Shopping Center Business

SEP 2018

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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WILMINGTON 74 • SHOPPING CENTER BUSINESS • September 2018 able, bookended by two anchors and that is what makes it really cool. We're working with the Delaware Law School Widener University, who is contemplat- ing or exploring options, to move from a suburban campus to downtown. They're seeing all of the development going on with the arts, entertainment, restaurants and retail. ZEIGLER : I believe that Christina Cross- ing is the largest assemblage of retail in downtown Wilmington. We're long term players here. We're a REIT, so we're nat- urally a long-term holder of real estate. We want to morph Christina Crossing into where downtown Wilmington is go- ing and evolve it so that there is this tran- sition as downtown Wilmington contin- ues to grow. We want it to eventually become that other bookend that goes all the way down to the downtown area, to the Amtrak station. That I-95 corridor is critical to us. Everything that we own is from Washington to New York. FLYNN : The Acela is now stopping every 30 minutes. It's an incredible addition and an easy way for people to get here. Join it in Center City Philadelphia, and arrive here in 20 minutes. LARS KERSTAN : One of the first points that Robin made is the size of Christina Crossing and the scale of the property. The scale of the property allows us to be flexible to accommodate those tenants. These are tenants that we do deals with every day, and we have the ability to give them the loading and dimensions they want and we can do it right now. We pur- chased this property about 18 months ago. I would say that the property was tenanted with some more down-middle retail, and we are executing on what I call an up-merchandising. The popula- tion who lives here deserves good, cool retail, and that is evidenced by what is going on in the core. If something like a Target comes here, it's a layup for them to go to a REIT that can easily accommo- date them. As examples, we're doing a boutique pet store, a new Mediterranean restaurant and we have another deal out there with large health system to do an urgent care-style facility. The fact that the center is on the riverfront, there's a lot of opportunity there. ZEIGLER : One of the things we've seen — and not just in Wilmington — is mar- rying the merchandising challenge be- tween the current demographics and where the demographics are going. It's not necessarily an easy calculus because where your household incomes may be today and what that demographic wants and needs today and what they may want in five, 10 or 15 years could be different. When you are dealing with a mix of local, national, regional tenants who are sign- ing five, 10, 15 year leases with four or five year options is a challenge because those things may not always be in perfect correlation with each other. Every use that you may want for that future mer- chandising may not directly correlate with the household incomes and demos that you're looking at today. That's why at Christina Crossing, in particular, there are five deals that come across Lars' [Ker- stan] desk today, and we may do one of them. We could do all five, and we may strategically decide we're only doing one because the other four fit the demo to- day but won't tomorrow. SCB : Would you tell us about The Mill and how it has allowed for innovation and development? ROB HERRERA : I was here for about a year and a half watching what was hap- pening in Wilmington. The Mill is built on the premise that it is easier for a tech company to become a bank than for a bank to become a tech company. I built my whole career with WeWork on trying to predict millennial trends; that was my specialty. The Mill has incubated a num- ber of companies. Five Square Finance went from a guy in his fish bowl like Jer- ry Maguire, to now having 80 employ- ees and is moving out of The Mill into a new location that's 25,000 feet and he's a two-year old company. We have a few others coming through the pipe- line. As we speak today, 50 percent of the American population are now free- lancer. The Mill is meant for the person sitting at their home office wanting to get out and get other context. I would say 60 percent of my 400-person mem- bership base is now freelancers. We're building the second location outside the city. We're going to have five locations in the next few years. We started off in 11,000 square feet and we are in 33,000 square feet in less than two years. SCB : What is missing from the market? KERSTAN : We have a grocery store that knocks the cover off in terms of revenue. To my own detriment I would say that the city may need another grocery store on a higher end if the market dictates that. General merchandise retailing, and as the city continues to develop mixed- use projects, amenity-style retail. Right (left to right) Neal Dangello, Jeffrey Gannett, Randall Shearin, Robin Zeigler and Lars Kerstan.

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