Renewed Retail Opportunities: Innovative
A h tApproaches to Repositioning Retail
Properties as EconomicProperties as Economic Drivers
Wednesday,
October 13
2:45 p.m. – 4:00 p.m.2:45 p.m. 4:00 p.m.
60 h i d h d 12 fIn 60 years, the industry has created 12 types of centers
1. Strip2. Neighbourhood3. Community4 Regional4. Regional5. Super Regional6. Power Center7. Urban Entertainment Center8. Factory Outlets Center9. Lifestyle Center10. The Mills11 S C i C t11. Super Convenience Center12. New Urbanism
2
Net Rents: $USD per SF per annum (2010)
2
M ll b i k ll h h ldMalls are being taken to totally new thresholds
Madinat Al Fahaheel – Fahaheel, City Kuwait
33
Al Mamlaka – Riyadh, KSA
M ll b i k ll h h ldMalls are being taken to totally new thresholds
44
b i llDubai Mall
5
Net Rents: $USD per SF per annum (2010)
5
b i llDubai Mall
6
Net Rents: $USD per SF per annum (2010)
6
b i llDubai Mall
7
Net Rents: $USD per SF per annum (2010)
7
b i llDubai Mall
8
Net Rents: $USD per SF per annum (2010)
8
ll f h iMall of the Emirates
99
ll f h iMall of the Emirates
1010
ll f h i ilMall of the Emirates Luxury Retailers
o Audemans PiguetoBalenciagaoBerluti
oMashreq BankoMichael KorsoMissonioBerluti
oBottega VenetaoBoutique 1oBreguetoBrioni
oMissonioMulberryoNstyleoPaul & JoeoPaul SmithoBrioni
oCanalioCartieroCH Carolina HerreraoD & G
oPaul Smith oSee by ChloeoSephoraoUlysse NardinoULM Urban Male LoungeoD & G
oDiane Von FurstenbergoDioroDior HommeoGaliano
oULM Urban Male LoungeoVersaceoWaroodoY-3oAl HalabioGaliano
oGiorgio ArmanioGuccioLouis VuittonoMarc by Marc Jacobs
o a aboAsha’soBiellaoFouchonoMore Café
11
Net Rents: $USD per SF per annum (2010)
11
oMarc by Marc JacobsoMarkati Palazzo oP.F. Chang’s
oTribes
b kNamba Park
1212
fi ld dWestfield London
1313
fi ld dWestfield London
1414
d l Ch i Sh i C lFundamental Changes in Shopping Centre Development
1 F i l t i d1. From single use to mixed use2. From single purpose to multi purpose3. From inside to outside4. From contemporary to traditional5. From impersonal suburbia to personal urban6. From demographics to psychographics6. From demographics to psychographics7. From formulaic segmentation to hybrid colossus 8. From chore shopping to leisure shopping9 F t d d l t i ll9. From standard lease revenue to miscellaneous
revenue
1515
Each decade brings its own design look
… the 1940’s
Russia
China
Saudi ArabiaIndia
UAE
BrazilPeru
Uruguay
Chile
16
Chile
16
… the 1950’s
Russia
China
Saudi ArabiaIndia
UAE
BrazilPeru
Uruguay
Chile
17
Chile
17
… the 1960’s
Russia
China
Saudi ArabiaIndia
UAE
BrazilPeru
Uruguay
Chile
18
Chile
18
… the 1970’s
Russia
China
Saudi ArabiaIndia
UAE
BrazilPeru
Uruguay
Chile
19
Chile
19
… the 1980’s
Russia
China
Saudi ArabiaIndia
UAE
BrazilPeru
Uruguay
Chile
20
Chile
20
… the 1990’s
Russia
China
Saudi ArabiaIndia
UAE
BrazilPeru
Uruguay
Chile
21
Chile
21
… the 2000’s
Russia
China
Saudi ArabiaIndia
UAE
BrazilPeru
Uruguay
Chile
22
Chile
22
RENEWED RETAIL OPPORTUNITIESInnovative Approaches to Repositioning Retail
Properties as Economic Drivers
Tommy Miller, President
The Opportunity – Existing Stock(Excluding Community & Power Centers)g y
Regional Malls• 1,100 – 1,200 total (61% Public)• 717 (65%) considered “weak” or “transitional” (41% public)(41% public)• Only 35% have a “strong” outlook• 212 (19%) are transitional – best opportunity for renewal (66% public)• 200 – 300 of the 505 weak malls could disappear in the coming years (70% private owners)
Lifestyle/HybridLifestyle/Hybrid• 438 total (approximately 27% public)• 131 or at least 30% are estimated to underperform
Challenges/Opportunities
• City/Community Engagement – Your project can change the aspirations of a community; seek partnership
• Optimize Merchandising & Programming – Challenge conventional Optimize Merchandising & Programming Challenge conventional models; incorporate food as “Anchor”; seek broad appeal
• Cost Effectively and Efficiently Utilize the Physical Plant – Structural, energy efficiency, parkinggy y p g
• Seek “Win‐Win” with Anchors – Secure anchor & operating reinvestment/expansion commitments and necessary approvals
• Remerchandise Vacated Anchor Spaces – Create valuable adjacent shop space
• Cost Efficient, Contemporary Design and Placemaking – look forward, not to the pastO t W ll D i d Aft th R ti U d t d th t t il • Operate Well During and After the Renovation – Understand that retailers typically cannot afford to close their stores and need to drive sales during the transition (build excitement – “Coming soon….”)
