Open & Mixed

Open & Mixed

Retail Trends by Dave Szymanski | Tampa Bay Editor

As consumers embraced the open-air, mixed-use centers, retailers have found them more profitable than the enclosed malls.

The Grove shopping center in Wesley Chapel is a retail, restaurant and entertainment complex with 800,000 square feet of retail space to be occupied by more than 90 retailers as well as 300 residential units.

The 500-acre Cypress Creek Town Center in Land O' Lakes will feature two hotels with 350 rooms each, 860 homes, 540,000 square feet of offices and 43,821 square feet of restaurants.

In downtown Sarasota, the $200-million Pineapple Square project includes 275 residences, as many as 40 stores and restaurants and a 13-story mixed-use retail-condominium-parking structure that stretches over more than a city block.

Mixed-use, open-air developments have become the dominating trend throughout Florida as communities embrace the live-work-shop concept as an alternative to winding streets of single-family developments.

Driving the trend are economics, aesthetics and, as always, government.

"You have people working and living there, and the amount of pollution is limited," said Patrick Berman, senior director of the retail brokerage at Cushman & Wakefield in Tampa. "It's better for the environment. Instead of a 40-minute drive, you can walk to work."

"We are definitely seeing more mixed-use projects," said David Conn, senior vice president with CB Richard Ellis, a Tampa real estate brokerage. "It affects lifestyles. People want to live, work and play in the same area. Developers have found that it's good for a project to have different components: to have restaurants and theaters, condos on top of retail. The cookie-cutter development doesn't work everywhere."

Local policymakers are embracing the mixed-use projects to reduce the need for infrastructure. "Pasco (County) is famous for it," says Berman. "The county likes an employment component with a project. It wants the sales and tax revenue."

The trend makes sense in the Tampa Bay area because unlike the Northeast, the region lacks mass transit.

Steve Wathen, chief executive officer of Equity, the Columbus, Ohio, company building the mall on Big Bend Road in south Hillsborough, sees the mixed-use developments as a correction to earlier-era planning. "Zoning went awry after World War II," Wathen says. "There were big blocks of retail, then office, then residential. It was not as wise for land use."

Wathen's project will include two hotels, 500,000 square feet of offices as well as 1 million square feet of stores. It plans to open in June 2009.

And like most new major retail developments these days, Wathen's project will be open air. None of the shopping centers or malls planned or in construction in Florida is enclosed. In fact, developers and brokers don't call them malls anymore. They're power centers, lifestyle centers or hybrids.

And as it turns out, developers are finding open-air centers to be safer for shoppers and less expensive and more efficient than enclosed facilities.

"JCPenney said it wasn't as efficient as it could be," Roberts says. "It needed to look at what competitors such as Belk, Kohl's and Beall's were doing. That's what brought them out of malls."

Shoppers are also driving this trend," Conn says.

"Retail has changed," he says. "Now families are going to shop at Target. They go to Bed, Bath & Beyond for linens. They go to Sports Authority for sporting goods. They go to Home Deport for home improvement things. These are all open-air environments."

Says Wathen: "When you get down to it, it's what consumers want."

And the open-air centers make sense for retailers, as well. "Sales are fairly comparable," Conn says. "Rents are less, expenses are less, volumes are comparable, and stores are more profitable."

REVIEW SUMMARY

Industry: Retail development

Trend: The open-air architecture

Key: Responding to changes in the market to satisfy shoppers