Despite the recession—or because of it—mixed-use sites get a new look (3/5)
Mar 5, 2009 3:20 PM, By Arthur Zaczkiewicz
Bigger is better
Barry Rosenberg, president of Columbus, Ohio–based Steiner + Associates, has a different take on the mixed-use market. In the current shakeout, retailers are gravitating to larger projects, regardless of whether they are mixed-use or not, rather than smaller centers. He says retailers are looking to be part of large clusters of retailers—projects that contain 800,000 square feet or more.
“The 100,000- to 200,000-square-foot open-air center—unless it is an extremely strong in-fill site—is not working,” Rosenberg says. “Retailers want to be a part of well-anchored 800,000- to 1,000,000-square-foot retail centers. As for the office and residential within our mixed-used projects, we are having strong success with both of these components. Clearly people want to live and work as part of these mixed-use developments and this part of our centers continues to be very strong.”
Consumers are being drawn to dense developments in this climate. They are reducing shopping trips. They also want convenience and to “shop local,” as Drew puts it. As a result, mixed-use centers that offer this mix are performing better today. Further, retail environments that are sustainable and create a sense of community—places that consumers have formed some kind of connection with—are faring better. And city planners, for their part, see mixed-use as a good fit for higher-density, pedestrian- and public transportation–friendly development, Drew says.
“Consequently, mixed-use projects are very attractive to both seniors and young families with children,” Halle says. Children can walk to school, music and sports practice, and seniors can go to the bank, hair salon and get groceries without having to get into a car. “Due to the senior and young demographic in these areas there is a need and market for a broad spectrum of medical services. These services continue to expand as the area continues to mature. These factors are resulting in a benefit for these projects.”
That’s why developers remain committed to these projects despite the recent hiccups. John Crossman, president of Orlando-based Crossman & Co., agrees that filling in the retailing component of a mixed-use site has been a challenge of late, but it doesn’t mean it’s impossible. “It is back to basics—cold calling, research, working a ton of hours,” Crossman says.
And ultimately, it just makes more sense given broader demographic trends. Incorporating medical uses, in fact, is more than just a good temporary solution. It also will serve a long-term need as more than 70 million baby boomers continue to age and require greater medical care.
“It goes to the trend of providing easy access to services for the customer,” Crossman says. “What defines the average American consumer is that they are busy. Part of the change of our society from malls to mixed-use is that consumers are busy and want more simple lives.”
Permanent shift?
Some analysts see a fundamental and permanent shift in consumer spending habits as a direct result of the recession. So, for certain retailers, settling into a mixed-use site can be beneficial. The failure of national brands like Circuit City and Linens n’ Things reveal the oversupply of mass-produced items in the marketplace, Halle argues. “As these anchors fail, so will the retail centers they are in and so will the smaller stores who depended on them for traffic,” he says. But because mixed-use isn’t reliant on single large tenants as anchors, such properties could be more sustainable over the long run and not succeed or fail based on the fortunes of a single retailer. This ability to diversify and adjust to changing market demands will be important for success and something a mixed-use development has to offer.
From a design perspective, architects are looking back at pre–World War II era communities for inspiration. Neil Kuhns, director of design at MCG Architecture’s Irvine, Calif., office, says the popularity of mixed-use centers represents a return to a “more livable model for community planning and lifestyle.”
“What we call ‘mixed-use’ was the way that everybody lived until master-planned, use-segregated communities became popular,” Kuhns says. As a result, the way developers and architects should approach projects should reflect the ambiance, sense of community and sense of place offered by more established communities. “The difference is that the newer projects must be designed to accommodate a larger, more diverse population,” he says.
Ease of use, convenience and safety offered by enclosed malls isn’t what shoppers are after any longer. Instead, design should be appropriate to the region and needs of the project.
The uncertainty surrounding the economy makes it hard to know for sure how mixed-use centers will evolve. Analysts and economists see a slow recovery, perhaps beginning later on this year—at the earliest.
Nevertheless, sociologists see people yearning for community and working toward building stronger ones via gardens and creating civic groups. “The interest in mixed-use will naturally grow with the changing economic and psychological needs of our society, including a renewed need for a sense of community,” Kuhns says.
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