In the face of inflation, longer deal times, a possible coming recession, and predictably unpredictable changes in consumer tastes, making retail work in development and redesign is a challenge. That doesn’t make it any less necessary.
Adrienne Crawford and Lily H. Heimburger with SRS Real Estate Partners have worked with property owners for more than 20 years on the strategic redevelopment and repositioning of assets, as well as merchandising and leasing new developments. Crawford and Heimburger report that owners, operators and developers can create successful projects if they focus on two key points: precise planning and the right priorities in design.
Planning Must Be Smart and Detailed
Supply chain issues remain a significant concern, “not only for goods, but also for construction,” says Heimburger, SVP and principal at SRS. Labor is tight everywhere, from construction to retail staffing, especially in hospitality. “Atlanta’s top restaurants can definitely find and retain talent, but everyone else is still having trouble,” and that can create hesitation to expand.
With financing expensive and construction slow, “deals are taking a lot longer to get done,” according to Crawford, another SRS SVP and principal. A buildout for, say, a restaurant used to run about 180 days. Now it’s 240 and the costs are much higher.
Because the stakes are high, the right details are critical. “Developers are putting a lot more thought into site design, trying to make sure everything makes sense before signing leases,” Crawford says. That includes everything from making developments more pedestrian friendly and adding public spaces for events to thinking through logistics like food delivery pick-up and how a restaurant’s back of house will function.
Looking at the world through tenants’ eyes is also important. “Because of the fear of a recession and high cost of supplies, tenant allowance is winning prospects,” Heimburger says.
Location is always important but not enough by itself. “Having a great location at Main and Main certainly helps,” says Crawford “But you also need a unique tenant mix to make it successful.” Existing projects must constantly adapt to changing tastes.
Design: Eye-Catching, but Also Practical
Many restaurants—and patrons—want the option for outdoor seating. Crawford and Heimburger recommend allowing abundant room for parking (bicycles as well as cars), using breezeways to create foot traffic flow, blending shops so that anchors and 1,800 square-foot tenants share spaces along with entertainment and personal services. Creating a mix of national, regional and hyperlocal brands also helps create extra attraction.
“Make it more of an experience,” Heimburger says. “Include a mural or a living wall or something customers really want to make people remember it. Also make sure you’ve thought about the logistics for the end users: service corridors and dumpsters in the right locations. In a mixed-use project, place grease traps where they can be cleaned regularly.”
In Atlanta, Crawford and Heimburger advised on the redevelopment of The Krog District, a mixed-use collection of restaurants, retail and gathering spaces adjacent to the Atlanta BeltLine Eastside Trail, a 22-mile loop of multi-use trails connecting 45 intown neighborhoods. .
“It’s the only part of the BeltLine that has dual-facing retail,” Heimburger says.
At Atlanta’s Midtown Promenade, another redeveloped retail destination anchored by Trader Joe’s, the owner reconfigured the retail hub to provide direct access to one of the BeltLine’s most trafficked sections. The creation of a breezeway with interior fronting retail spaces completely transformed the project, Crawford says. The shops of Midtown Promenade previously faced away from the BeltLine toward the parking lot. The addition of a new plaza with stairs and landscaping have made the shopping center more inviting and accessible to pedestrians.
Some advanced planning, and best practices, can turn a new or rehabbed retail development into something special, creating a sense of place that is relevant, memorable and one that offers an experience that keeps customers coming back.
Source: “Key Drivers of Successful Urban Retail Redevelopments“
