M.S Yearsley and Sons, a True Value hardware store and John Deere franchise opened in 1917 and served the West Chester community from a series of attached 19th century buildings. In 2006 they relocated and the real estate was purchased for redevelopment. This project is a reflection of JL Architects history in mixed -use and infill projects. Today, the site is home to 88 apartments, over 20,000 sf of ground floor retail and restaurants, and over 100 off-street parking spaces.
To achieve that density and increased value, JL Architects supported the team in obtaining zoning changes and adjustments, Historic Review Board approval and the blessing of the community. Those efforts resulted in a site density increase of 100% over its prior allowance.
Our support came in the form of building and zoning code research and analysis, master planning, feasibility studies, sun studies, and expert witness testimony.
The property is now owned and managed by Hankin Group and was constructed by Pancoast and Clifford.
Retail
Adaptive Re-Use to Make Your Retail More Leasable
When Toys R Us, Kids R Us, and Acme Grocery all vacated the Liberty Square Shopping Center in Burlington, NJ, the center’s owners were faced with the challenge of how to lease the empty big box space. Owner’s National Realty Development Corp partnered with JL Architects to re-position the space to market to today’s retail tenants. Success was had with Planet Fitness, Ross Dress for Less, Marshalls/HomeGoods, and Five Below all signing on to join the the center.
John Lister of JL Architects highlights design and structural changes to the center that brought this leasing success.
How to Keep Your Shopping Center Leased
Who remembers getting the JC Penney’s Christmas catalog as a child? Besides having more than enough toys to go around, big department stores had something for everyone no matter the shopping occasion. A family could easily spend an hour or so browsing the store’s shelves, and that’s even before going to the toy section.
Today, the 1-stop-shop department stores are fewer and fewer, creating vacancies in older shopping centers that single tenants simply can’t fill. To keep these centers current, occupied, and profitable, a restructuring of leasing spaces and a façade refresh is needed to attract a wider range of tenants. A current project at JL Architects does just that.
Located in New Jersey, this shopping center had 2 large vacancies, one at 33,000 sf and one at 45,000 sf. To appeal to a wider range of tenants, the building footprint was reduced at the rear wall, and the two spaces were converted to 4 spaces. In addition to reducing the building depth by roughly 11,000 sf, the front elevation was reworked, and tailored to potential tenants.
Currently, this project is under construction, and soon we will turnover the first tenant space for interior work. Our client is anxiously looking forward to a newly occupied shopping center with a fresh look, new leases, and increased profitability.
Brandon Runnels, GGP
Architectural Designer
ICSC in Philadelphia
The International Council of Shopping Centers (ICSC) held its annual regional conference in Philadelphia last week. Attendance was down, but there were deals being done and new contacts made.
The conference included:
- A tour of developments in the Convention Center area, such as PREIT’s redevelopment of the Gallery, rebranded as The Fashion District, and National Realty and Development’s East Market mixed use development,
- Workshops on topics such as where operations and maintenance planning fits into development, women in commercial real estate, and leasing to the cannabis industry.
- Round tables on redevelopment, adaptation of prototypes and updates on opportunity zones.
Some of my take-aways include:
- At every turn, it seemed there was a New York developer looking to get into the Philadelphia market. While the value of real estate in Philadelphia has risen, it still lags the markets to the south (Washington DC) and north (New York). According to Real Capital Analytics, commercial prices in non-metro areas rose at a faster pace in 2019 Q1 than prices in the six major metro areas of New York, Boston, Washington DC, Chicago, Los Angeles, and San Francisco. In March 2019, commercial prices were broadly up by six percent in non-major markets compared to 4.5 percent in the six major metro areas. None-the-less, the non-major markets have lagged over the longer term and present a value while they catch up.
- The death of retail continues to be exaggerated, but you must read past the headlines to understand it. Globest.com reported that the retail apocalypse is driven significantly by a changing business model and investors trying to play the new game by old rules. Since 2010 nearly 60% of major US retail bankruptcies have been driven by overwhelming leveraged buyout debt. Better news is found in the report by research and advisory firm IHL Group. It found that more chains are opening new locations than closing locations. Retail is not dead, but it is different. In the past, the leasing team would call their top 10 contacts, and lease to 8 of them in each center. Now, those retailers are not opening as many and shoppers want more diversity and “shopertainment”. Chris Harden of Cushman & Wakefield points out that retail is evolving. It is not competing with e-tail, rather complimenting it. Otherwise, why would e-tailers such as Warby Parker, Bonobos and Untuckit open physical stores and why would there be B8ta?
