Western Real Estate Business

MAY 2018

Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.

Issue link: https://westernrealestatebusiness.epubxp.com/i/978056

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Page 1 of 66

O ne thing has become increas- ingly clear as the retail in- dustry continues to evolve: activating street-level retail is para- mount. For many years, the mall ty- pology allowed for multiple levels of credit tenants. This provided diversi- ty and a co-tenancy that was focused mostly on targeting specific demo- graphics of shoppers, rather than cre- ating a vibrant pedestrian experience. This initially drew people to and around the surrounding mall area. The vibrancy of these spaces eventu- ally waned, however, as did the foot traffic. Malls are now being forced to re-invent themselves by creating more interactive and engaging ex- periences to drive shoppers through their doors. Centrally located shops in high-density, alternative retail ven- ues are thriving due to their unique tenant offerings and more "organic" placemaking. Retail will always be around, but the real estate landscape is changing due to the resurgence of street-level retail. This is being driven by three distinct factors: hospitality, reposi- tioning and revitalization. Hospitality Malls have long tried to conjure a "sense of place" to attract consumers. In a normally sterile environment, creating this sense of place where people want to go and come back again is a challenge. It is through hospitality-oriented initiatives that retailers are seeing increased success. One example is the newly activated Westfield Century City in Los An- geles. After investing more than $1 billion, the results witnessed on the ground level of the mall are extraor- dinary. Why? It's become a thought- ful fusion of hospitality and retail, combining a living room aesthetic with hotel lobby comfort. Peter Lowy, co-CEO of Westfield, says it's expe- riential, and he's right. The design of the mall leads people to take the time to sit, stop and engage. Allotting space for these types of activities and interactions at the ground level of the mall increases dwell time, slows down shoppers and keeps them pres- ent. Many other malls around the world are following suit. Activating the ground level by creating an expe- rience focused on hospitality is one A cross the nation, we are still in the growth stage of the cur- rent real estate cycle, especially when it comes to vertical mixed-use projects. It's no secret the City of Los Angeles is experiencing one of the largest development booms in his- tory throughout a number of sub- markets. With dozens of mixed-use projects in the works, developers, architects and brokers are thriving. In order to build successful commercial real estate projects, however, long- term relationships between develop- ers, tenants and commercial brokers must be of the utmost importance. The most successful vertical mixed- use developers in urban markets over the past 20 years have learned just how crucial it is to involve all parties from the project's start. This ensures everyone is on the same page when it comes to the land acquisition, en- titlements, project design and con- struction, continuing through lease- up and, ultimately, the disposition of the property. The bulk of the work in mixed-use development lies in those Credit: Retail Design Collaborative District La Brea, an adaptive re-use development project in Los Angeles, has undergone significant improvements over the last four years, including wood truss ceilings, exposed bricks and steel beams and distinctive, street-level storefronts. THE RISE OF STREET-LEVEL RETAIL Ground-floor retail is often the first interaction a consumer will have with a center. By David Sheldon see RETAIL, page 59 see MIXED-USE, page 60 The four-story Culver Steps development will create an open, pedestrian-friendly urban hub with shopping, dining, and an outdoor venue for movies, concerts and special events. SMART DEALMAKING FOR VERTICAL MIXED-USE PROJECTS It's imperative to have knowledgeable representation on your side before embarking on today's hottest retail-infused projects. By Lee Shapiro San Bernardino county focuses on retail attraction from ecommerce to experiential. page 56 Colorado Market Highlight page 36 page 44 Corporate Real Estate Faces An Agility Test New Mexico Market Highlight page 40 INSIDE THIS ISSUE www.REBusinessOnline.com May 2018 • Volume 15, Issue 9

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