Property Redevelopment and Repositioning
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5/17/2016 REINVENTION: Property Redevelopment and Repositioning Yaromir Steiner Steiner + Associates RECon – Las Vegas 22 May 2016 Presenter Yaromir Steiner, CRX - Past Trustee, ICSC - CEO, Steiner + Associates, Columbus, OH Presenter • Born in Istanbul, Turkey • Educated in Toulouse, France • Experience in the U.S. – Houston, New York, Miami, and Columbus, OH 2. Toulouse, France 4. New York, NY 6. Columbus, OH 1. Istanbul, Turkey 3. Houston, TX 5. Miami, FL 1 5/17/2016 Project Experience CocoWalk, Miami, FL Centro Ybor, Tampa, FL Newport on the Levee, Newport, KY Newport Aquarium, Newport, KY Adventure Aquarium, Camden, NJ Easton Town Center, Columbus, OH Easton Gateway, Columbus, OH The Greene, Beavercreek, OH Bayshore Town Center, Glendale, WI Peninsula Town Center, Hampton, VA Zona Rosa, Kansas City, MO Liberty Center, North Cincinnati, OH In Summary: 5 Urban Infill Projects CocoWalk, Miami, FL Centro Ybor, Tampa, FL Newport on the Levee, Newport, KY Newport Aquarium, Newport, KY Adventure Aquarium, Camden, NJ Easton Town Center, Columbus, OH Easton Gateway, Columbus, OH The Greene, Beavercreek, OH Bayshore Town Center, Glendale, WI Peninsula Town Center, Hampton, VA Zona Rosa, Kansas City, MO Liberty Center, North Cincinnati, OH In Summary: 2 Redevelopment Projects CocoWalk, Miami, FL Centro Ybor, Tampa, FL Newport on the Levee, Newport, KY Newport Aquarium, Newport, KY Adventure Aquarium, Camden, NJ Easton Town Center, Columbus, OH Easton Gateway, Columbus, OH The Greene, Beavercreek, OH Bayshore Town Center, Glendale, WI Peninsula Town Center, Hampton, VA Zona Rosa, Kansas City, MO Liberty Center, North Cincinnati, OH 2 5/17/2016 In Summary: 5 Green Field Projects CocoWalk, Miami, FL Centro Ybor, Tampa, FL Newport on the Levee, Newport, KY Newport Aquarium, Newport, KY Adventure Aquarium, Camden, NJ Easton Town Center, Columbus, OH Easton Gateway, Columbus, OH The Greene, Beavercreek, OH Bayshore Town Center, Glendale, WI Peninsula Town Center, Hampton, VA Zona Rosa, Kansas City, MO Liberty Center, North Cincinnati, OH Presentation This presentation is biased by our experience: • Large repositioning projects: > 1,000,000 square feet; • Suburban locations; • Anchored by department stores; • Public Private Partnerships with over 20% of costs funded publicly Presentation This presentation will focus and draw from common themes: • The nature of the shopping trip and its impact on design; • Technical considerations: - Clearing the site and eminent domain; - Increased storm water detention; - Consideration of mixed-use; - Legal structure for vertical integration; - Parking analysis in mixed-use; - Design guidelines • Case Study – Bayshore Town Center (Glendale, WI) 3 5/17/2016 THE NATURE OF THE SHOPPING TRIP AND ITS IMPACT ON DESIGN Shopping Classification Understanding the nature of the shopping trips and their impact on retail environments will allow us not only to address the transformation at a regional retail environment’s level but also to deal with retail environments at the level of neighborhoods, villages, and even streets. The Greene Town Center, Beavercreek, OH Mashpee Commons, Mashpee, MA Park Avenue, Winter Park, FL Shopping Classification When repositioning retail, it is essential to understand the classification of the shopping environments based on the nature of the shopping transaction. 4 5/17/2016 Shopping Classification Is the transaction for goods and services “Need” based or “Want” based? “Need ” “Want ” Shopping Classification “Need ” based shopping transactions: • Provide for objective and basic needs • Use the first dollars of every household income • They represent a decreasing percentage of the expenditures as the household income is higher • The purchase decisions are driven primarily by rational criteria • Require high frequency of visits to the retailers Shopping Classification “Want ” based shopping transactions: • Provide for subjective and aspirational needs • Funded from the discretionary dollars of the household income • Highly variable between low and high income households • The purchase decisions are driven primarily by aspirational criteria • Lower frequency of visits than “need” based trips 5 5/17/2016 Shopping Classification Classification of shopping transactions: Summary Nature of Shopping Trip “Need ”“Want ” Type of Purchases Basic Aspirational Decision Driver Objective & Rational Subjective & Aspirational Household Dollars First Excess (discretionary) Frequency of Visits Higher Lower Example Shopping Classification “Need ” vs. “Want” based shopping environments: “Need ” “Want ” Liberty Center Kenwood Towne Centre Florence Mall Cincinnati, OH Cincinnati, OH Local Trade Areas Regional Trade Area Shopping Classification “Need ” vs. “Want” based shopping environments: “Need ” – Retailers that provide Value for Dollar “Want ” – Experiential and Aspirational Retailers 6 5/17/2016 Shopping Classification “Need ” vs. “Want” based shopping environments: “Need ” “Want ” Convenient Local Access Convenient Regional Access Shopping Classification “Need ” vs. “Want” based shopping environments: “Need ” “Want ” Functional Design Aspirational Design Shopping Classification Classification of shopping environments: Summary Nature of Shopping Trip “Need ”“Want ” Trade Area Local Regional Retailers Value Driven Lifestyle Driven Retailer Example Access Local Regional Design Functional Aspirational 7 5/17/2016 Shopping Classification “Need ” based financial model: • Rents primarily based on costs • Longer term leases with options • Better credit tenants • Financially focused management • Limited and predictable capital expenditures • Portfolios of Kimco, Regency, Weingarten Realty Typical Power Center Shopping Classification “Want ” based financial model: • Rents primarily based on tenant sales • Shorter leases with no options • Lower credit tenants • Experience delivery focused management • Extensive and variable capital expenditures • Portfolios of Taubman, Simon, GGP The Greene Town Center Shopping Classification Classification of financial model: Summary Driver of Shopping Trip “Need ”“Want ” Rent Base Cost Sales Lease Terms Longer Shorter Credit Stronger Weaker Management Focus Financial Experience Delivery Capital Needs Limited/Predictable Extensive/Variable REIT Example Kimco Taubman Financial Instrument Bonds Stocks 8 5/17/2016 Shopping Classification Contribution to community value….. • “Need ” based shopping environments are a part of the basic amenities or infrastructure of a community: i.e. streets, sidewalks, utilities, sewers, garbage collection, etc. • “Want ” based shopping environments define and add value to a community and contribute to its economic development. Shopping Classification - Conclusion Conclusion: • A successful mixed-use development (from a street to a regional project) must be conceived to be responsive to the ‘need ’and ‘want ’ transactions of its trade area. • The ‘want’ retail environments that add significant value to a community must be conceived to be responsive to the changing existential aspirations of its customers. • Whereas the ‘need’ retail, while not adding extra value, must be accommodated consistent with its functional requirements. A Question That is Always Asked…. How do we integrate “Need” and “Want” uses in a single project? 9 5/17/2016 Deciding How to Integrate “Need” and “Want” Based Retail • ACCESS - “Need” requires local access, “Want” depends on scale of project Peninsula Town Center Bayshore Town Center • FEASIBILITY – The process is similar - Non-retail uses are generally enhanced by “want” retail - Retail should always be studied as a single use independent of non-retail uses Deciding How to Integrate “Need” and “Want” Based Retail • FOOD venues are different in “Need” and “Want” environments. “Need ” – fast, casual, and convenient “Want ” – celebratory and special occasions Deciding How to Integrate “Need” and “Want” Based Retail • PARKING criteria differs……. “Need ” – Requires adjacent parking & functional “Want ” – Pleasant parking experience; pedestrian walkability 10 5/17/2016 Deciding How to Integrate “Need” and “Want” Based Retail • AESTHETICS differ “Need ” – Environment attractiveness is a ‘nice to have’ but not “Want ” – Environment and architecture MUST be necessary; functionality and low maintenance is key attractive and aspirational Deciding How to Integrate “Need” and “Want” Based Retail • NON-RETAIL USES are impacted differently. “Need ” – Functionally Enhanced “Want ” – Lifestyle Enhanced Uses that enhance are mostly high Residential, hospitality, and office uses frequency are always enhanced by ‘want’ uses. lifestyle uses (i.e. grocery, convenience, take-out) Deciding How to Integrate “Need” and “Want” Based Retail Integrating “Need” and “Want” Retail: Summary Shopping Classification “Need ”“Want ” Access Convenient & Local Regional Independent of Independent of Feasibility non-retail uses non-retail uses Food Venues Quick Casual Celebratory Parking Functional Pleasant Environment Attractiveness Nice to Have Essential Non-Retail Uses Functionally Enhanced Lifestyle Enhanced 11 5/17/2016 TECHNICAL CONSIDERATIONS Technical Considerations Technical considerations: - Clearing the site and eminent domain - Increased storm water detention - Consideration of Mixed-use - Legal structure for vertical integration - Parking analysis in mixed-use - Design guidelines Technical Considerations: clearing site and eminent domain Peninsula Town Center BEFORE (Coliseum Mall) Peninsula Town Center AFTER Hampton, VA 12 5/17/2016 Technical