Developers increasingly take mixed-use approach
Publish Date: March 31, 2016
Office and residential developers are increasingly working with retail property owners and developers to boost profits. CBL & Associates Properties is adding apartments to two of its properties and is also working with Cary, N.C., zoning officials to add nonretail uses to its Cary Town Center project. “It’s market-driven,” president and CEO Stephen D. Lebovitz told investors on an earnings call. “And we’re not converting the malls to complete mixed-use projects, but we are adding different uses depending on the markets. We’re looking at other opportunities throughout the portfolio, and a lot of it depends on having the available land or the capacity to do it. So if we’re able to recapture a department store, then we’re looking at opportunities to add other uses in addition to retail.” Westfield, too, is adding residential units to two of its flagship malls in London.
The mixed-use activity is not confined to the mall sector. Regency Centers announced plans to develop a 46,000-square-foot, Publix-anchored retail component at the 4.33-acre East San Marco mixed-use development, in Jacksonville, Fla. Construction is scheduled to begin late this summer. ArchCo Residential and co-developer Whitehall Realty Partners will be responsible for the overall construction. Jacksonville-based Whitehall has led local efforts and will continue in that role for the duration of the development. Upon completion, ArchCo and its partner Bluerock will own and manage the residential portion of East San Marco, while Regency will own and operate the retail elements.
Some retail developers are doing the mixed-use work themselves. Ramco-Gershenson Properties Trust is mulling over adding office space to some of its future projects, having inherited some mixed-use office space through acquisitions. “We will be very conservative,” said President and CEO Dennis E. Gershenson. “If we’re going to consider building any office, it would have to be significantly preleased. But because we own these larger shopping centers, the whole concept of live-work-play has become more and more an element in people’s lives, especially for the Millennials. So we’ll be selective in what we do, but we certainly are open to the possibility."