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  #141  
Old Posted Mar 6, 2011, 9:46 PM
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As Big Boxes Shrink, They Also Rethink


MARCH 3, 2011

BY MIGUEL BUSTILLO

Read More: http://online.wsj.com/article/SB1000...936377760.html

Quote:
Major big-box retailers have been shifting to smaller stores—and scratching around for more profitable ways to fill under-used spaces as they go about reinventing themselves. Some are becoming landlords, turning excess space over to other businesses. Others are trying to fill the space themselves by stretching into new products and services. Sears Holdings Corp. is letting prospective tenants browse an online list of Kmart and Sears stores with space to rent. No deal seems too tiny: It let a Rockford, Ill. dental clinic set up shop in two Kmarts last year, though the venture fizzled after the owner ran into unrelated financial trouble. "If you want 3,000 square feet in Sarasota, we can work with you on that," says Sears spokeswoman Kimberly Freely.

Sears reached a deal to lease 34,000 square feet of store space in Greensboro, N.C., to Whole Foods Market Inc. for a grocery store set to open in 2012. Home Depot Inc. is selling off portions of its parking lots to fast-food chains and auto repair shops. Gap Inc. is reverting to a Russian nesting-doll strategy: after years of expanding by adding standalone stores such as GapKids and Gap Body, it is shrinking them and stacking them back inside its namesake Gap stores.

As consumers trim their spending and shift their shopping to cyberspace, American retailers are acting on a realization that many of their stores are too big. "You have a massive rush throughout retail to get small," says Leon Nicholas of consulting firm Kantar Retail. "Honestly, I am not sure what's going to happen with a lot of these giant boxes. I like to joke that perhaps they can be turned into retirement homes for Baby Boomers."

Best Buy Co. last week became the latest retail chain to go smaller, announcing last week that it was slowing growth of new big-box stores this year in favor of adding 150 Best Buy Mobile locations, focused on smartphones. Best Buy, which already added musical instruments to its regular electronics inventories in an effort to fill floor space, is also getting into health and exercise equipment to better utilize its larger stores.

.....








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  #142  
Old Posted Mar 11, 2011, 5:13 PM
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The Future of the Strip?


March 2, 2011

By Edward T. McMahon



Read More: http://urbanland.uli.org/Articles/2011/Mar/McMahonStrip

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For more than 50 years, retailers have favored the commercial strip: a linear pattern of retail businesses strung along major roadways characterized by massive parking lots, big signs, boxlike buildings, and a total dependence on automobiles for access and circulation. For years, planners have tried to contain and improve the strip. Now they are getting help from consumers and the marketplace. The era of strip development is slowly coming to an end. Evolving consumer behavior, changing demographics, high-priced gasoline, internet shopping, and the urbanization of the suburbs are all pointing to a new paradigm for commercial development. Commercial strips are not going to disappear overnight, but it is becoming increasingly clear that strip retail is retail for the last century. The future belongs to town centers, main streets, and mixed-use development.

We’re overbuilt on the strip

From 1960 to 2000 there was an almost tenfold increase in U.S. retail space, from four to 38 square feet per person. For many years, retail space was growing five to six times faster than retail sales. Most of this space came in the form of discount superstores on the suburban strip.

.....

Retail is rediscovering the city

In 2010, Target announced plans to remodel the century-old Carson Pirie Scott department store in Chicago. This landmark building, designed by architect Louis Sullivan, will be just one of many new, so-called big-box retailers planned for urban neighborhoods.

.....

The suburbs are being urbanized

At the same time that retail is rediscovering the city, the suburbs are being redesigned. Chris Leinberger recently declared that “the largest redevelopment trend of the next generation will be the conversion of dead or dying strip commercial centers in the suburbs into walkable urban places.” The conversion of car-dependent suburban development is already underway in many metropolitan areas like Washington and Los Angeles, and can be expected to increase in the years to come.

.....

Traffic congestion, fuel prices, and auto-oriented design are problems for the strip

Americans value convenience, but the perceived convenience of the strip has been reduced as traffic congestion has worsened in recent years. Add to this rising fuel prices and an overall physical environment designed for cars, instead of people, and it’s understandable why fewer people want to shop the strip and almost no one wants to linger.

.....

Young consumers favor walkability and places with character

Walking for pleasure is, by far, America’s number-one form of outdoor recreation. If you combine walking with shopping—another one of America’s favorite pastimes—you have a winning combination. Time-constrained lifestyles and boredom with the dull sameness of most strip centers have meant a slow but steady decline in the number and length of stays at strip malls.

.....

The economy is restructuring the retail landscape

The recession saw the collapse of numerous big-box chains, like Circuit City and Linens ’n Things. This helped send vacancy rates soaring. After three years on the brink, consumer confidence has improved, but many analysts say we can expect a new “normal” when it comes to retail spending. Why? Because unemployment remains high, the days of unlimited credit are over, and retail analysts predict that a “new consumer frugality” will be the norm for years to come. What’s more, strip centers without anchors (like grocery stores) and Class B malls are virtually unfinanceable, according to many experts.

