FEBRUARY 1, 2016
URBANLAND: THE MAGAZINE OF THE URBAN LAND INSTITUTE
Special Section: Retail
Elkus Manfredi Architects describe their designs for Seaport Square
The growing economic impact of millennials, growing demand for dining, and increasing interest from international brands are transforming the American retail real estate landscape.
“The lifestyle choices of millennials are greatly affecting retail development today,” says Ron Pastore, senior retail specialist and a director at Boston- based AEW Capital Management.
“The shopping center is a product of suburbanization and the automobile —two things which are not in vogue with millennials. New urban retail development, particularly infill locations where people can live/work/play, are more sought after.”
U.S. consumers are benefiting from solid job growth and falling unemployment, which in turn are powering new retail construction, says Mark Zandi, chief economist of Moody’s Analytics and cofounder of Economy.com. “The outlook for U.S. retail real estate is very good over the next two to three years,” he says. “Stronger wage gains will also lift consumer confidence and spending. Lower gasoline prices are also a big plus. That, in turn, will help real estate development.”
Growing demand for space from brands already established in Europe and Asia is also fueling retail development, says Christopher M. Conlon, executive vice president and chief operating officer of Acadia Realty a self- managed equity real estate investment trust (REIT) based in Rye, New York.
“EXKi, an upscale fast-casual restaurant from Belgium, and global coffee house Caffebene of South Korea have recently opened stores here in the United States,” Conlon notes. Belgium’s Le Pain Quotidien has been successful in the United States and is seeking to open more stores, he says. Pret A Manger of the United Kingdom wants to increase its footprint in New York and already has expanded to several areas, including Washington, D.C.
Despite all the worries about the impact of internet retailing, bricks-and-mortar stores are far from passé, particularly for the market segment most sought after by retailers—millennials.