The 2007 ICSC Conference on Open Air Centers concluded today in Phoenix at the Arizona Biltmore Resort and Spa with a session billed to highlight the growing popularity of the shopping venue, instead telegraphing what could be its successor.
Most of the panelists for “Strip Malls – Now Open Air Centers . . .Find Out What Retailers are Doing Now” agreed that open-air centers have been overbuilt. The gloomy forecast stems from what they cited as a slowdown in expansion plans by destination retailers such as Target, Williams Sonoma and Restoration Hardware that traditionally anchor the popular centers and whom smaller tenants depend on to draw traffic to their stores.
Their deceleration, Roland L. Mackie, senior vice president of real estate development for Kirkland's Home, indicates that there may be fewer Open Air centers built in the future as landlords struggle to find anchors for new centers and replacements at old ones.
Mackie says he sees the next trend in shopping center development being a combination of a power center and a lifestyle center.
Melissa Boughton, senior vice president for real estate at Regis Corp. agrees.
“The future trend will be some sort of hybrid,” says Boughton.
She also echoed Mackie, telling the attendees that there has been a tremendous amount of development of Open Air centers, typically ranging from 500,000 square feet to 1 million square feet, and that there will be a shakeout soon.
However, two of the eight panelists disagreed.
Aaron Fleishaker, senior vice president for real estate at Avenue/United Retail Group argued JCPenney's strategy of pulling out of their anchor sites in malls in favor of 100,000 square feet standalones is more representative of “overbuilding.”
And, for Golf Galaxy's Peter Harding, senior vice president of real estate, there aren't enough Open Air centers for the retailer of golf equipment and apparel to expand into. The Eden Prairie, Minn.-based company has 65 stores in 24 states and its plans call for opening as many as 20 annually.
Preferring power, regional and super regional Open Air centers, Harding says, “We're always looking for more.”