.....

E-Commerce means fewer and smaller stores

Today, the nation’s “healthiest” retailer is not Wal-Mart or Costco. It is Amazon. Amazon has exploited the increasing availability of broadband internet and mobile technology to build a retail superpower. One of the biggest reasons why the strip is coming to an end is because bricks-and-mortar stores are becoming a smaller part of the retail landscape.

.....



A typical commercial strip.






The old paradigm: single use, auto-oriented.






The new paradigm: mixed use, accessible by both cars and pedestrians.

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  #143  
Old Posted Mar 11, 2011, 9:37 PM
J. Will J. Will is offline
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Much of the new retail in suburban Toronto looks like the picture below I took from Google Streetview. The buildings will come to (or close to) the sidewalk, and the stores will sometimes have windows facing the sidewalk, but often the stores will have no entrance from the sidewalk, and you have to walk around to the parking lot side to access the store.

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  #144  
Old Posted Mar 12, 2011, 12:52 AM
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Quote:
Originally Posted by M II A II R II K View Post



The new paradigm: mixed use, accessible by both cars and pedestrians.

This is picture perfect beautiful. I wish all malls, strip malls and big box stores could be converted to this.
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  #145  
Old Posted Mar 29, 2011, 6:24 PM
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Chain Retailers Should Benefit From Urban Rebirth


March 29, 2011

By Rocco Pendola



Read More: http://seekingalpha.com/article/2606...-urban-rebirth

Quote:
Urbanists, as they like to call themselves, have been touting a "back to the city" movement for several years. While legitimate debate continues, loose, but more than anecdotal evidence exists to support the claim that many downtowns and metropolitan cores are experiencing a resurgence. University of Toronto professor Richard Florida, author of the landmark book, The Creative Class, recently reviewed a Brookings Institution study showing signs that adults, 25 years of age and older with college degrees, favored urban cores between 2007 and 2009, whereas previously this group tended towards largely suburban sunbelt cities. Some metros have started to reverse out-migration, while others have actually seen migration losses morph into gains.

You can likely attribute some of this movement to college graduates taking high-tech jobs in places like San Francisco, creating a backlash among some residents thanks to the high cost of housing. While median rents in San Francisco dipped with the economic downturn, they remained relatively high and have bounced considerably off of their early-2010 lows. Because we have always known San Francisco for its strong, if not necessarily growing urban core, Los Angeles provides a better case study for downtown revitalization. And in regards to retail development, the national media has largely ignored the city. I believe downtown Los Angeles's burgeoning relationship with modern-day retail can offer clues to investors looking at the space.

When most people think of Los Angeles, Hollywood, sprawling suburbs, and car culture come to mind. For many, Downtown Los Angeles evokes images of little more than a desolate Skid Row, not an emerging organism on par with San Francisco's Union Square or even smaller, but thriving urban districts such as Portland's Pearl District. The truth about Downtown Los Angeles lays somewhere in between. The area experienced a virtual standstill in condominium building and sales during the height and aftermath of the housing crisis, but things are beginning to pick back up. Downtown Los Angeles now boasts more than 50,000 residents. While that might not sound like much, the critical mass acheived by those now living in and moving into the core, the thousands who work there, and the millions with relatively easy access to it triggers big retail's attention.

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  #146  
Old Posted Mar 29, 2011, 7:35 PM
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Originally Posted by jigglysquishy View Post
This is picture perfect beautiful. I wish all malls, strip malls and big box stores could be converted to this.
That Clark street in Chicago:
http://maps.google.com/maps?f=q&sour...=12,185.7,,0,0

There is a urban format Home Depot in same general area over on halsted:
http://maps.google.com/maps?f=q&sour...=12,36.65,,0,0
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  #147  
Old Posted Mar 29, 2011, 8:02 PM
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Originally Posted by jigglysquishy View Post
This is picture perfect beautiful. I wish all malls, strip malls and big box stores could be converted to this.
Unfortunately it's hardly the new paradigm.

Street-level retail is as old as cities. And unfortunately, we still build a ton more suburban crap than street-level retail.
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  #148  
Old Posted Mar 29, 2011, 8:58 PM
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Unfortunately it's hardly the new paradigm.

Street-level retail is as old as cities. And unfortunately, we still build a ton more suburban crap than street-level retail.
Yeah no shit. In other news: Fire has been invented.
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  #149  
Old Posted Mar 29, 2011, 9:07 PM
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Originally Posted by lawfin View Post
In other news: Fire has been invented.
Plus round wheels are the new sliced bread!
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  #150  
Old Posted Mar 29, 2011, 9:21 PM
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Yeah no shit. In other news: Fire has been invented.
Huh?

