This is a summary of the September 20, 2016 meeting of the ULI Chicago District Council, which gathered at the Riverway Auditorium in Rosemont to hear industry leaders discuss how the rapid shift in retail has prompted owners and developers to create new strategies to maximize the value of well-located, but increasingly underutilized, real estate.
Among other topics, the panel discussed the repositioning and redevelopment of former power centers and malls into multi-family residential, senior housing and smaller footprint retail uses to meet consumer trends.
The moderator for the session was Patrick Kennedy, President, V3 Companies of Illinois, Ltd. Panelists were John Albright, Vice President Development, Starwood Retail Partners; Andy Koglin, President, OKW Architects, Inc.; and Adam Tritt, Vice President Development, General Growth Properties.
In his opening remarks, moderator Patrick Kennedy cited a recent issue of Shopping Centers Today: over the past 1 ½ years, the average quarterly net absorption for shopping centers has been nearly 10 million square feet across the country.
“The death of brick and mortar is a little prematurely announced and assumed,” Kennedy declared. “There are still things going on.”
Panelists delved into many of the elements at play, with John Albright pointing out one fundamental that has endured amidst all the change: a central ingredient in creating success is keeping shoppers around for as long as possible.
“We’re looking for an extended stay,” Albright said. “The longer you keep a customer at the mall, the better opportunities you have for them spending their money with the retailers.”
Toward that end, developers are exploring how to make malls “more of a city center instead of just a retail outlet”—with office buildings, multi-family buildings and senior living facilities all in the equation, said Albright. Some uses, such as multi-family, may not be attached to the mall, but are within walking distance of restaurants and other entertainment venues people seek, he added.
“The one thing that malls and shopping centers generally have in common is they’re well located in the markets, with good access,” Albright continued. “And those factors are important for office buildings in particular.”