Part three in a 3-part blog series.
Sophisticated landlords know they can no longer operate as they have in the past. Philosophically, the thought of centers offering traditional retail fare needs to be replaced with the idea of offering consumer experiences. One area is in quasi-medical and office. Fairlane Mall in Dearborn, Michigan, has seen hundreds of Ford Motor Company professionals move in to repurposed retail space in recent months. Significant capital is needed, however, to accomplish such a feat. Several retail projects are considering razing a portion of a struggling center and developing multi-family housing in markets lacking an abundance of apartments. Still others have adapted space to into a wide-range of medical facilities.
Along similar lines, trendy gyms are proving beneficial to landlords via newer concepts such as Orangetheory Fitness, the Barre Code and Daily Method. Swim Schools are also assisting by driving traffic and spurring contiguous sales to retailers and restaurants.
For the traditional retail concepts, staying afloat remains realizing a value proposition – both for their customers and themselves. For landlords, it has never been more vital to really understand their tenants’ business and sales realities and to strike an appropriate balance between playing hardball and working toward long-term, equitable solutions.
Final Thoughts at Checkout
The retail market remains extremely fluid with new realities changing our perceptions every day. Some still cling to timeworn concepts but most know we have passed the point of no return. Today, it is about moving forward with savvy, vision, creativity and a resolve to give consumers what they want, albeit in a different, integrated way.
For retail, the phrase: “Adapt or Die” has never, ever been more apropos.
Matthew Mason is a Managing Director, Conway MacKenzie. Lauren Leach is a Director, Conway MacKenzie. Together they lead the firm’s real estate practice and specialize in distressed real estate; both managing large CMBS portfolios and malls, as well as working directly with retailers.