You just posted examples of this alleged "new trend". By your own rationale, you're a few millenia behind the times.

If you find the premise ridiculous (highlighting the "new trend" of street level retail), then why are you wasting your time singling out examples of the idea?
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  #151  
Old Posted Mar 29, 2011, 9:32 PM
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That new trend should be in places where there's enough people in the area to support it and in a walkable fashion. Not to have every suburban type setup disappear altogether.
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  #152  
Old Posted Mar 29, 2011, 9:56 PM
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Originally Posted by Crawford View Post
Huh?

You just posted examples of this alleged "new trend". By your own rationale, you're a few millenia behind the times.

If you find the premise ridiculous (highlighting the "new trend" of street level retail), then why are you wasting your time singling out examples of the idea?
1. Where did I claim it was a new trend. Did not. Work on your reading comprehension.

2. I simply recognized that photo as Clark street in Chicago, which is filled with street fronting retail. And posted a google map link to it and to one a few blocks away that houses a Home depot.

3. My commentary about fire being invented was in agreement with your sarcastic snark at the idea that somehow street fronting retail is a novel idea.
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  #153  
Old Posted Mar 30, 2011, 12:46 AM
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Originally Posted by J. Will View Post
Much of the new retail in suburban Toronto looks like the picture below I took from Google Streetview. The buildings will come to (or close to) the sidewalk, and the stores will sometimes have windows facing the sidewalk, but often the stores will have no entrance from the sidewalk, and you have to walk around to the parking lot side to access the store.

I hate this trend. I've seen plenty of it in Toronto and the surrounding 905.
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  #154  
Old Posted Apr 6, 2011, 11:50 PM
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Why Renewed Urbanization Will Drive Change in Retail Strategies


Apr 6, 2011

By David J. Lynn, Ph.D.

Read More: http://retailtrafficmag.com/news/why...tail_04062011/

Quote:
Changing demographics and shifting land use patterns will significantly influence development of retail investment strategies going forward. These trends taken together represent a progression toward greater urbanization in the U.S., a movement back toward the cities and to higher density living and diverse patterns of mixed-use development. This evolving trend stems from contemporary choices of Baby Boomers and Echo Boomers, rising transportation costs, and community and government preferences toward mixed-use, higher-density, walkable communities and away from suburban sprawl. The renewed urbanization represents a significant turn from suburbanization patterns of the past decades. Retailers are already adapting their formats to respond to these changes.

- The social preference will be the strongest attraction for Baby Boomers to urban areas. Retiring Baby Boomers will have a net migration to rural areas if they follow behavior of their predecessors, according to John Cromartie and Peter Nelson in their 2009 study, “Baby Boom Migration and Its Impact on Rural America,” published by the Department of Agriculture’s Economic Research Service. However, that same study and Ania Wieckowski’s “Back to the City” in the May 2010 Harvard Business Review concluded that aging Boomers will appreciate urban amenities such as proximity to health care and families, and walkable, active communities. Many Baby Boomers exhibit empty nest syndrome when their Generation Y children leave home. In real estate, this typically is thought to entail leaving behind their large suburban home for smaller, more manageable living quarters in vibrant, entertainment-driven environments.

.....
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  #155  
Old Posted Apr 9, 2011, 4:35 AM
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This trend could have negative effects as well.

As more and more of these chains come into the city, they are turning unique places into basically urban copy's of the suburbs.

Places that used to attract people from outside the neighbourhood are no longer going to be attractions or destinations, as they just become chain infested tiny box stores.

Anyway some chains no doubt are good to have. But I think if this goes overkill as it has in the suburbs, than we are going to be faced with a large amount of dull urban strips. And that could be an economic nightmare, as strips lose their destination status and can't sustain these chain stores on the local population alone.

So I would tread lightly with this back to the city movement of chains.
Because no matter what side of the fence you are on with chains, I think the negatives also have to be looked at here.
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  #156  
Old Posted Apr 9, 2011, 5:02 PM
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New buildings tend to have chains because developers/financiers are more confident that they'll survive, and because they can typically pay higher rents. The same goes at lease renewal time, though the developer/owner will have more discretion then. But over time, a building will tend to have more local stores.
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  #157  
Old Posted Apr 9, 2011, 11:02 PM
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^^ Exactly. Conditions that are ideal for supporting grassroots local businesses are actually fairly rare in a city like Chicago, especially outside of the favored-quarter North Side. In developing areas of the West and South Sides, local businesses have a hard time breaking in, because they can't afford to go in any of the new-construction buildings, and the older buildings aren't there anymore (the commercial strips were hit the hardest by riots, urban renewal, neglect, and demolition). There are some older buildings remaining, but often these are abandoned, or managed very poorly.