Build a high performance economic engine that maximizes sales productivity – not necessarily the Taj Mahal.
to
A Transformation
Padre Staples to La PalmeraFrom $420 to $550 PSF4 55
• Solid performing mall under siege from a planned competitive development
• Deficient physical plant• Deficient physical plant
• Public/Private Partnership
• $50 Million renovation
• New leisure destination that expanded the trade area – appealing to tourists and international area appealing to tourists and international visitors and stops leakage to San Antonio
• Elevated the aspirations of the community
Before
New Brand & Exterior Signage
BIG MOVES – LA PALMERA
Before
Dillard’s Renovates ‐Macy’s Expands & Renovates
Before
New Contemporary Outdoor Lifestyle Entrance
Before
Palm Court (Food Court Entrance)
Before
New Food Court
Before
New Center Court
Aquarium
CAROUSEL REMOVED FROM CENTER COURT
New Children’s Play Area
Villa Linda Malltoto
to
Back to Life – The New Southside
Santa Fe Place to Las RamblasTransform $234 PSF Dying Mall into a Revitalized Price‐Mixed Hybrid
• Distressed enclosed mall on a downward spiral that lost its relevancy in the community
34 y g y
community
• Strong but complex trade area with unique cultural profile and tourism‐based economyy
• Supply constrained market with critical mass around the mall
• Polarized retail market – High End (Plaza) and discounters with no “middle”
• $30‐36 Million renovation planned3 3 p
• New, contemporary “Southside” shopping destination with a diverse range of price points and food offerings – a venue tailored to the unique Santa Fe market
BIG MOVES – LAS RAMBLAS
N O td Lif t l E tNew Outdoor Lifestyle Entrance
Remerchandised Entrance #2
Renovated Food Court
d ll dNew Grand Dillard Court
Westland, MichiganDetroit Metro Area
Westland CenterIncrementally Improve Performance from $264 to $300 PSF Plus
with Sensible Renovation
• Dated but active enclosed mall in economically depressed Detroit Metro Area
with Sensible Renovation
• Mall is the social “center "of a stable community
• $3‐6 Million renovation planned to improve signage, entrances, common areas and RMU/kiosk program
• Strengthen community connection, increase traffic and raise profile of mall in a prudent way that demonstrates Landlord commitment
Update Exterior Signage
Renovate Entrances
Re‐Program Common Areas
Santa Monica Place Urban Land Institute
October 13, 2010
Site
THIRD STREET PROMENADE
SANTA MONICA PLACE
SANTA MONICA PIER
2
Third Street – Early Days
3
Third Street – 1960’s
4
Third Street Mall
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Third Street Promenade
6
Original Santa Monica Place
What was wrong with S M i Pl ?Santa Monica Place?
Enclosed environment
Inward facing
Not pedestrian oriented
1990’s
Macerich acquired SMP 1999
Macerich HQ 35 years in SMMacerich HQ 35 years in SM
Santa Monica Place is flagship
1980’s
7
1980’s
Entitled Master Plan560,000 sf Retail,
100,000 sf Office
450 Residential units450 Residential units
8
Mixed Use Plan 2004 Mixed use planp
Demo mall, anchors and parking
Build 2 levels of underground parking
Build retail, office and residential
Residential buildings at 300’
9
Community OutreachCommunity Outreachy
Community workshops, phone surveys, postcard surveys, website.
