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PROS REVEAL DOS AND DON’TS OF LIFESTYLE CENTERS

BY BRANNON BOSWELL

Mall owners, beware: Let your project slip, and a lifestyle center will pop up nearby to steal your tenants and business, panelists told attendees at ICSC’s CenterBuild Conference in December.

“We go into markets where the mall owner has let its property get old,” said Frederick Collings, SCSM, CLS, executive vice president at RED Development, which specializes in lifestyle centers. “Those are the prime targets for us.”

Even some malls that are adding lifestyle “tails” are doing it wrong, he said. “Major developers are doing these lifestyle add-ons,” he said. “But they tend to make a big mistake and help us. I’m not going to say what that mistake is, because I don’t want to give them the advantage.”

Michael E. McCarty, CLS, president of the community centers division of Simon Property Group, said some lifestyle additions to malls lack the right mix of sit-down restaurants. “Maybe that’s the secret,” he said.

Other developers agreed with the thesis that neglect breeds lifestyle centers. “A lot of today’s lifestyle centers could have been prevented,” said Len Kareska, director of real estate for P.F. Chang’s.

Kareska offered developers advice on landing P.F. Chang’s and other restaurants. “P.F. Chang’s seeks continuity among our customers, so daytime population is the most important factor for us,” he said. Many lifestyle centers are in outer suburbs, which may provide wealthier demographics, but not always the large daytime crowds that a more urban site might provide.

“Adding office components to lifestyle centers helps boost the daytime crowds,” Kareska said. “We don’t want to be in tourist-driven sites. We prefer surface parking to structure parking.”

But Kareska cautioned developers against putting too many restaurants into their projects. “A lot of restaurants are following us around — too many, sometimes. We’re trying to limit the number of seats in developments we go into.” P.F. Chang’s and others are attempting to negotiate exclusivity clauses into their leases, he said, and the trend is also leading to “some upside kicker in percentage rents for restaurants.”