New Orleans has a different problem - it never really developed commercial areas outside of downtown. There are a few restaurant strips, and today there is Magazine Street, but none of these can even host the urban-format big-box stores due to restrictive zoning, and smaller chains are reluctant to move in because of the scarcity of on-street parking (new off-street lots are usually prohibited). Local businesses are the only businesses moving in.

Historically, "neighborhood shopping" was a few isolated corner stores in the middle of residential neighborhoods. Any more substantial purchases took place on Canal Street downtown. After Canal was gutted of its shopping and given over to the tourists, people went to the suburbs to shop. Bringing that retail back into the city is challenging because there are very few places that can support it, and those tend to be urban greenfields where it's easier and cheaper to put in a regular suburban-style store.
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  #158  
Old Posted May 5, 2011, 4:48 PM
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Is a Failed Megamall Worth Saving?


May 3, 2011

Read More: http://www.nytimes.com/roomfordebate...-malls-is-over

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Too big to fail one more time? How about too ugly or redundant to succeed? The long-languishing, and design-challenged Xanadu project sparks such thoughts. Even the Mall of America, the largest in the country in 1993, has become an easily ignored part of the local landscape. Rebranded “American Dream@Meadowlands,” Xanadu is highly visible, and abuts an ecological treasure. Perhaps I can offer a comparative context. The Twin Cities’ Mall of America is another mammoth retail complex that Triple Five co-developed. It, too, received substantial public funding – mainly for such infrastructure as access roads and parking ramps. In 1993, it was the country’s largest mall.

- How has it fared? It’s one of several large local retail complexes, and people still seem to go there, now even by light rail, though it’s no longer packed with the Japanese crowds. It lost Camp Snoopy (a Peanuts-themed amusement center), but there’s still an amusement park and around 500 shops. It’s an easily ignored part of the local landscape. As for Xanadu: what can justify such giant retail/entertainment venues now? The U.S. has thousands of abandoned malls, even some quite large ones, like one Twin Cities’ regional mall, which has been empty for some years, looking for new life. We all can and do shop from our computers, which is far more convenient than driving miles to get to, and parking far away from, the things we want to buy.

.....



Construction on the Xanadu mall in the Meadowlands came to a halt in 2009 when its financing ran dry.

http://www.nytimes.com/roomfordebate...l-worth-saving

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  #159  
Old Posted May 6, 2011, 2:24 AM
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Anecdotal evidence sometimes runs counter to statistical evidence. Same reason why the safest streets, statistically, are the ones that seem least safe.

I saw a study (sorry, forget where right now) that suggested that physical and Internet retail are much more synergistic than previously thought.
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  #160  
Old Posted May 11, 2011, 2:30 PM
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Return of the Mall


http://retailtrafficmag.com/developm...mall_05052011/

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.....

“The regional mall has been going out of style for 30 years,” says Richard S. Sokolov, president and COO of Simon Property Group, the Indianapolis-based REIT with the largest regional mall portfolio in the country. “If you just Google ‘The regional mall is dying,’ you’ll come up with hundreds of articles.” But a funny thing happened over the past three years.

- As the Great Recession unfolded, regional malls—rather than being pushed to the brink—weathered the storm better than any of their supposed replacements. The very things that made fortress malls seem so outdated—their size, their enclosed environments, their dependence on anchors—proved to be powerful assets instead.

- Quarter after quarter, U.S. regional mall REITs have outperformed shopping center REITs, beating analyst estimates and occasionally posting NOI growth. By 2010, class-A regional malls shot up to the top of both retailers’ and real estate investors’ list of preferred product types. After bottoming in December 2008, seasonally-adjusted sales-per-square-foot figures at malls have been increasing, according to ICSC Research. The monthly average for 2010 was $386.43 per foot—a nearly $20 per square foot increase from the previous year.

- Malls took some cuts in occupancy rates, but not nearly as much as other sectors. From the first quarter of 2008 through the first quarter of 2011, regional malls experienced a vacancy increase of 210 basis points, according to the CoStar Group, a Washington, D.C.-based research firm. Over the same period, the vacancy rate surged 260 basis points for lifestyle centers and 240 basis points for neighborhood shopping centers. During those years, rents at regional malls fell $0.95 per square foot, less than at any other retail property type, in CoStar’s estimates. Lifestyle centers suffered the greatest fall in rents—a staggering $7.38-per-square-foot.

“The regional mall has never been more vibrant than it is today,” Sokolov says. “It’s an extremely efficient channel of retail distribution. The performance of regional malls has been very consistent, very stable, and as we enter a period of economic growth, the malls are very well positioned to take advantage of it.” Indeed, the very tenants that talked of severing ties with enclosed regional malls a few years ago are returning to the bargaining table. Moreover, some retailers that always favored power and lifestyle centers in the past are now coming around as well, says Lebovitz.

.....



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