6 K t6 Key requests
Build something of reasonable scale
Create a better connection with Third Street Promenade
Include open-air, views and street-retail elements
D l i ll d Develop an environmentally sound project
Make retail the primary use
P tt ti t t ffi d ki
10
Pay attention to traffic and parking
New Santa Monica Place
11
Cutting Room Floor
12
Cutting Room Floor
13
Cutting Room Floor
14
Cutting Room Floor
15
Cutting Room Floor
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Design Evolution
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Design Evolution
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Design Evolution
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Design Evolution
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Finally…The New Santa Monica Place
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Center Court
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Fourth Street
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Dining Deck
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SustainabilityProject is environmentally soundj y
Green-building elements
Removing roof over common areas – save 460,000 kwh/year
Adding solar roof over tenant areas
Recycling
Reduce “heat island”
Reduce water usage
Low-emitting materials
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Merchandising
Bloomingdale’sBloomingdale s
Nordstrom
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Merchandising
27
Restaurants
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Parking Façade Improvements (Deck #7)
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Th F tThe Future
Santa Monica
Bloomingdale’sKEY PEDESTRIAN
Colorado Alignment AlternativeSears
oln
ain Sears
EXPO LIGHT RAIL
Place INTERSECTION
City Hall
FuturePark Linco
Ma
City Hall
TERMINUS
4th
RAND RAND
30
Retail remodel that transforms the mall into an urban place.
The NEW Santa Monica Place redefines retail renewal
Where is your favorite Place?
Why?
Belonging
MemoriesExcitementExcitement
Feeling RelaxationThe Feeling RelaxationEmotionalExperience
Love
Experience
Laughter
F ilFamily
ISSUES OF METHODOLOGY
“Enjoyable emotions motivate our lives; they cause us to do things that are by and large good for us. They encourage us to engage in activity that is necessary for the survival of our species…”
D P l Ek P h l i t
Project audience – issue of specific targeted user and how design translates the profile of the user
-- Dr. Paul Ekman- Pyschologist
and how design translates the profile of the user into placeInterpretation of context – integration and connections to promote area wide value creationAuthenticity of big idea – rationale of emotional driven spaces & discovery zonesSustainability – natural experienceCommercial offering – design contribution of soft content to enhance experienceTimeless design – projects to evolve over time
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
AFTER BEFORE
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
RETAIL REPOSITIONING TO CREATE AN URBAN DESTINATION Santa Monica Place | Santa Monica, CA
Retail re-use that attracts people back from a newer, larger upscale competitorupscale competitor.
Fashion Island is a Place people want to be at and stay,
not just shopnot just shop.
RETAIL RE-USE & ADAPTATION TO DELIVER SUCCESS Fashion Island | Newport Beach, CA
South Coast Plaza Mall
Fashion Island
RETAIL RE-USE & ADAPTATION TO DELIVER SUCCESS Fashion Island | Newport Beach, CA
AFTERBEFORE
RETAIL RE-USE & ADAPTATION TO DELIVER SUCCESS Fashion Island | Newport Beach, CA
AFTERBEFORE
RETAIL RE-USE & ADAPTATION TO DELIVER SUCCESS Fashion Island | Newport Beach, CA
RETAIL RE-USE & ADAPTATION TO DELIVER SUCCESS Fashion Island | Newport Beach, CA
Retail Renewal : Creating indoor Creating indoor spaces that feel outdoor and experiential
From Shopping Centersto New Town Centersto New Town Centers
Steiner + AssociatesColumbus OhioColumbus, Ohio
With the continual evolution of theWith the continual evolution of theretail landscape, there are existingB and C malls that do not fulfill theB and C malls that do not fulfill thehighest and best use of the land on
hi h th itwhich they sit.
Why redevelop?___________________________________
•Communities (the need for a “soul” and a “main street”)( )
•Municipalities (the need a healthy tax base)
•Department stores (to maintain/recapture market share)•Department stores (to maintain/recapture market share)
Redevelopments into new town centers require a true public/private partnershiprequire a true public/private partnership___________________________________
•Political
•Planning and Zoning
•Financial
What are the challenges to redeveloping ll i t t t ? malls into new town centers?
$$$_____________________________________
•Environmental
•Relocations/buyouts
•Unknown conditions
Location___________________________________
•Market viability
•Access•Access
•Acceptable level of competition
Community___________________________________
Centers located in established residential areas with established living patterns
Land Control___________________________________
•Multiple landowners (department stores/outparcels)
•Dept store restrictions (REA’s/use)•Dept store restrictions (REAs/use)
•Tenant relocations/buyouts
Perception of asset____________________________________________
•Reposition/Rebrand
•Carefully consider how much of the existingCarefully consider how much of the existing center is retained vs. razed
Examples of Redevelopments by
Steiner + Associates
Bayshore Town Center
Glendale, WI
November 2006November 2006
Bayshore Town Center
Bayshore Town Center
Bayshore Town Center
Bayshore Town Center
Bayshore Town Center
Peninsula Town Center
Hampton, VA
Spring 2010Spring 2010
Peninsula Town Center
Peninsula Town Center
Peninsula Town Center
Peninsula Town Center
Peninsula Town Center
Westminster Mall
Westminster, CO
Westminster Mall
Ralph Ireland, Senior VP Development
Steiner + AssociatesSteiner + AssociatesColumbus, Ohio