Howard Hughes Center Taps Into the New Retail Experience

Austin Khan is the CIO of the Laurus Corp.

LOS ANGELES—Retail is undoubtedly changing, and retail developers and operators are shifting their retail strategy to fit into the new needs of consumers. The Laurus Corp. is focusing on the new retail experience with the $30 million renovation and repositioning of the Howard Hughes Center . The new center will become a community-gathering place with a curated tenant mix that will attract local residents looking for something that can’t be replicated online, according to Austin Khan , CIO of the Laurus Corp. To find out more about the repositioning plans for the center and about the changing retail landscape, we sat down with Khan for an exclusive interview. Here, he tells all about the design for the center and how it epitomizes the new wave in retail design. GlobeSt.com: What is your vision for the Howard Hughes Center? Austin Khan: Generally speaking, L.A. is a really tight market with respect to vacancy, and we have an open space in the center that is giving us a chance to reconfigure a lot of the common area into a lifestyle element away from what the traditional lifestyle experience is. For us, that means you have retail that is experiential. That can mean anything from special types of retailers to restaurants, which are a mix of fine dining to fast casual concepts, but effectively the goal is to build a mix of retail that drives what consumers are looking for today. Online sales are growing, not only through ecommerce sites but also through Amazon, for example. What people are looking for when they are shopping today is something that can’t be easily replicated online. Obviously dining falls into that and movie theaters fall into that. There are elements that we believe Howard Hughes can be reconfigured with in order to reinvent the center. It also means making things more pedestrian friendly with open plaza space, seating areas, entertainment and things that at the end of the day bring people in for an experience, not for a specific item that they want to buy. GlobeSt.com: So, this is about creating a gathering place more that a shopping center? Khan: We want to create a mix of retail that is more relevant to that. What people are looking for today is how can we have different dining options, and after eating, they might catch a movie or go to experience something going on in one of the store fronts. That is what people are more drawn to. We have seen that change happen really on a national basis where people are really looking for more of that lifestyle element in their shopping experiences. GlobeSt.com: How does the local community play a role in the design? Khan: That is really relevant, not only from your selection of retail tenants but also how you mold the common areas for that particular center and how you focus that on what the community likes from an experience standpoint. To take a center and fill it exclusively with national chains and brands and stores is a detriment to ultimately what the lifestyle experience should be. I think it has to be a more balanced mix, and that is what we aim to achieve. You want to the great local cafes and restaurants be a big part of what you do, and I think that helps really attract the local community to the center. GlobeSt.com: What are some of the design elements that you are including in the center? Khan: We have a lot more outdoor seating areas. You are also going to see a lot more activation of the outdoor spaces in terms of some of the retail entertainment. For example, Howard usually has a wonderful center courtyard that should be a focal point of the center, but just hasn’t had anything designed around it. When we talk about centers like this, how do you add certain elements, like live music and pop store concepts, where people can get a quickly rotating experience. It adds meaning to the center and it gives people a reason to keep coming back. GlobeSt.com: Does this type of retail center take more of an operational approach once the renovations are complete? Khan: It is two elements. It is very important the way that we are spending money. We are spending between the renovations and the tenant spaces, close to $30 million. I wouldn’t want to discount how important the impact is of the actual renovation. Improving the look of the façade, the attractiveness of the approach to the center, changing the way that the circulation of the center runs. When we look at the space as we acquired it, there are some storefronts that are great storefronts, but are a little but hidden just because of the way the circulation was set up when the center was originally designed. We put a lot of capital in to drive more foot traffic through areas of the center that have historically not gotten as much foot traffic. Once you complete that and renovate the center, that certainly allows you to take a different path from a leasing strategy and an operational standpoint. At our centers, we work with groups that specialize in retail leasing at the property level and we handle the asset management internally. We are fully vertically integrated in the way that we operate, and we are going to take on opportunities where we can use our experience from construction and a development standpoint and an asset management standpoint to create value. We are really seeing that process through, and it is a critical way that we source and underwrite opportunities.