X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ORLANDO-Big-name regional mall tenants are taking a hard look at the wave of affluent “new towns” entering suburbia and even some central business districts. Some tenants figure they can generate $400 per-sf sales in the town centers–without the parking hassles of a mall. That’s what is driving the town center revival in some suburbs.

Two Orlando retail real estate professionals agree on the town center’s long-range potential benefits for tenants, owners and residents but disagree on the regional mall’s future existence.

“The regional mall is dead,” David W. Marks, president, Marketplace Advisors Inc., Orlando, and a former Trammell Crow Co. senior vice president/retail, tells GlobeSt.com. “The regional mall replaced the old town center and now the town center is making a comeback.”

Town centers won’t replace regional malls, John M. Crossman, senior vice president/retail, Trammell Crow Co., Orlando, tells GlobeSt.com, “but they can hurt them.”

He says, “Keep in mind that the mall and town centers are a different experience.” For example, Winter Park Village in suburban Orlando is “a great place for dinner, a movie and some light shopping,” Crossman says. Yet “the mall is still the best place for Christmas shopping, but not for dinner.”

Marks is working with developers/owners on at least two major town center projects in the Southeast.

“For the regional mall to regain its position of dominance in our urban landscape, it needs to reinvent itself as the town center for communal activity of its region, supporting such diverse activities as civic events, people watching, meeting friends, working and being entertained,” the consultant tells GlobeSt.com.

“The sterility of the regional mall as a one-dimensional fashion center is being replaced by the concept of a town center that is more inclusive with other activities, such as entertainment, office, residential and civic functions,” Marks says.

But those things are happening, for the most part, only in affluent neighborhoods, not from demand by the consumer mass accustomed to shopping at big-box retailers, according to published reports of town center development across the country.

Crossman agrees. Town center development currently is “limited to the highest-income areas,” he tells GlobeSt.com. “Town centers do not appeal to the masses. Wal-Mart is the real town center of America.”

He says “today’s consumer is extremely busy” at the same time he or she is “looking for socialization and an experience. The town center concept provides an outlet for that.” Meanwhile, regional malls “have to compete for time and money of the high-end consumer.”

Marks is confident “well-planned regional town centers can generate sales in the $400-and-up per-sf range, which is required by the retailers to be profitable.”

Crossman says that sort of sales volume will vary because “every town center is different and most malls are the same.”

Marks notes “the regional mall represented a generation of town centers that were developed in suburbia” 40 years ago. “The next generation of regional town centers will have a trade area similar to a regional mall, 250,000 people or more.”

The consultant says “each town center will be unique to its setting. A developer will no longer be able to use a cookie-cutter approach to build his regional development.”

Both Marks and Crossman agree town centers are more expensive to build and plan than regional malls. “While the consumer demand (in affluent communities) remains high, it is difficult to finance these deals,” Crossman tells GlobeSt.com. This is “a great example of Wall Street and Main Street disagreeing,” the broker says, but “this situation opens the door for smaller developers.”

The massive parking problems at some regional malls are expected to be resolved by well-planned town centers, Marks says. “By mixing various activities in walking distance to each other, town centers can be developed at a higher density by using shared parking, increasing the building-to-land ratio by up to 50%,” the consultant says.

Additionally, “this type of development will allow us to be less dependent on our automobiles, as some of our home, work and leisure activities are mixed together in these town centers,” Marks says. “Many of these developments will require structured parking, which will allow for the elimination of the sea of parking required by the regional mall, typically 50 acres for 5,000 cars.”

Crossman says parking at regional malls and town centers will remain a problem until developers and local governments jointly work out a solution for each project. “I don’t have an easy answer,” he says.

On the question of available developable land for town centers, Marks feels some of the projects will be created on urban development sites, such as defunct regional malls and former industrial plants. “Others will be developed on green suburban sites as part of the fabric of new communities,” he says.

The consultant says there are “numerous opportunities for the development of regional, community and neighborhood town centers in the Southeastern United States and the rest of the nation” and feels investors, developers and owners are “just starting to scratch the surface of new town center concepts and development opportunities.”

Unlike Marks, Crossman thinks developable sites throughout the state and in Central Florida specifically are “very limited to the areas that are supported by high-income areas.”

He cites town centers at Celebration, FL in Osceola County, Winter Park Village in Winter Park, FL and CityPlace in Downtown West Palm Beach as examples of projects where land was immediately available for development.

Crossman also predicts the struggling, 27-year-old Church Street Station complex in Downtown Orlando could emerge as a successful town center venture under its new owner. “Look for Church Street Station to make a big comeback in 2002,” the broker predicts. “It has all the right tools to make it.”

He adds, “Imagine if all the of the Celebration tenants were Downtown.” Celebration, a new town of 5,000, is a five-year-old Walt Disney World development 20 miles south of Downtown Orlando.

“While it (Celebration) is a good example of a mixed-use concept in many ways (architecture, water feature), it would not be successful without the Disney machine behind it,” Crossman tells GlobeSt.com. “While it has the income, it does not have and may never have the density to support a (true) town center concept.”

The Crow executive says “the Disney machine gives it tremendous press, which helps to offset the lack of density.”

Marks cites the Winter Park Village in suburban Orlando as “a good example of a defunct mall reinventing itself into a regional entertainment town center.”

The development, eight miles north of Downtown Orlando, has a Regal Theater, Borders bookstore, several restaurants such as the Cheesecake Factory and P.F. Chang’s, office space, loft apartments and other retail.

“The new mix has increased the center’s trade area from a couple of miles to a super regional scale of approximately a 10-mile radius,” Marks says.

In North Florida, the consultant notes Simon Property Group of Indianapolis, IN and Ben Carter Development of Atlanta plan to build the St. John’s Town Center on the south side of Jacksonville, FL, 240 miles north of Downtown Orlando. The center will have a Main Street urban design.

In South Florida, the $550-million CityPlace town center in Downtown West Palm Beach “has taken new town venters to the next level,” Marks tells GlobeSt.com.

CityPlace is a 77-acre retail, restaurant, entertainment, office and residential enclave. It is anchored with Macy’s, Barnes & Noble, a live theatre, a 20-screen Muvico movie theatre and an FAO Schwarz store.

Crossman reiterates that a town center in a Downtown setting such as West Palm Beach is not the norm.

“Keep in mind that the customer of the mixed-use concepts we are describing is high-end,” the broker says. “So only markets that have a certain level of wealth are seeing these deals.”

Downtown West Palm Beach has “high-income areas to the north, south and east,” Crossman notes and so fits the town center profile perfectly.

Coincidentally, Crossman’s father, a minister, figured in the early planning of CityPlace, unknown to the current New York owners, CityPlace Partners (Related Cos., Palladium Co., O’Connor Group and State Teachers and Retirement System of Ohio.)

“The last minister at the church that is the heart of the West Palm Beach project was my dad,” Crossman tells GlobeSt.com.

“He was there when they voted to sell (the property) and move. It was the only real estate deal he was ever involved in–and he didn’t even make a commission.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE Awards 2020Event

These awards honor the industry's most influential and knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.