renewed retail opportunities innovative approaches to repositioning retail properties as economic...

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


5

b i llDubai Mall

6


6

b i llDubai Mall

7


7

b i llDubai Mall

8


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


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

5

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

16

Design Evolution

17

Design Evolution

18

Design Evolution

19

Design Evolution

20

Finally…The New Santa Monica Place

21

Center Court

22

Fourth Street

23

Dining Deck

24

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

25

Merchandising

Bloomingdale’sBloomingdale s

Nordstrom

26

Merchandising

27

Restaurants

28

Parking Façade Improvements (Deck #7)

29

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?

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


AFTER BEFORE

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

AFTERBEFORE


AFTERBEFORE

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

Peninsula Town Center

Hampton, VA

Spring 2010Spring 2010

Peninsula Town Center

Westminster Mall

Westminster, CO

Westminster Mall

Ralph Ireland, Senior VP Development

Steiner + AssociatesSteiner + AssociatesColumbus, Ohio

renewed retail opportunities innovative approaches to repositioning retail properties as economic...

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