Troubled Malls Finding New Owners And New Life

Author: Brian J. Rogal
Outlet: GlobeSt
Published: February 22, 2018
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Independence Center in Independence, MO, is a classic 1970s-era property.

More developers are finding new opportunities in underutilized malls and empty storefronts with mall retrofits.

“Tearing down these properties often makes less sense than finding new uses appropriate for an era when consumers shop so much online.

“A lot of these projects are at Main and Main streets,” says Najla Kayyem of Pacific Retail Capital Partners, “and great locations don’t go out of style.” Pacific Retail Capital Partners recently decided to step in as the operator of Independence Center, an iconic lifestyle shopping center in Independence, MO, just outside of Kansas City.

“We want people in the area to be proud of their center,” Kayyem says. She echoes the thoughts of many people currently developing or renovating retail centers in that these spaces need to provide experiences “that really create a community environment.”

Can We Create A New Kind Of Downtown In Abandoned Suburban Offices?

Author: Eillie Anzilotti
Outlet: Fast Company
Published: January 16, 2018
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Bell Labs Photo by Peter Dant Photography

Developer Ralph Zucker, of Somerset Development, is turning an iconic single-purpose masterwork by Eero Saarinen into a new kind of Downtown – a “metroburb” – in suburban Holmdel, NJ, one of the country’s wealthiest McMansion enclaves. The abandoned, historic Bell Labs created a huge problem for the town, but also huge opportunities. The project is a prime example of what can be accomplished through suburban sprawl retrofit, though the community is still resistant to full integration of diversified housing options.

“The town of Holmdel searched for buyers, but tenants in need of 2 million square feet of space were now rare; across New Jersey and the rest of America, sprawling suburban corporate complexes were being abandoned at an alarming rate for remote work or more urban headquarters.

When he first brought the plan for the metroburb to a Holmdel town hall, the response Zucker heard was, “Hell no.” People told him this was antithetical to the reason they moved to Holmdel, a sheltered, quiet place to raise their families. They didn’t want anything urban. What changed their minds, Zucker says, was an event he hosted at Bell Labs soon after touring the building in 2009: an open house wherein he projected shops and offices onto the walls of the old laboratory spaces, and hosted a pop-up gelato stand and a bar. The simulation of the space’s potential was so compelling, he says, that one woman smacked her head on a wall, thinking a projected hotel lobby was, in fact, the real thing. Still, though, it took until 2013 for Zucker to receive final approval from Holmdel for the purchase and to have the building rezoned as mixed-use; construction began not long after, and in the intervening years, Holmdel has largely embraced the development.”

Sears had a miserable, miserable Christmas

Author: Chris Isidore
Outlet: CNNMoney
Published: January 10, 2018
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“CEO Eddie Lampert said that its lenders and vendors must have a better outlook about the company’s future… and that negative outlook is putting Sears at a competitive disadvantage.

Lampert again insisted that the company is on course to turn a profit in 2018. But he also ominously warned that the company’s board will “consider all other options to maximize the value of Sears Holdings’ assets” if the company can’t refinance its debt.

Sears (SHLD) closed hundreds of stores last year, leaving it with just over 1,100. Last week it announced plans to close another 103 Kmart and Sears stores by April.”

Consider retrofitting the stores and malls through Sprawl Repair to save jobs, create livable communities and boost the investment returns.

Westfield: Lowy family sells shopping centre empire to French property giant for $32 billion

Author: By Elysse Morgan and business editor Ian Verrender
Outlet: ABC News
Published: December 12, 2017
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The giant retail mall operator, Westfield, is being purchased by French property giant Unibail-Rodamco, to remain resilient in the face of the changing retail market. High-end markets remain their target. Agility and diversity will be key for retailers and their employees who continue to bear the burden of the changing retail climate. Communities that promote mixed-use mall repairs may have a chance to combat the sliding economy.

“The acquisition of Westfield is a natural extension of Unibail-Rodamco’s strategy of concentration, differentiation and innovation. It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States.”

The Lowy family will retain control of Westfield’s retail technology platform, OneMarket, which will be spun off into a new company on the ASX, with Steven Lowy remaining as chairman.

Westfield Corporation runs 45 shopping centres and airport retail precincts in the US, UK and Italy, including the retail space in the new World Trade Centre in New York.

Retailers across the United States are in what appears to be terminal decline as shoppers abandon traditional bricks and mortar while the digital revolution lays waste to traditional shopping.

That, in turn, has begun to harm shopping malls as retailers have struggled to pay rents with many closing down their outlets.

Thousands of mall-based stores have shut their doors across the US this year, including stalwarts such as JC Penney, Macy’s, Sears and K-Mart reducing their physical footprint.

