CHICAGO—In the past, commercial real estate developers kept different types of properties neatly separated into silos. Retail centers were exclusively retail, and apartment complexes were just places to live. But these days, many apartment dwellers want shopping and entertainment options as close as possible, and the rise of e-commerce means brick-and-mortar stores need additional ways of drawing shoppers inside. Therefore, making new projects into true destinations, places where a broad cross-section of users want to shop, live, work and play has become the driving force in the modern world of real estate.
At DLA Piper's 14th Global Real Estate Summit in Chicago last Tuesday, the global law firm brought together a group of executives working on some of the most innovative developments in the nation, as well as some of the most colossal. And the key takeaway was that to be successful, developers must be creative and willing to experiment.
“What may work in Oak Brook, IL may not work in Des Moines,” said Shobi Z. Khan, president and chief operating officer of GGP, Inc. “You've got to find the pieces that work together.”
One thing his firm discovered, he added, was that some of their centers had far too much space set aside for apparel stores, a category that has suffered from internet competition. Now, the firm looks to shrink apparel use to about 30% and mix in services in demand from the local community, whether that is health clubs, restaurants, or other entertainment.
Donald C. Wood, president and chief executive officer of Federal Investment Realty Trust, added that real estate conference panels on placemaking used to attract far fewer people, and those that did show were probably architects or designers. But most professionals now see this aspect of the business, which is more art than science, as something that concerns everyone. “It's moved from item seven to item two, or even item one. It's hardly fluff; it's the name of the game.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
