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New Life to Leasing

It's no secret that the shopping center industry is undergoing change after change after exciting, synergistic change. From lifestyle centers to town centers to mixed-use venues, from new urban entities to vibrant retail/residential villages, the face of the industry's future is ever-evolving, starting with the anchor store concept.

From the ascendancy of the “new” anchors to the morphing of traditional major department stores to the rise of new retail brands to accommodate changing demographics, it's a new world in the anchor universe, as new growth markets are giving renewed life to leasing and a new lease to anchor life.

Who are the “new” anchors? Take Target, SuperTarget and Bass Pro Outdoor Shops, add Macy's, Nordstrom, Dillard's and JCPenney, spice it up with some Wal-Mart, add a multiplex cinema and you have the recipe for success at any outdoor center. Target, for example, has become the quintessential crossover store catering to the needs of moms in every demographic, delighting everyone with its creative marketing campaigns and modern, affordable, designer product mix. No matter the community, this store fills the bill, as more and more upscale moms are admitting to its appeal and joining the rest of the family in finding it fun and affordable. With SuperTarget's grocery option, the town center is truly complete, making the center the place to fill every need, but, at the same time, not eliminating the possibility of a gourmet grocer, such as Trader Joe's, Bristol Farms or Whole Foods.

Better still, while women remain the dominant shopping decision maker, some new anchors are making men almost as eager to shop. Bass Pro and Dick's have risen to the top in this anchor category. Bass Pro is known to extend a center's trade area exponentially, a cogent reason to court the brand. At 150,000 square feet, with an outdoor, museum-like ambiance coupled with interactive experiences and unique product mix, it sets a new standard in anchors.

At NorthField at Stapleton in Denver, opening in October, the mix of Macy's, Bass Pro (the first in Colorado) and Harkins Theaters have proven to be positive feature attractions, offering the critical mass in market mix and the incentive needed to reel in the specialty stores and national retailers. Bass Pro has chosen to open its first Southern California store at Victoria Gardens and will also have a presence in Illinois at The Promenade Bolingbrook. Expect the retailer to continue its expansion as an anchor.

The new anchors also include the “old” anchors, morphed into a new format, such as Macy's and JCPenney, which just signed with Sephora to include a mini-store inside the main store. At The Shops at Wiregrass, opening next year in North Tampa, for example, JCPenney's first new-format store in Florida, which opened last fall, is performing way above projections. It boasted the second strongest store opening of the new prototype in a chain that saw a 2005 profit increase of 22.5 percent.

JCPenney has also introduced convenient shopping carts, which encourage quantity purchases.

Nordstrom remains every consumer's anchor of choice, especially in upscale communities where the brand is missing. Wide aisles cater to all kinds of shoppers and are in sharp contrast to Dillard's, also a strong store in every market. While the two offer similar product mix, the delivery systems of the stores couldn't be more different, proving that variety is indeed the spice of consumer life in anchor store positioning. It will be interesting to watch the transformation of May's and Federated stores as they morph into the Macy's brand. At NorthField at Stapleton and at The Promenade Bolingbrook, Denver and Chicagoland are seeing the first new Macy's stores built ground up since the merger.

Not only does the format of the open air center influence anchor leasing, but location, as always, is key.

Gone on the winds of shopping center change, however, are the “old' market designations — primary and secondary markets — and here to stay (for a while, anyway) are the new terms “growth markets” and “underserved markets.” Today, the differentiators are the rate of growth and the presence and proximity (or absence) of town center-style shopping.

Such a market is Lehigh Valley in Pennsylvania, site of the Main Street development, Summit at Lehigh Valley, opening in 2007, a joint venture between Forest City and Bayer Properties. Like most of today's high-growth areas, this one takes its population from the big cities, offering a more affordable, more countrified, more amenable residential option than either metro Philadelphia, New Jersey or New York City. Residents are choosing to trade their 1,200-square-foot apartments in the cities for 3,500-square-foot homes a commuter drive away, at a price that's less than the former home. Such phenomena are happening all over the country — from North Tampa to Mansfield, Texas, from Lehi, Utah to Lehigh Valley, Pennsylvania. Retail must follow rooftops, and it's up to us to make sure retailers understand the needs.

The growth of the new exurbs plus the new Baby Boom plus the retirements of the first Baby Boomers make mixed-use developments the tsunamis of the future, growing faster than we can build them to satisfy demand. In Hallandale, Fla., the blending of Miami and Ft. Lauderdale into one big, fabulous community along the ocean is giving rise to places like The Village at Gulfstream Park, where condos, homes and upscale shopping will surround the newly refurbished, gorgeous Gulfstream Park thoroughbred horseracing track, giving rise to yet another category of anchor: the sporting venue.

Though much has changed in the retail world of leasing, much remains constant. Retailers still require assurances, and it's up to us as developers to promote the promise and successes of the new anchors and new formats, including the sporting venues and civic institutions that are also taking their places as reputable and exciting anchor tenants. But that's yet another story.

Executive Vice President, Forest City Commercial Development.

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