LAGUNA HILLS, CA—As GlobeSt.com reported recently, Nadel hascompleted the $17-million expansion of the Village at Nellie Gail Ranch,a shopping center located at the intersection ofMoulton Pkwy. and La Paz Rd. here. The extensive remodel andexpansion project incorporated 28,000 additional square feet ofretail space. We spoke with GregLyon, principal and design director for Nadel, about howarchitect and design firms are approaching shopping-centerrepositioning and how bricks-and-mortar storeshave made peace with online shopping.

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GlobeSt.com: It seems that repositioning is makingup a huge percentage of shopping-center development. How arearchitecture and planning firms like yours approaching theseprojects?

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Lyon: Nadel survived because ofclients repositioning assets. Fortunately, we are also seeing aswell of more ground-up projects happening becauseof all the retail space that was absorbed by food and athleticconcepts during the recession. At first, we saidredevelopment was simply a reimaging job, but wesoon realized it was more of a real estate challenge than a designchallenge. There were three main categories of redevelopment: 1.some clients had a big box that was empty and were trying to divideit up if they couldn't get a single tenant; 2. some clients hadempty shop space within a center; and 3. others had underperformingassets. They all wanted to do everything as economically aspossible. With the big box, it was like a jigsaw puzzle that wecould reduce to reasonable-sized shop space. For empty shop spacewithin a center, the strategy was to come up with a creativeconcept that the brokers could take to market and the tenants couldwrap their brains around, like a Kid Zone where the tenants wereall kid or family focused. That districting created a story thatwould allow brokers to go to market and sell something with acritical mass of visitation. The third issue of underperformingassets was more expensive and challenging—it might be a 30-year-oldcenter across the street from brand-new one that had to beaggressively repositioned for a lifestyle feel. It's an expensiveendeavor, and we're still following that now.

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GlobeSt.com: What issues come up in designing forrepositioning that don't come up for ground-up retaildesign?

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Lyon: You don't always have completedrawings of what's going on in repositioning. You have to look atwhat's going on structurally, but when you go into therepositioning, invariably you find increased costs. There's also acost involved in doing a more complete forensic of the building, soyou can't always do that. Some buildings built 30 years ago don'thave drawings at all. Another big issue is the cost ofADA upgrades. All of a sudden, you find yourselfin a situation where you have to meet all the current standards.And, of course, there is the downtime; no matter what you do youwill disrupt existing tenants or shop-space parking and there maybe scaffolding customers are walking under to get to the shops.

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GlobeSt.com: What other retail design trends are younoticing, particularly in Orange County?

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Lyon: In Southern California ingeneral, but particularly in Orange County, with the emerging foodculture, restaurants are now a viable retailanchor. This is the critical mass of the right dining offering, sorestaurants can function as a weekend and evening anchor for acenter. That culture is so pervasive, and ironically it came out ofthe recession with food trucks offering gourmet food. It introducedAmericans to the concept of building their own gourmet burger orpizza, organic and sustainable foods and renewedthe importance of the Food Network channel.

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There's s shift in ground-up retail now. What was going to be awar between bricks-and-mortar stores and theInternet has evolved into a sophisticatedrelationship between social media and the physical environment.Developers and retail destinations understand it's a continuum andthat a vertical brand has to have a social-media program that'sconnected with their shoppers and guests in a much more ubiquitousway than ever before. There isn't a battle, but a relationship now.It's all about market share.

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Another trend is sustainability.Millennials have come of age and are veryconscious about green issues and sustainability. It's not just theright thing to do but it will create brand loyalty. It's goodbusiness now. Over the past five years, people grew up in thiscountry and now have an income. There's this amazing food trend anda real integration of media and bricks-and-mortars.

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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.