Coldwater Creek, Victoria’s Secret, White House/Black Market and Williams-Sonoma. National restaurant names include Bertucci’s Brick Oven Pizzeria and Panera Bread.

Derby Street’s most interesting leasing strategy aimed at necessities retailers: a bank, barbershop for kids, liquor store, bakery and beauty shop. “If you can get retailers that will bring customers back a couple of times a week, you can become a habit,” Sciera said. “If customers are in the habit of coming to your project for groceries or coffee, they’ll come for jeans and a book.”

In the end, the lifestyle concept has blossomed into something much larger than a shopping center format. It has become a vehicle that has freed developers from the constraints of traditional formats and enabled them to tailor a design to the style, architecture and retail needs of individual communities.