What Smart Retail Developers Are Asking Themselves

Jeffrey Bayer, president and CEO of Bayer Properties, offers strategic insight.

ATLANTA—If you ask five different retail gurus what trends they see in retail real estate, you’re likely to get more than five different answers. The threshold is changing and development is evolving. GloeSt.com caught up with Jeffrey Bayer, president and CEO of Bayer Properties who recently joined the ICSC ‘s board of trustees, to get his insights in part two of this exclusive interview. You can still read part one: What Drives Successful Retail Developers . GlobeSt.com: How is the threshold in the retail market changing? Bayer: The threshold for the retail market is shrinking in quantity but growing in quality. A market that previously supported six centers might now only have three strong centers; however, those three centers can do quite well, commanding high rents with heavy foot traffic. It was once said, “Build it and they will come.” Smart developers are now asking themselves, “Why should they come?” It’s the ability to correctly answer “why” and create purpose that separates success from failure. As an ICSC board member, I am excited to be among our industry’s thought leaders and have the opportunity to help pave the way for the continued evolution of retail as we embrace the rapid pace of technology and evolving consumer habits. GlobeSt.com: What trends do you see in retail commercial real estate? Bayer: Retailers are demanding and expecting more from developers. This is not necessarily a price-driven market but a brand-driven market. Today’s best-in-class retailers want space that not only serves as an extension of their brand, but also one that is surrounded by other like-minded brands. Additionally, retailers are seeking spaces within a destination that is authentic to the local market. We have deemed this “place-making,” but that implies creating something from nothing. For me, what we are experiencing now and will continue to experience is more sophisticated. I think of it as “purpose-making.” As developers, we must evaluate a project by learning its history, listening to its story, and creating an authentic destination that is meaningful for the community. By discovering the nuances of the land or a historical building and embracing them, we are answering the contemporary need for purposeful destinations.   For example, Bayer Properties is successfully developing The Summit at Fritz Farm in Lexington, Kentucky, on the site of a historic farm. In being mindful of Lexington’s equestrian culture, engaging a well-known local garden designer, incorporating elements of the farm into the property, and featuring local purveyors, we are creating an authentic destination that is attracting well-known, first-to-market retailers and chef-driven restaurants. At the other end of the spectrum, we are repurposing The Pizitz historic building, which was a 1920s department store in Birmingham, Alabama. We are redeveloping it into a mixed-use destination located in the city’s urban core. It will include residential, beta office space, and a first-to-state food hall with a retail component. Many other changes are occurring but we should be somewhat cautious in our attempt to only follow trends, which typically appeal to younger customers … the Millennials. Our changes cannot alienate Baby Boomers and Gen X as those generations account for approximately 100 million consumers in the US, with significant spending power.