Retail Landlords Creating Community Spaces for Power Centers

CHICAGO—Developers and landlords in the retail sector are all striving to make their properties go-to destinations rather than mere places to shop. NewMark Merrill Cos., a Woodland Hills, CA-based developer, has hit upon a strategy for one of its Chicago-area properties that may provide helpful lessons for owners in any region. A few months ago, the company opened Rspace, a community gathering space, at Winston Plaza, a 404,471-square-foot power center located on the corner of North Ave. and 9th Ave. in suburban Melrose Park.

The 950-square-foot space provides merchants, nonprofits, and community groups with a free, convenient and central place to meet, socialize or hosts groups of up to 30 people. And even though providing such an amenity was at one time considered unusual for retail operators, NewMark officials say for them the move was a natural one.

“It’s an extension of what we’ve been doing as a company for years,” Sandy Sigal, president and chief executive officer of NewMark, tells GlobeSt.com. The company owns or manages a portfolio of over 70 shopping centers valued at more than $2 billion, and has organized events such as “Movies in the Park,” bingo games, and other happenings that encouraged shoppers to see these properties as a community resource.

But dedicating a defined area like Rspace, instead of organizing things on an ad-hoc basis, ensures it sticks in the community’s mind and increases its use, Sigal adds. “It makes the shopping center feel like it’s part of the neighborhood.”

Shortly after opening, the town’s parks committee used it for a meeting, in addition to the local chamber of commerce. Furthermore, tenants find it helpful for doing employee trainings, and the neighborhood’s clubs for children used it during the summer when the region’s unpredictable weather did not cooperate.

Sigal says Rspace, and spaces like it, fit in well with many trends in commercial real estate. Office providers like WeWork have gotten many accustomed to open spaces made available for temporary use. In addition, “we are doing more pop-up stores for retailers that don’t want a long lease. This is all part of the phenomenon of shopping centers providing temporary spaces that have adaptive uses.”

Best Buy, a Winston Plaza tenant, provided Rspace with a large smart TV, and the space also features a buffet table for food or meeting related items, connected restroom and free Wi-Fi. NewMark also included two large pieces of original art by a prominent Chicago chalk artist, which it will change out throughout the year. The company also opened a Rspace at Village at the Peaks, a 442,000 square foot shopping center in Longmont, CO.

Sigal does not worry much about the future of retail. “All last year, I fought the notion that retail was dying,” he says. The NewMark properties, heavily occupied by retailers that could resist internet competition, were already doing well. And if an owner offers shoppers something exciting, he believes it should be able to manage the challenge of e-commerce.

It’s tough to gauge how much a something like Rspace impacts the bottom line of a center, but Sigal feels it can play an important role. “It makes people more sticky. They see it as part of their community.”