That, in turn, has begun to affect employment. Until as recently as two years ago, shopping malls were providing America with 200,000 extra jobs a year, but that trend has now suddenly reversed.

According to the latest Bureau of Labour Statistics, the retail industry has lost an average of 9,000 jobs a month this year. This time last year, malls provided jobs growth of around 17,000 a month.

Dollar General is opening 900 new stores next year

Author: Nathaniel Meyersohn
Outlet: CNN Money
Published: December 7, 2017
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Contrary to the current Retail Meltdown from excessive retail outlets and online competition, the dollar store model – simplified offerings to meet basic needs, no-frills buildings or service, and continued investment in markets that show good returns – appears to be attractive to low- and high-income shoppers, as well as to investors. They fill a need, especially in more rural markets.

Dollar General is bucking the retail trend.

By the end of the year, more than three in four Americans will live within 5 miles of a Dollar General, the company noted on the call.

Shares of Dollar General (DG) have climbed 25% this year. Dollar Tree (DLTR), its top discount competitor, has risen 38%.

Dollar General has succeeded thanks to its lean business model, said GlobalData Retail analyst Neil Saunders. Its smaller stores sell cheap day-to-day essentials, especially in rural areas where it doesn’t make sense for Walmart or other large retailers to open up shop.

“The company [is] the closest and most convenient general merchant for millions,” said Saunders.

Sales were up 4.3% last quarter at stores that were open a year ago, a sign of retail health. Revenue last quarter ballooned to $5.9 billion — an 11% uptick from last year — in part from hurricane-related spending in Texas and Florida.

More middle income and affluent shoppers are helping lift Dollar General’s overall sales. The expansion, especially in metro areas, will allow it to continue reaching these shoppers, said Saunders.

But lower-income Americans remain the store’s primary customers. The stores attracted shoppers during the economic downturn in 2008 and 2009, and consumers haven’t stopped coming back since, even as the economy has picked up steam.

Developers are offering vacant malls to Amazon in HQ bidding war

Author: Staff
Outlet: The Real Deal
Published: October 8, 2017
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Communities and owners of dying malls are teaming on the bid to attract Amazon’s new headquarters. It’s a smart idea that would be even smarter if some housing was thrown into the mix to create a complete community in the process.

“As Amazon’s deadline for bids on where to build its second headquarters approaches, developers are offering up derelict malls as potential sites.

Pittsburgh’s Parkway Center Mall is exhibit A for the nationwide trend with the owner, Kossman Development, changing up their new plans to rebuild the former mall to suit the needs of Amazon.

The old mall’s 35-acre site would become a 5.4 million-square-foot office space surrounded by bike paths and green spaces with 680,000 square feet of retail spread throughout the would-be office campus. The developer’s president Curtis Kossman submitted the revised plans to the Pittsburgh committee handling the Amazon bid last week.”

Read the original story by The Chicago Tribune’s E.K. Hudson

Sears Was the Amazon of Its Time—Until It Made Preventable Mistakes

Author: Derek Thompson
Outlet: CITYLAB
Published: October 4, 2017
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A customer enters the closing down Sears store is shown in downtown Vancouver.

Derek Thompson’s article for CITYLAB describes the rise and fall of Sears, and a cautionary tale for Amazon. As the retail climate continues to shift, Sears’ properties, along with real estate holdings liberated by Macy’s and others during the retail meltdown, offer prime opportunities for sprawl repair that can lead to complete and walkable communities.

“There are four broad lessons that Amazon can glean from the story of Sears’s decline.

First, retail is in a state of perpetual metamorphosis.
Second, even large technological advantages for retailers are fleeting.
Third, there is no strategic replacement for being obsessed with people and their behavior.
Finally, adding more businesses is not the same as building a better business.

But it’s important for Amazon to stay aggressive about experimenting with new platforms, in case one of today’s underdeveloped technologies—like ordering through AI assistants, delivery-by-drone, or virtual and augmented reality—turns out to be the next big thing that transforms retail, all over again.”

Like retail, it is important to be agile and creative in designing new communities and repairing suburban sprawl to meet the changing needs of Millennials and Baby Boomers.

Discount Grocers Aldi And Lidl Give U.S. Stores A Run For Their Money

Author: Alina Selyukh
Outlet: NPR: All Things Considered
Published: September 27, 2017
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German grocers Aldi and Lidl are aggressively growing their U.S. footprint. Aldi, which aims to have 2,500 stores by 2022, has recently renovated this store (left) in Alexandria, Va. And Lidl’s new location in Manassas, Va., was its 30th in the country.

