This post is sponsored by PREIT.
Consumer behaviors continue to evolve, meaning those in the retail space need to adapt to shifting client demands. Gone are the days of having limited types of stores or restaurants. Customers are placing more emphasis on experiences and modern spaces that fit into their lifestyles.
Here, we speak with PREIT CEO Joseph Coradino about how retailers can meet these new demands and ways to position retail spaces for success in 2020.
What are some current trends when it comes to redeveloping retail centers? Do you expect those to continue into 2020?
In 2020, owners and developers should look to further integrate concepts that span the consumer lifestyle more broadly, modernizing their appeal. Our most recent development, Fashion District Philadelphia, is a great example of where the retail landscape is heading.
When conceptualizing and creating The District, we focused on creating a variety of shopping options and destination entertainment experiences. After analyzing modern consumers and their needs, we developed the four key pillars -- style, dining, entertainment, and arts and culture -- that guided the project and allowed us to deliver an engaging atmosphere featuring new and innovative tenants, social experiences and activities in a desirable environment.
What makes metropolitan areas different from suburbs or even smaller cities?
The most notable difference is in their accessibility. Metropolitan areas serve residents and visitors, offer numerous modes of public transportation and have highly trafficked landmarks that many suburban towns and smaller cities don’t offer. Because of this, retail developments in metropolitan areas must serve as destinations and landmarks on their own – offering accessibility, convenience, a continually refreshed calendar of events, and tenant diversity to drive traffic and increase the amount of time people visit.
How has PREIT responded to those differences when redeveloping retail centers?
Modern consumers -- no matter where they live -- prefer an integrated lifestyle experience. This concept guides our development decisions both in suburban areas and metropolitan districts. However, the strategy for approaching redevelopment and remerchandising relies on the demographics and psychographics of the communities where properties are located, combined with an in-depth competitive review that ensures we are meeting the needs of our local shoppers.
There are two good examples of this. The first was the opening of Fashion District Philadelphia, a completely redeveloped destination blocks away from city hall. The other was an anchor repositioning at Plymouth Meeting Mall, which is about 20 miles outside of Philadelphia.
Our vision for Fashion District Philadelphia was to create a well-curated, one-of-a-kind destination that blends shopping, dining, entertainment and cultural experiences to create a unique downtown destination that is inclusive, accessible and convenient for everyone.
Beyond offering a diverse array of retail, dining and entertainment experiences, The District is designed to be an integral part of the community. To make art more accessible, The District invested more than $1 million in art and murals by local and world-renowned artists. Guests can also stop by shops such as Uniquely Philly to buy Philadelphia-made products and support small businesses.
By emphasizing more than just retail, we were able to ensure that The District joined Philadelphia’s other attractions as a “must-see” destination for the region’s 43 million annual visitors and is a multipurpose, one-stop-shop for those who live and work in Philadelphia.
At Plymouth Meeting Mall, we set out to improve the property to better serve our current and future consumers. We leveraged 200,000 square feet of a former Macy’s space and completely reimagined it, welcoming five diverse and in-demand concepts: Dick’s Sporting Goods, Burlington, Miller’s Ale House and Edge Fitness and Michaels.
These tenants aren’t your traditional anchor concepts, but they join Plymouth Meeting’s longstanding history of nontraditional offerings, which also include one of nine LEGOLAND Discovery Center locations and one of the first Whole Foods on a mall property.
While Fashion District Philadelphia and Plymouth Meeting Mall are located in two different settings, the constant is the consumer. Therefore, when planning both developments, we took similar approaches to ensure that we maximized day-to-night appeal and delivered an engaging experience.
Are there issues or specific challenges you face in city redevelopment that you don't see in other locations? How do you overcome those?
When developing a property in a metropolitan area, there are numerous challenges that are unique to the location, such as ensuring the development meets a need or demand within the existing landscape, will have a positive impact on the community and is in line with where the city is heading.
Monitoring real estate development trends such as consumer demand, neighborhood growth and potential overdevelopment is critical when launching a project, and the same was true when developing The District. We recognized the opportunity to create one cohesive destination for shopping, dining and nightlife -- a hub that didn’t exist in the city.
Beyond this, we understood how it would contribute to Philadelphia’s landscape and further the transformation of Philadelphia’s Market East neighborhood. Its proximity to major attractions and several key transit stations make it one of the most centrally located neighborhoods in Philadelphia, and The District will help reimagine the area for decades to come.
Joseph F. Coradino has been chief executive officer of PREIT since 2012 and chairman of the board since 2016. PREIT owns and manages a portfolio comprising more than 20 million square feet of retail properties, primarily shopping malls, with a concentration in two top 10 MSA markets, Greater Philadelphia and Washington, D.C.
PREIT (NYSE:PEI) is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT’s robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely-populated eastern U.S. with concentrations in the mid-Atlantic’s top MSAs. Since 2012, the company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures.