In real estate development, one of the continued growing trends is the move towards more mixed-use developments. For those real estate investors looking to invest in older retail centers or office buildings, who don’t have the ability to build-on, blending their tenants into a less-traditional mix could be a path to success.
Dees Stribling has a good look at the growing trend of Tenant Curation in a recent BisNow article, How Curated Retail Fosters Community In A Mixed-Use Development.
Curation implies putting more thought into how a retail property fits into its surroundings, but also how individual retailers complement each other, and how they complement other uses in a mixed-use property. The process is something of a puzzle and involves more than simply attracting entertainment or recreational uses to a site — though those can be important.
The changing nature of retail also means that urban retail in particular needs a more thoughtful approach, Blum said, so that retail works with other parts of a mixed-use development to build community. “We’ve been tracking the changing nature of retail for years, and one of the major recent changes is how retail now needs to be one of a variety of uses at a site that complement each other,” he said.
Large office properties are borrowing the concept. Recently the Altitude Café and Lounge opened in the Willis Tower, part of the effort by the building to add curated retail elements in the context of a major office building.
In purely retail investments tenant mix is crucial. This is especially being shown with the closing down of many smaller malls throughout the country. Real estate professional Taylor Cox has an article on LinkedIn, The Importance of Tenant Curation for Retail Operations, where he breaks down some excellent insights into the importance of tenant mix. Taylor writes,
“How is an ideal tenant mix or a successful curation of tenants achieved? It starts with a sophisticated understanding of what retail offerings are and are not currently well represented in the area under consideration.
Give consideration to where and how the site has favourable positioning relative to other retail options and leverage those advantages. This overall approach is designed to attract retailers that focus more on location quality and are less rent sensitive.”
Taylor’s advice is especially important for any real estate investors looking to capitalize on transforming older malls or retail centers into something more desired by today’s e-commerce driven consumer. Lastly, this article from the London BisNow site, What The Office Sector Needs To Learn From Hotels, Retail And — Wait, What, Airports And The Car Industry?, accutely explaines the number one thing we think real estate investors and developers need to consider in 2018 and looking forward. (Though it mentions office owners…we think it will apply throughout numerous real estate markets including the change in industrial real estate due to e-commerce.
Office building owners are having to start thinking of their tenants as customers, and thus adopt the mindset of designers of products like Apple or Samsung. For those companies, user experience, or UX, is key — a bad UX equals doom for a product. “It is the idea that we are in a market place where you are in competition, and your customer wants to have a good user experience,” Malcic said, elucidating how to go about this. “That goes back to the idea of choreographing space, creating different types of environments, particularly getting the right balance between collaborative and quiet space. You would find that variety of space in hotels or in retail.”