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Developers Glance Into Crystal Ball

SCOTTSDALE--Taking a break from worrying about today's rocky business climate, a small group of owners and developers gathered at ICSC's REvent, to talk about the future of the shopping center industry. Much of the discussion focused on how to extend the industry's initial forays into Green building and create projects that make even greater use of sustainable building techniques.

“Design is the first signal of human intention, we are moving from the rights of humans to the rights of nature,” William McDonough, founding principal of William McDonough + Partners in Charlottesville, Va. told the 75 attendees gathered for the two-day event, formerly called The Leading Edge.

McDonough talked of shifting the design paradigm for buildings from one of cradle-to-grave to what he calls "cradle-to-cradle." The idea is that when designing a structure, an architect should not just have in mind one intended use, but also what might come after the initial tenant has left. One example is a Nike office complex that is designed in a way that it could be easily converted into a multi-family property if Nike vacates the structure.

Also, McDonugh talked of technologies that enable buildings to engage seamlessly with the surrounding environment. For example, a Ford Motor plant in Dearborn, Mich., includes a green habitat on its roof that doubles as a sanctuary for killdeer birds. A Gap Inc. office building in San Bruno, Calif., features a grass roof.

“Wouldn’t it be great if we could produce retail projects that encompass these elements?” McDonough asked. He pointed to the increasing numbers of developers seeking Leadership in Energy and Environmental Design (LEED) certification from the U.S. Green Building Council as evidence that a shift is already taking place.

Still, executives at the show were hesitant to endorse the practices McDonough advocated. “This is an economically driven business, you’ve got to get your return on investment,” said John Hart, chairman, Hart Realty Advisors in Simsbury, Conn.

A fellow panelist on sustainability, Quay Hays, managing partner for Kings County Ventures LLC pointed to the company's $10 billion master-planned community Quay Valley, with two million square feet of retail. He said that project will incorporate green elements at no cost to builders and homeowners. “There is no reason it cannot be done profitably," he said. The 12,500-acre mixed-use development in the San Joaquin Valley in Calif., will be 100 percent solar powered. The project is set to break ground later this year and developers are aiming to get the project LEED certified Silver or higher.

Not all the talk centered on Green design, however. Los Angeles-based retail consultant Janine Sabin said the retail real estate industry's continued success will come from individual properties' abilities to connect with customers. The core fundamentals for retail real estate remain the same: location, profitability, tenants and convenience. However, satisfying those needs has become more complex, said Yaromir Steiner, CEO of Columbus, Ohio-based Steiner + Associates , Inc. After developing single-use properties for more than 40 years, the industry needs to re-learn how to build less specialized formats. “If I can say I’m going to some cool place that is much more than shopping, it makes it relevant,” Steiner said.

“It seems like we have come full circle,” agreed Gar Herring, president and CEO of the MG Herring Group in Dallas. "We’ve been through lifestyle and now we’re into mixed-use.”

--Riccardo A. Davis

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