NEWPORT BEACH, CA—The aesthetics of a retailcenter, including where the property is physically located, alongwith the type of tenants occupying space have become the new focusof lifestyle shopping centers. ChrisFredrick, president, and Ian Furar, managing partner, oflocally based CCP Real Estate Advisors, tell GlobeSt.com that thesetwo factors will determine the success or failure of a retailcenter in today's environment.

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“We're in the midst of a retail change,” Fredrick says. “We camethrough the ashes of the downturn in the economy, developers arecoming out of the ground and are doing much more thoughtfulprojects than previously.”

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CCP, a commercial real estate brokerage andconsulting firm specializing in hospitality,restaurant and retail properties, has been involved inseveral major Orange County projects recently completed orcurrently under construction, including Pacific City in Huntington Beach, Lido Marina Village here, Mariner'sPoint at PCH & Dover here and Tustin PacificCenter in Tustin. Two things these centers have in commonare the physical environment of the stores and the tenant mix, bothof which aim to draw in the consumer and entertain them while theyare there. This is becoming the new norm for today's new andrenovated shopping centers.

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

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Fredrick and Furar add that going forward, it won't be a matterof whether or not you have an environment to attract customers—allsuccessful centers will—but what type of environment that is. Notall designs will appeal to all people, and customers will gravitatetoward the type of environment that appeals to them.

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

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Aside from the geographic location of a property, developers arenow paying attention to common areas such as pocket parks,courtyards, avenues and alleys that “activate” a center and make itmore fun to be there, the CCP executives say. “People want a littleelement of 'wow'. The space in between the stores has becomeparamount, and the programming and events that go on, too. It givesyou a reason to go there. You don't even have to buyanything—people will come again and again, and the chances aregreater that they're going to spend money the more times theycome.”

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

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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.