In San Diego, RAF Pacifica Group is developing
Flight, which will include luxury apartments,
restaurants, ground-floor retail and office space.
company has transformed retail centers into such alternative uses
as farmers markets and has repositioned centers to focus on customer experience and bring communities together. “These types
of projects can transform neighborhoods and bring new vitality to
older centers, she relates.”
LOCAL MARKETS, DIFFERENT TASTES
What works in one market, of course, may very well not work in
another. Take San Diego as an example, says Adam Robinson,
founder and president of RAF Pacifica Group. There, consumers are seeking unique retailers and restaurants and what they
demand in North County may be different from areas in downtown, Old Town and so forth.
“Developers who closely monitor this and look to the con-
sumer to determine what is truly in demand in that market will
have the most success,” he says. Also, he adds, investors that con-
sider the huge shift in lifestyle preferences will also come out on
top. “Consumers are placing an emphasis on convenience, which
is further driving the demand for mixed-use destinations.”
Because society craves instant gratification, walkability is
also important. “Consumers want to be able to run errands,
grab lunch and shop in one trip, and it’s an added bonus if
they can do all of this without even having to get in their cars,”
Here’s another secret to success, at least per Robinson: mixed-use assets tend to perform better in densely populated areas and
THE INCREDIBLE SHRINKING STORE FORMAT
Retailers are quick to note that only 10% to 15% of retail sales occur online. Yet e-commerce is having an out- sized effect on retail—how it is priced, distributed and,
most certainly, how it’s consumed.
“Society has become increasingly mobile and as e-businesses
continue to grow, traditional retailers are changing their approach
to stay in step with the mobile market,” says Jeff Berta, senior
director of real estate development for Structured Development.
One end result is that retailers are responding to changing consumer habits with smaller footprints and, in many cases, more
urban locations, he says.
Target, for example, has been doing this for years with its
flexible-format stores. Even Amazon and other e-tailers are grow-
ing their brick-and-mortar presence in major metros.
What’s been especially curious to watch is the changing function
of these stores, Berta says. “In some cases, these stores are meant
to serve primarily as experiential showrooms, allowing customers
to sample items in person and then place orders that can be deliv-
ered to their home that day—maybe even before they get there.”
If you take this trend to a logical conclusion, wou will start to
see shopping centers and mixed-use developments rise on unde-
rutilized parcels in more densely populated areas, he continues.
“And because individual storefronts will be smaller,” he adds,
“they will house a greater variety of businesses than centers built
10 or 20 years ago—something that will help to draw additional
visitors to the center.”