- No one wants a 225-foot-deep store and a lot of centers have those big boxes sitting empty. The popular alternative for the closed Kmarts, Sears and Toys R Us stores is self-storage. There are hurdles to overcome such as lease restrictions and zoning issues. At JL Architects, we are working in repositioning a shopping center for National Realty and Regional Construction. It includes a closed ACME grocery store and Toys R Us. The client opted to reduce the size of the building to fit their tenants’ needs. In addition, the “unused” GLA (gross lease area) allows them to develop new pad sites or expand other users in the center.
- Experiential retail (“shopertainment”) has been the leading antidote for many years. The popular notion is to include fitness, arcades, and theaters. Those are easy to pencil because the cost and revenue can be tracked like the good-old-days. Things are changing. There was a movement towards “life style centers” years ago and, like everything else, it is maturing. The next generation of retail is for the destination to include retail and entertainment, but not be exclusively taking place in the leased areas. The ability to track shoppers as they drive by, come to shop, and hang out at the center has shown that in some of the most successful renovations and repositioned properties, not everyone who visits comes to shop or eat. However, the property is still a destination and they come to experience the place. The next generation of life style includes much more than a wide sidewalk, planters, a plaza and benches. It a place to visit, be in and experience. Those visitors create activity. They may or may not shop, but by being in the space, they create interest and attract other visitors who eat, drink and shop.
The greatest successes come from the greatest challenges. There are many opportunities in the market, and this is an exciting time to be in it. The need for creativity has never been greater. Let JLA brings our balance of design creativity and business understanding to your next project.
John Lister, AIA, GGP
Principal
Designing Retail Centers for Resilience
Merriam Webster defines resilience as “an ability to recover from or adjust easily to misfortune or change”, which sounds like the condition of the retail industry.
*For years the death of retail has been reported. Internet sales would make bricks and mortar irrelevant. While we have learned that virtual storefronts benefit from a physical counterpart, there are challenges which need addressing. The days of rolling out shopping center after shopping center is a formula for failure.
For years the thinking was that to combat the internet, more options and inventory had to be stocked, so stores like Best Buy, Target, Walmart, Giant and CVS kept getting bigger. Next came the bigger footprints for grocery stores to offer more variety. Now these same stores are opening with a smaller footprint, and/or closing stores. They are also offering different services – such as CVS adding clinics to their stores and buying Aetna, and grocery stores expanding their prepared foods and catering options.
The markets and the “latest thing” seem to change so fast, that inventory can’t be built fast enough to capture that trend before it has been overtaken by the next hottest trend. The new paradigm is how to make a building “Amazon-proof”. What can you put in the physical that you can’t get in the virtual via 2-day delivery? The quick answer is, “experience”. The more thoughtful answer is, “it depends”.
I don’t know that anyone can say how long a fad will last, but we do know that buildings that keep them warm and dry will outlive them. That is why the buildings must to be resilient. They must be built in a way that makes them marketable when the grocery store closes, or the next big box has joined the great beyond. Can the remaining building inventory be repurposed as a mini-warehouse, rock climbing gym, arcade/bowling center, a health clinic, or even the activity we don’t know exists yet? One constant is that there will always be more 2,000 sf users than 50,000 sf users. The key is to design the 50,000 square foot shell with the resiliency to accommodate 25 of the smaller users when the large one goes away.
Recently we have been designing new shopping centers with limited depth, not because of site conditions, but that the building would not be too deep for the future 2,000-sf user. We have also knocked off parts of buildings to successfully make the space marketable and attractive to prospects. It is a hard decision to lose GLA, but not as hard as having 120,000 sf sitting empty, dragging the whole center down as store after store falls into the black hole the vacant big box or anchor creates.
As your retail center designer, it is critical that we not only serve as your building’s architect, but also make recommendations as to how the center can be best poised for market change. In the case of retail, being resilient means recognizing challenges in the market place and planning thoughtfully, rather than nervously reacting to the ever-changing market forces.
