Pacific City in Huntington Beach is an example of the physical environment of a retail center attracting visitors.

NEWPORT BEACH, CA—The aesthetics of a retail center, including where the property is physically located, along with the type of tenants occupying space have become the new focus of lifestyle shopping centers. Chris Fredrick, president, and Ian Furar, managing partner, of locally based CCP Real Estate Advisors, tell that these two factors will determine the success or failure of a retail center in today’s environment.

“We’re in the midst of a retail change,” Fredrick says. “We came through the ashes of the downturn in the economy, developers are coming out of the ground and are doing much more thoughtful projects than previously.”

CCP, a commercial real estate brokerage and consulting firm specializing in hospitality, restaurant and retail properties, has been involved in several major Orange County projects recently completed or currently under construction, including Pacific City in Huntington Beach, Lido Marina Village here, Mariner’s Point at PCH & Dover here and Tustin Pacific Center in Tustin. Two things these centers have in common are the physical environment of the stores and the tenant mix, both of which aim to draw in the consumer and entertain them while they are there. This is becoming the new norm for today’s new and renovated shopping centers.

“You used to go to a retail center and buy massive amounts of product and bring it back to your home,” says Fredrick. “You didn’t pay attention to the centers themselves. But what’s coming out of the ground today is from guys that are pretty visionary. They understand that the physical environment is paramount to getting the customer there and getting the tenant there as well—the type of tenant the customer wants. If you don’t have both, it can’t work. All of these centers are attuned to understanding the need to create an environment and an experience for their customers.”

Fredrick and Furar add that going forward, it won’t be a matter of whether or not you have an environment to attract customers—all successful centers will—but what type of environment that is. Not all designs will appeal to all people, and customers will gravitate toward the type of environment that appeals to them.

Rick Caruso is clearly a visionary,” Furar says. “Some people like his designs and some don’t, but his centers have had double-digit growth, and that’s staggering. That speaks to it. You’re going to have to have an element of that experience going forward. It’s not a risk so much, but a requirement.”

Aside from the geographic location of a property, developers are now paying attention to common areas such as pocket parks, courtyards, avenues and alleys that “activate” a center and make it more fun to be there, the CCP executives say. “People want a little element of ‘wow’. The space in between the stores has become paramount, and the programming and events that go on, too. It gives you a reason to go there. You don’t even have to buy anything—people will come again and again, and the chances are greater that they’re going to spend money the more times they come.”

Some of the fun elements at a place like Pacific City, for example, include grand views of the ocean while gathering around a fire pit to have a glass of wine. “Shopping centers have to be a social nexus first and a buying portal second,” says Fredrick. “When you create that physical environment, you get a much better-elevated tenant, a world-class tenant and a collection of them.”