- Posted at 5:17, December 10, 2013
- By Russ Bleemer
This morning’s International Council of Shopping Centers' plenary overview of retail real estate markets assessed the future from a variety of angles that focused on one word, density.
The panel dismissed past images of urban decay, and said that the city is where it’s at for retailing, and access is essential.
The suburbs won’t be abandoned, but the trends are toward downtown innovations that provide a comfortable base to live and work for young employees, and, crucial for retailers, the nation’s aging population.
The opening panelist set the tone and tenor of session. Thomas Caputo, president of Equity One Inc., a shopping center developer and owner which has executive offices in New York City and North Miami Beach, Fla., explained at the outset that his company in recent years has re-tooled from a portfolio base in the Southeast to focus on cities.
“We are now recycling our portfolio to get out of smaller” population centers, he said, seeking more geographic and demographic diversity.
He said the company is moving out of areas with populations of 50,000 to 60,000 near its traditional Southeast shopping centers, to the Northeast—with shopping centers in the Bronx and Westbury, N.Y.--the San Francisco Bay area, and Los Angeles’s environs.
He said when it is considering developments, the company is seeking a population of about 200,000 within five miles of where its shopping centers would be located; the current focus areas have an average household income of just under $100,000 annually, he said.
The Equity One website says the company is focused on urban communities, and since 2009 has acquired or developed nearly $2 billion in retail centers in the urban areas noted above, as well as South Florida. The site says that as of Sept. 30, Equity One owned 144 properties, “with a total market capitalization (including debt and equity) of $4.3 billion.”
“Denser populations is the goal for entry,” said Caputo. “This is the business model.”
Supermarket industry consultant Matthew P. Casey, who does feasibility studies at his Clark, N.J., firm, discussed the adaptability of retailers who sell food, citing the Court St., Brooklyn, Trader Joe’s as an example. The store was established in an old, repurposed bank, with little street parking nearby.
But he said that the industry is wrestling with smaller urban footprints, and in a massive change from two decades ago, all supermarkets offer at least some prepared food. He said that suburban supermarkets face difficult adjustments when they need to add parking decks, and multilevel or smaller spaces.
More on supermarkets in Part Two…