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Q: What do you anticipate as a driving trend in retail development in 2004?

Little Diversified Architectural Consulting

Bruce Barteldt, Principal: You have got to hope that there will be a release of pent-up demand in the marketplace. No doubt there are a bunch of mid-tier developers out there who are itching to increase their income statements through new development while money is still cheap, but have been waiting for consumer confidence to bounce back in a meaningful way. Let's not forget, the retailers are waiting for the same before they sign on for these new developments. With this in mind, once confidence returns, I would assume that development/construction/openings are going to move at breakneck speed to get the rent clocks ticking (and the cash wraps cha-chinging!). Will there be room for innovation? And will developers want to take risks? I would bet that the majority of development, and therefore trend, will be pretty standard fare — meaning, don't expect a bunch of hybrid malls with department stores. Rather, look for more power hybrids that have more “placemaking” outdoor featurettes. Not very fresh, I know, but there's hope — I think the real trend is going to occur on the tenant side. The freshness of minimalism and simplicity will rule, but beyond the price association of Apple, Armani and Cole Haan. Media bashed, pop-up ads, spam punch drunk, over-hyped — the customer has gotten so savvy to overkill. Retailers have made the move toward clean simplicity — even Target. There's got to be a response from the developer of the “envelope.” Is it possible to create simplicity in the exterior of our centers? In an age where the retail center tries desperately, if not heroically, to be noticed and to differentiate, perhaps the only remaining notion is to keep it simple — and therefore stand out from all the visual noise of what's already out there.

JPRA Architects

James P. Ryan, President: Developers with existing properties will seriously continue to look at strategies to upgrade, expand, diversify, and improve their valued assets. Constant lease and merchandise assessment will be part of a series of methods to retain market share. New developments will be given crucial analysis by evaluating the existing market. No longer can you assume that if you build it, they will come. The good news is that the design bar has been raised, as most developers believe good architecture adds to the consumers' pleasure and escalates the portfolio value.

Omniplan Architects

Stephen J. Winslow, Principal: We expect it to be the revitalization of older mall properties and developing interesting mixed use of underutilized opportunities. Also important will be leasing strategies focused on the hip, young shopper, with such amenities as entertainment (e.g., theaters, games, ice/specialty activity, family restrooms, softplay areas), good food, and fun environments.

Carter & Burgess, Inc.

Greg Moe, Group Manager Retail Centers: Consumers will always drive retail development. In 2004, I see a continuation of the trend towards outdoor lifestyle centers combined with big box retail. Now that consumers have had a taste of seeing these different types of retail in one convenient location, they will not likely give it up. Malls that do not convert to hybrid centers will slowly fade away. If anything, consumers will demand even more variety. We are already seeing in some town center developments such uses as farmers' markets, art festivals, and community sports and recreation. The more successful developers will be the ones who stay ahead of and anticipate these demands. There is a bit of crystal-ball vision in this, and many in the retail industry will have to step out of their comfort zone if they want to be a leader in these trends.

Dougherty Schroder & Associates, Inc.

Kevin Dougherty, President: Redeveloping existing malls to address the lifestyle center trend and mall anchor vacancies will continue to be a trend for traditional mall retailers. We see an increased developers' desire to improve “streetscapes” or consider “demalling” in order to attract stronger leasing. Further hybridization of the “lifestyle center” concept will find more introduction of big box retail and department store anchors as the hottest sites will have been developed and developers will start looking at furthering the concept in “secondary” markets. Strategic alliances between retail and housing developers will likely continue to develop in order to address the desire to create true live/work/play environments.

CMH Architects, Inc.

Everett Hatcher, Executive Vice President: We believe that the trend for 2004 will continue to be the development of “kinder, gentler” projects. The lifestyle format will impact every form of retail from neighborhood to power centers spurred by the popularity of pedestrian-friendly spaces in lifestyle centers, and the desire of almost every community to incorporate new urbanism ideals in the projects they approve. Future retail will be better designed, better landscaped and more reflective of community values. It is likely that communities throughout the country will continue to demand mixed-use projects, even though there have been few suburban mixed-use centers that have been successful. Requirements for retail developments to meet “green” standards will dramatically increase over the next decade.

MCG Architecture

Rick Gaylord, CEO: The driving trend in retail development in 2004 will continue to be the development of outdoor malls that embrace the retail/entertainment/lifestyle nexus. The “demalling” of retail centers has been popular for several years and will continue to gain momentum next year. Interestingly, a large component of this trend is in the redevelopment of traditional malls into open-air retail/entertainment centers. By combining dining, nighttime entertainment and retail venues in a pedestrian-friendly environment, we are creating a new type of destination.

The development of these centers often leads to the redevelopment of entire neighborhoods. Desert Ridge in Phoenix, Ariz., The Creeks at Virginia Center in Richmond, Va. and the redevelopment of Bayfair Mall in San Leandro, Calif., are all examples of outdoor retail/entertainment centers acting as catalysts for the redevelopment of entire neighborhoods.

Morris Architects

James H. Pope, Principal: I see two major trends, each of which is important to the success of the other. The first is finding viable entertainment alternatives to cinemas. Although the market for cinemas is improving, this traditional entertainment component of retail is still overbuilt. We are seeing more intensive entertainment-focused venues moving into retail. An example of this is Wannado, a child-oriented themed experience that allows children to role play in a miniature city. This type of entertainment venue helps define retail projects as destinations.

The second trend is the creation of retail environments with a strong spirit of place. Although the retail markets have done relatively well during this economic downturn, this success has led to a considerable amount of new construction resulting in more competition for leases and customers. The key to success, I believe, is to create retail environments, regardless of type, that exhibit a strong sense of place and therefore differentiates itself in the market. We are seeing more and more retail centers of all types that incorporate features more common to traditional town centers than retail centers, features such as amphitheaters, water features, architectural details reminiscent of old Main Streets and public art that is often whimsical and always accessible. The underlying trend is to create familiar environments that people see not only as safe, but also to evoke a real or imagined image of smaller, friendlier scale.

Perkowitz + Ruth Architects

Sy Perkowitz, President: In the near future, an increasing mix of uses and emphasis on design will continue as a leading trend in retail development. This reflects the urbanization of America, as people evaluating the suburban lifestyle are finding that at times it lacks social interaction and that it is costly in terms of commute and upkeep of a single family home. At the same time, cities, looking to attract residents, businesses and shoppers and are interested in planning communities where people can live, shop, play and work. Large value retailers such as Target and Wal-Mart continue to play a defining role in the retail world, as shoppers of all income levels continue to look for value in their purchases. The same cities that create venues for Main Street-style mixed-use developments, which may include large retailers, are also assembling freeway accessible sites for big box centers. In both of these cases, there is a trend toward emphasizing design and creating a place that can be a community gathering spot.

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