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SHOPCORE 140 • SHOPPING CENTER BUSINESS • December 2016 "The amount of health- and beauty-fo- cused tenants that are growing across the country remain at all-time highs," he says. "Specialty grocers are moving out of their historical regions and into new ter- ritory. LA Fitness and Planet Fitness are expanding. Then you've got Orangethe- ory Fitness, cycle studios and tenants of all types that support an active lifestyle. You're seeing these trends emerge as sales trend toward these guys." CHANGING WITH THE TIMES Another trend Petherbridge appreciates is the flexible nature of many historically large, big box retailers. This decrease in square footage means ShopCore can en- tertain a wider variety of tenants in its ur- ban centers. With its focus on population density and necessity-based value, this is a much-appreciated break from tradition, as far as Petherbridge is concerned. "Many retailers that have historically set in exactly one size are now becoming much more flexible in their footprints," he says. "They're laid out to be more ef- ficient. This is an area that excites us as retailers evolve and we see where they're willing to go in markets." Petherbridge points to Target's new smaller-scale format, which is rolling out stores between 20,000 square feet and 60,000 square feet, and to Petco's boutique-style store, Unleashed by Pet- co, which only consists of about 4,000 square feet, as two great examples of re- tailers adapting with the market. These flexible store formats can be particularly useful in vertically integrated centers like ShopCore's The Shops at Skyview Center, a mixed-use shopping center in down- town Flushing, New York. While Shop- Core maintains a wide variety of outdoor centers, weather and spatial constraints can result in multi-level, enclosed malls. Notable tenants at the center include Tar- get, Marshalls, Bed Bath & Beyond, BJ's Wholesale Club, GNC Live Well, and Restoration Hardware and Nike outlets. Weather and space permitting, howev- er, Petherbridge does believe consumers appreciate the atmosphere that comes with open-air retail. "If you really look at the performance at these outdoor centers, we do believe in the value and convenience factor of these retailers," he says. "The retail puck is definitely moving to open-air centers. Even up north and in the Midwest, I still think they work very well. Shoppers tend to gravitate to outdoor centers, and many of the retailers that are growing — Burling- ton, T.J. Maxx, Ulta, Trader Joe's, Whole Foods, fitness tenants — are growing in the outdoor format." Petherbridge knows omnichannel and the social aspect of shopping centers are also areas of growth. He estimates that about 90 percent of ShopCore's tenants are considered internet-resistant, consist- ing of grocers and service-oriented busi- nesses that are hard to replicate online. The company is also taking steps to assist tenants however it can with new technol- ogy and delivery strategies. "We're trying to aid retailers in their omnichannel approach, and over time, that will evolve," he says. "We're seeing more drive-thrus for ease and conve- nience. We're providing parking spaces reserved for in-store pick-up, so custom- ers can order online and quickly grab their item from our stores." ShopCore has also integrated events and programming into its shopping cen- ters whenever applicable and possible. South Park Meadows, a power center in Austin, Texas, now holds concerts and social gatherings, while West Broad Vil- lage in Richmond, Virginia, operates a seasonal ice rink. "We're actively monitoring trends and taking a holistic point of view," Pether- bridge says. "The key to retailers is a focus on high-quality locations and a proven ex- perience. How do you enhance this experi- ence? We're very much focused on how to engage the consumer as much as possible." With little new retail development in the pipeline nationwide, ShopCore is do- ing exactly that: reinvesting its capital in its assets and focusing on the shopping center experience. In addition to the customer, the firm is also focusing on its employees and tenants as it embraces its new identity. Petherbridge says the firm is taking its privileged role as one of the nation's leading retail landlords seriously. "We have such an incredible opportuni- ty to excel and really be one of the best- in-class retail landlords in the country," he says. "I don't say that lightly. It's not something that is going to happen over- night. It's going to take many years. But this group is very good. We have an oppor- tunity to do things a little differently and a little better in some cases. We're very excited about that and we're very excited to have a partner like Blackstone." Petherbridge, too, views his new role with great respect. "I think the Excel portfolio was well put together by the initial management team," he says. "For a small REIT, they did a very good job. Now we have the sponsorship of one of the most pre-eminent private equity firms on the globe. There is an en- trepreneurial spirit within ShopCore and within Blackstone. I plan to take every- thing I've learned at DDR and beyond and apply it to our business. Tenants remain very central to our company. It's the only way I know how to do business." SCB West Broad Village in Richmond, Virginia, is anchored by Whole Foods Market. The property operates a seasonal ice rink, and other integrated events throughout the year.