GlobeSt.com: What are the challenges that come with redeveloping a mixed-use center?

Vaccaro: Each site is different from market, site make up, land-use and best and highest-use perspectives, but perhaps the greatest common challenge is ensuring that the uses complement each other, while at the same time making sure there aren't any functionality challenges created. In many instances, the residential component is the driving factor in the development, while the commercial component is almost an afterthought. In these types of projects, we have seen that the commercial portion of the project often underperforms due to poor accessibility and inconvenient parking layout.

GlobeSt.com: Did you have that similar challenge with this project?

Vaccaro: In the case of Lake Forest Gateway, we didn't have that issue because it was always planned to be a retail center first. The hotel was later introduced into the development. Our retail tenants enjoy high visibility, signage and accessibility, and by adding the hotel—which also includes subterranean parking—we are creating an environment conducive for the hotel and retail.

For the parking situation in particular, hotel parking is most needed in the overnight hours, while the surrounding shops need the parking available during the day and early evening. Our plan, therefore, is to have the hotel parking available to the shops and their employees during the day while the hotel patrons will have use of the shops' parking overnight if needed on busy nights.

GlobeSt.com: How do hotels in a mixed-use center differ from those that are not in a mixed-use center?

Vaccaro: The hotels themselves do not differ much. In this instance, however, we are developing a limited-service hotel. The hotel component, therefore, creates an on-site customer base that can easily access the additional adjacent amenities that aren't offered by the hotel. It provides a very synergistic relationship between the hotel and the rest of the mixed-use center.

GlobeSt.com: In what ways do hotels in a mixed-use center play off other uses in the same property? Vaccaro: The various food and service tenants just outside the hotel create a convenient experience for the hotel guests and employees, which adds strong appeal as opposed to stand-alone hotels with no walkable restaurants and services surrounding it. The benefit to the hotel customer is to avoid the need of having to get in a car for their dining and service needs.

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LAKE FOREST, CA—The various food and service tenants just outside hotels in mixed-use centers create a convenient experience for hotel guests and employees, adding strong appeal as opposed to stand-alone hotels, ValueRock Investment Partners' SVP Dennis Vaccaro tells GlobeSt.com. The firm recently completed the retail portion of a major redevelopment of Lake Forest Gateway Center, located at 23592 Rockfield Blvd. here, and has also received Lake Forest City Council approval to construct a 99-room Springhill Suites by Marriott on the project.

ValueRock has owned the mixed-use center for many years and has spent the past several years determining and planning the appropriate timing, use and design to initiate a major reinvestment and modernization program which, upon completion of the hotel, will be in excess of $50 million.

Prior to the redevelopment, Lake Forest Gateway Center consisted of aging retail and office buildings. ValueRock recognized that the center's high-traffic, high-profile location would be better suited as a modernized property, which would attract a stronger mix of retailers and restaurants. After years of strategic planning, the firm initiated new construction by demolishing four of the existing buildings including the office buildings and a bank branch. ValueRock then constructed new buildings and initiated an entire redesign of the center to modernize the architecture.

We spoke with Vaccaro about the project, as well as the value of hotels in mixed-use centers.

GlobeSt.com: What are the challenges that come with redeveloping a mixed-use center?

Vaccaro: Each site is different from market, site make up, land-use and best and highest-use perspectives, but perhaps the greatest common challenge is ensuring that the uses complement each other, while at the same time making sure there aren't any functionality challenges created. In many instances, the residential component is the driving factor in the development, while the commercial component is almost an afterthought. In these types of projects, we have seen that the commercial portion of the project often underperforms due to poor accessibility and inconvenient parking layout.

GlobeSt.com: Did you have that similar challenge with this project?

Vaccaro: In the case of Lake Forest Gateway, we didn't have that issue because it was always planned to be a retail center first. The hotel was later introduced into the development. Our retail tenants enjoy high visibility, signage and accessibility, and by adding the hotel—which also includes subterranean parking—we are creating an environment conducive for the hotel and retail.

For the parking situation in particular, hotel parking is most needed in the overnight hours, while the surrounding shops need the parking available during the day and early evening. Our plan, therefore, is to have the hotel parking available to the shops and their employees during the day while the hotel patrons will have use of the shops' parking overnight if needed on busy nights.

GlobeSt.com: How do hotels in a mixed-use center differ from those that are not in a mixed-use center?

Vaccaro: The hotels themselves do not differ much. In this instance, however, we are developing a limited-service hotel. The hotel component, therefore, creates an on-site customer base that can easily access the additional adjacent amenities that aren't offered by the hotel. It provides a very synergistic relationship between the hotel and the rest of the mixed-use center.

GlobeSt.com: In what ways do hotels in a mixed-use center play off other uses in the same property? Vaccaro: The various food and service tenants just outside the hotel create a convenient experience for the hotel guests and employees, which adds strong appeal as opposed to stand-alone hotels with no walkable restaurants and services surrounding it. The benefit to the hotel customer is to avoid the need of having to get in a car for their dining and service needs.