VOL. 132 | NO. 258 | Friday, December 29, 2017
Mixed-Use Defines Retail Real Estate in 2017
By Patrick Lantrip
In many ways, the world of retail real estate was tied to the rise of massive mixed-use projects that continued to grow in both scope and popularity in 2017.
Perhaps no other project in Memphis embodies this concept more than Crosstown Concourse, which held its grand opening in August in the former Sears Crosstown building.
All one has to do is drive down the now-bustling stretch of Cleveland Avenue that fronts the $200 million project’s eastern border to see the effects these types of projects can have on an area.
Among mixed-use projects making news in 2017 was Crosstown Concourse, which opened in the former Sears Crosstown building. (Daily News File/Houston Cofield)
For more than two decades, the Crosstown building sat hollow and decrepit, serving as an example of many of Memphis’ once-great urban centers that were decaying. And while the seeds of reform were planted much earlier, they finally bore fruit in 2017, when residential and retail tenants began to move one by one during the early part of the year.
Now instead of an ode to better days, the buzzing vertical village has become a rallying cry for the adaptive reuse of once-seemingly impossible projects.
“From a retail point of view, the rise of mixed-use projects like Crosstown Concourse and the Tennessee Brewery, which are not retail properties by themselves, but are being built in conjunction with residential or office components, is one trend that we’re seeing,” said Shawn Massey, a partner in The Shopping Center Group’s Memphis office.
“We’re not seeing a lot of stand-alone big retail projects.”
That’s a good thing, according to Massey, because mixed-use projects generally are more sustainable.
Among mixed-use projects making news in 2017 was the unveiling of a a plan for the shuttered Wonder Bread factory. (Daily News File/Andrew J. Breig)
“You’re not relying on being just a shopping destination,” he said, “where shopping centers are more susceptible to an anchor going out of business, somebody closing or simply getting people over there.”
Other example of these types of transformative mixed-use projects Massey noted was Germantown’s Thornwood development, a $150 million project at the northeast corner of Germantown and Neshoba roads that will include upscale apartments, restaurants, retail and a hotel; the 50-plus-acre, $200 million Parkside at Shelby Farms development, which will include a 130-room hotel, class A apartments, townhouses, senior living, offices and retail tenants across 18 mid-rise buildings and at least three towers; and Lakeland’s $375 million Lake District project.
Much like Crosstown, the seeds of the Lake District were planted years ago, but finally began to bear fruit in 2017.
Despite some uncertainty surrounding a decade-old loan that arose in the middle part of the year, developer Yehuda Netanel of Gilad Development Co. got the ball rolling on the project by settling the issue with the lender in November.
Among mixed-use projects making news in 2017 was the $375 million Lake District in Lakeland. (Submitted)
As planned, the mixed-use Lake District development is set to deliver 129,500 square feet of big-box retail space, 149,000 square feet of “Main Street” retail space, two hotels, 360 houses, 220 apartments and an assisted living component.
Netanel anticipates making his first major tenant announcement in early 2018 and the first buildings to be ready by late 2019.
CBRE senior associate Brian Whaley says changes in retail real estate reflects shifts in consumers’ shopping behavior.
“Consumer habits are not what they were 10, 15 or 20 years ago, and retailers are having to adapt,” said CBRE senior associate Brian Whaley.
“For example, the people with spending power are buying homes later and renting more.”
Now, Whaley said, walkability is becoming a driving factor behind the way developers choose to build new projects.
“Retail, restaurants, grocery, office and living all needs to be closer, safer and a more ‘urban setting,’” he said.