LOS ANGELES—The retail market is undeniably changing. Anchor tenants, which once drove traffic, are no longer the key to a successful retail center. Today the tenant mix—with a heavy focus on restaurant and entertainment tenants—and the common spaces at a retail center are driving traffic, according to Austin Khan, CIO of the Laurus Corp., who is employing this strategy at the renovation and repositioning of the Howard Hughes Center.

“Changes in consumer taste and demographics are really creating a lot of opportunities in the retail space. The old model was that you would have a significant amount of anchor space. Those anchors would pay a very small fraction of what your traditional tenants would pay, and they would drive all of your traffic through your centers,” Khan tells GlobeSt.com. “We are seeing that that is changing.”

With the growth of online retail, consumers today don't need to go to a retail center just to buy a product, they are looking for an experience that can't be replicated online. As a result, many of the former anchor giants that were responsible for driving traffic, are starting to scale back. “The commoditized goods are selling online, and that is why you are seeing so many of the big anchors, whether it is a Macy's or a JC Penny's or groups like that, really reconfiguring their storefronts and their footprints,” says Khan. “That creates an opportunity for our investors to take those centers and really reconfigure them to what consumers are looking for today. What they are looking for is retail that can't be easily replicated online.