Shopping Center Business

MAY 2015

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

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Page 325 of 342

MAY 2015 • SHOPPING CENTER BUSINESS • 321 Jim Baeck Integrating different types of retail centers into one hybrid destination is an increasingly common development strategy. Bundling Up I n recent years, commercial develop- ers have begun integrating previously distinct categories of retail, combin- ing elements of town center-style projects, power centers and neighborhood grocery- anchored developments as individual components in a larger development. These distinctive project types have all traditionally operated independently, oc- cupying their own unique niche on the re- tail landscape, and this bundling approach both complicates and facilitates the retail and mixed-use development calculus. From development and design dynam- ics, to co-tenancy complications, leasing nuances and management questions, there are a number of issues that can arise when different development types come together as parts of a single desti- nation. While large retail destinations that feature multiple development categories can offer a synergistic appeal that elevates a project's profile, broadens its appeal and drives traffic, they can also be correspond- ingly complex and challenging to execute correctly. Doing so demands a nuanced and sophisticated understanding of the ap- propriate design and development strate- gies to best account for and accommodate that complexity. A confluence of circumstAnces Exploring the challenges and opportu- nities that arise as a result of these new hybrid projects begins with establishing a clear understanding the driving forces behind this trend. The catalysts driving this trend are multifactorial: a combina- tion of long-term structural changes in concert with more recent developments in the marketplace and the industry. The origins of these new hybrid centers actually go back to the first town centers and non-traditionally anchored projects. The popularity of this format contributed to the demise of many traditional malls, and subsequently left more than a few an- chor tenants wondering where to go next. Because traditional department store mall anchors (and many familiar power center tenants) are not necessarily a great fit with specialty retail projects, a new type of retail destination would have significant appeal within this group. The second piece of the puzzle is relat- ed to the way the industry bounced back from the recent recession. In the immedi- Located in Manta, Ecuador, Mall Del Pacifico is a planned mixed-use center featuring 150-room hotel and retail, located near the water.

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