NPR’s Alina Selyukh describes how German grocers Aldi and Lidl are changing the way Americans shop in both urban and suburban markets. Their compact foot prints and stream-lined service and merchandise fit well in compact, walkable communities, and offer lessons for American retailers in the changing retail climate:

“Both [Aldi and Lidl] stores are known particularly for private-brand, or store-label, products. Jim Hertel, senior vice president at food retail consultancy Inmar Willard Bishop Analytics, says that allows these grocers to offer customers savings of about 35-40 percent compared with other supermarkets. A limited stock goes into these discount stores, which are very compact and value efficiency above frills.

“Typically, in a grocery store you’d often find 25, 26, 27 aisles. In Lidl, what we do here is just six aisles,” says Lidl spokesman Will Harwood. “By the time a customer reaches the end of the first aisle, they’re going to typically be able to do about 80 percent of their shop.”

Hertel says there’s a common misconception that Aldi stores are geared toward low-income shoppers on very limited food budgets. “It’s really a combination,” he says. “Certainly, the extreme value does … appeal to the lower end of the economic scale, but actually the bulk of their sales come from mid- to maybe just above middle-class households.”

The Geography of Innovation

Author: Richard Florida
Outlet: CITYLAB
Published: August 3, 2017
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Richard Florida writes:

A recent study by economists Enrico Berkes of Northwestern University and Ruben Gaetani of the University of Toronto Rotman School cracks the proverbial code on the geography of innovation. They find that while there is actually a greater amount of innovation (as measured by patents) in suburbs, cities produce far more “unconventional innovations,” which require a greater diversity of contributors and have a more disruptive economic impact.

Unconventional patents are more likely to come from smaller companies, university labs, or independent inventors than large, publicly-traded companies. And they are often the harbingers of revolutionary new technologies.

In other words, density plays a much bigger and more important role in the type of innovation than in the rate of innovation.

Large cities not only have deep pools of talent and a critical mass of specialists, they also have the density to forge connections between people and firms with diverse bases of knowledge.

Ultimately, the better way to think about the geography of innovation is not city versus suburb but city and suburb. If cities are the centers for more cutting-edge innovation, the suburbs remain home to the big established companies that require large campuses to house their activities and people, and which tend to engage in a lot of patenting.

It will be interesting to track these trends in the coming years, as big companies seek to urbanize their suburban campuses.

Brainard wants to transform office building parking lots along U.S. 31 into ‘little villages’

Author: Chris Sikich
Outlet: IndyStar
Published: July 27, 2017
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Chris Sikich discusses plans to insert mixed uses, including, residential and retail development similar to Carmel’s downtown, into the state’s second largest commercial hub along US 31.

When Carmel Mayor Jim Brainard looks at the 5-mile stretch of highway, he doesn’t just see multistory corporate headquarters and health care complexes that have been so instrumental in building the city’s financial base. He says there are hundreds of acres of underused land, not just the few tracts of green space on the market, but also the seas of parking lots that serve the buildings.

“It’s such a waste of space, these big suburban parking lots, which don’t look very nice,” Brainard said. “I anticipate some day there will be little villages around those office towers.”

The mayor is proposing to provide millions in taxpayer incentives for property owners and developers to build restaurants, shops, apartments and condos with parking garages along U.S. 31

As Carmel has developed its urban core, several high-profile corporations have fled the U.S. 31 corridor for the more walkable environment being created in the city’s downtown area.

“The market is changing,” Brainard said. “People don’t want to get in their cars to drive to lunch anymore. They want to walk someplace close to their office.”

He thinks the highest quality development comes from public-private partnerships. He wants to guide development as he has in Carmel’s urban core. He hopes to offer incentives to encourage the development of shops, restaurants, homes and public spaces. That most likely means using TIF districts to pay back city bonds for parking garages, which in the past have cost from $10 million to $20 million each.

Galina Tachieva: Occupy Wall Street? Occupy the Unoccupied . . . Occupy Sprawl!

Author: Christine McLaren
Outlet: BMW Guggenheim Lab
Published: October 9, 2011
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As thousands cram into the winding streets and public spaces of lower Manhattan in a revolt against the “corporate forces of the world,” Galina Tachieva would really prefer protesters take over an abandoned Walmart parking lot instead.
She’d really prefer we occupy sprawl viagra paypal.
One of my personal heroes, Tachieva is a partner at Duany Plater-Zyberk & Company, Architects and Town Planners (DPZ), Miami, and author of the Sprawl Repair Manual. She specializes in suburban retrofits—revamping automobile-oriented, sprawling regions into more lively, sustainable, and compact communities.