Why Tight Capital Isn’t an End to Retail Development

Many developers are reconsidering their strategies in light of higher interest rates and increased uncertainty as they determine their next best steps. According to Nick Wibbenmeyer, west region president and CIO of Regency Centers, new development requires three critical elements: expertise, relationships, and capital.

“Expertise, relationships, and capital are the recipe for getting projects built and redeveloped,” says Wibbenmeyer. “In some of the historically stronger market environments, you could move forward if you had two of those three, and many small developers focused on local expertise and local relationships but didn’t have the capital.”

However, understanding how to strengthen all three areas – including creative ways to tap into capital – is critical to successful project execution in uncertain economic times.

Developing expertise

Expertise is a two-part solution, including leveraging quality data and talented individuals on the ground who work and live in the communities, according to Wibbenmeyer.

For example, Regency Centers recently started an open-air conversion project, The Shops at SunVet in Holbrook, NY. During the research phase, they identified that the project was located in a high-quality trade area, had income growth potential, and was situated in a location with 112,000 vehicles passing daily.

In addition to looking at the analytical data, they tapped into local employee knowledge. “We wanted to understand local consumer behavior, their needs, where they want to spend their time, energy, and money,” says Wibbenmeyer. “We have that breadth of knowledge on a national scale due to our 23 local, fully staffed offices across the nation.” 

He explains that combining data with firsthand knowledge from individuals living, shopping and engaging in their communities helps bring new opportunities into focus. 

Fostering community relationships

Community ownership is critical to a project’s success and begins long before breaking ground. Wibbenmeyer emphasizes the importance of strategic placemaking, considering questions such as whether the development will be designed for a quick in-and-out experience or gathering for dwelling. 

With questions like these, spaces are designed intentionally with attention to details such as the width of sidewalks, parking landscapes, outdoor dining spaces, and more. Wibbenmeyer notes that placemaking is tied directly to the merchandising mix, ensuring all important factors align. 

“You want to make sure that you consider placemaking from day one, and that’s where a partner with years of experience is helpful,” says Wibbenmeyer.

Gathering capital 

As interest rates began ticking upward, accessing capital undoubtedly became more difficult. However, it doesn’t have to be so when partnering to strengthen all three important areas for development—expertise, relationships, and capital. 

“We’re excited about the future,” says Wibbenmeyer, “our platform, the strength of our balance sheet, and access to capital gives us the ability to execute projects but also partner with smaller developers who might need support filling in the gaps or master plan developers that need us to bring in our expertise or relationships.” 

Visit Regency Centers at ICSC Las Vegas, Central Hall booth 3160K.