*A list of retail closings in 2018 and 2019 as reported by MoneyWise.com
| Name | 2018 | 2019 |
| Toys R Us | 735 | |
| Mattress Firm | 700 | |
| Rite Aid | 600 | |
| Ann Taylor/Loft / Dress Barn | 547 | 650 |
| Subway | 500 | |
| Teavana | 379 | |
| Bon Ton | 260 | |
| Best Buy | 250 | |
| Sears | 222 | 72 |
| Gap/ Banana Republic | 200 | 230 |
| GNC | 200 | |
| Signet Jewelers | 200 | 150 |
| Kmart | 160 | 48 |
| Michael Koors | 155 | |
| The Children’s Place- | 144 | 45 |
| Vitamin World | 124 | |
| Guess | 120 | |
| Foot Locker | 110 | |
| Brookstone | 102 | |
| Winn Dixie / BI-LO | 94 | 22 |
| Claire’s | 92 | |
| Sam’s Clubs / Walmart | 63 | 11 |
| Abercrombie and Fitch | 60 | 40 |
| J Crew | 50 | |
| Crocs | 47 | |
| Victoria secret | 20 | 53 |
| Macy’s | 12 | |
| Lord and Taylor | 10 | 9 |
| JC Penny’s | 8 | 27 |
| Nordstrom | 44 | |
| Target | 6 | |
| Kohls | 8 | |
| Top Shop | 10 | |
| Z gallerie | 17 | |
| J Crew | 20 | |
| Christopher | 40 | |
| Francesca’s | 40 | |
| Bed Bath and Beyond | 40 | |
| Party City | 45 | |
| CVS | 46 | |
| Lowe’s | 48 | |
| Office Depot | 59 | |
| Destination Maternity | 67 | |
| Performance Bicycles | 102 | |
| Pier 1 | 145 | |
| Starbucks | 150 | |
| Lifeway Christian Store | 170 | |
| Things Remembered | 200 | |
| Chico’s | 250 | |
| Fred’s | 263 | |
| Shopco | 363 | |
| Family Dollar | 390 | |
| Charlotte Russe | 512 | |
| Gymboree | 800 | |
| Payless ShoeSource | 2100 | |
| Total | 6164 | 7292 |
John W. Lister, AIA, LEED AP, GGA
Principal, JL Architects
Fast & Affordable Benefits of a Managed Real Estate Data Base
Commercial real estate is a competitive market, so any advantage an owner can secure enhances the ability to show a return on investment. JL Architects can offer you that advantage through the storage and management of your leasing data.
Benefit #1 – Reduced Cost per LOD and per Square Foot
We are frequently asked by clients to measure and verify a vacant space and prepare a “Lease Outline Drawing”, known as an LOD. LOD’s are used for marketing, or as a lease attachments. We encourage our clients to lower their incremental costs by documenting all available spaces at one time. We use that information to build a graphic database of the entire asset.
Benefit #2 – Free Updated Database
As the deal progresses, the same information is used as the foundation for future construction drawing projects. Once the drawings and construction are complete, that information still has value. JLA uses it to create a perpetual as-built model for your property including the walls, doors, and utilities such as electrical service, gas, water and HVAC.
Benefit #3 – Lower Cost per LOD and Speed to Market
As a case study, let’s use a multi-tenant shopping center. We aggregate all the information about the base building into a single database. As spaces become available, we create LOD’s for those spaces and expand the database. That database is used for new LOD’s as spaces become available, combined or subdivided. That happens in hours, not days, and is at a substantially reduced cost.
Benefit #4 – No More Field Verification Costs
Once the lease is signed we prepare construction drawings for the new tenant’s alterations. Those modifications are added to the database and are ready the next time the space is vacant, or the tenant is relocated.
When a tenant space becomes available, we isolate that individual suite or combine it with others to create a new LOD used for leasing, to generate schematic elevations and renderings, and to ultimately create drawings for the next tenant. When the project is complete, the database is updated and ready for the next deal.
Want to learn how JLA can help you manage your real estate data base? Schedule a free 15-minute call with us at https://jlarchitects-architect.youcanbook.me
Brandon Runnels
Architectural Designer