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Shopping Centers Today -> March 2004
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GGP BUILDING 2 LIFESTYLE CENTERS, PLANS MORE
BY IAN RITTER
When it comes to projects that depart from the traditional mall model, General Growth Properties has in mind more than just Jordan Creek Town Center (see story). As part of its new focus on open-air centers, the company is set to build two lifestyle projects, and it has more in the pipeline.
Joining up with local developer The Pinnacle Group, General Growth is building the 750,000-square-foot Pinnacle Hills Promenade, in Rogers, Ark. The companies expect to open the $100 million project (including a two-level, 155,000-square-foot Dillard’s anchor) in the fall of 2006.
General Growth is also building the $125 million Shops at Fallen Timbers, a 1 million-square-foot development in Maumee, Ohio (outside of Toledo). Dillard’s will anchor this project too. General Growth plans to break ground on Fallen Timbers in the fall and to open in August 2005.
Both projects will boast upscale retailers and restaurants.
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“The lifestyle projects have gained a lot of momentum,” said Bergstrom. “We have to look at these opportunities, because it’s the setting in which people are doing business.”
Some municipalities favor open-air centers, he says, because they aren’t as big as malls, so “the scale of the project is a little less intimidating to them.”
The cost to build one, though, is not much less than that of an enclosed mall. The streetscapes and attention to architectural detail come at a price, he says.
But these types of centers could see better sales per square foot than malls, because people will spend more time at them interacting socially, says David Marks, president of Marketplace Advisors, a Maitland, Fla., real estate consulting firm. Consumers find open-air centers more aesthetically pleasing, he says.
“The quality of the environment is higher,” said Marks. “[Consumers will pass up] a traditional mall to get to this type of environment.”
Deutsche Bank real estate analyst Louis Taylor says he is not surprised that General Growth is building lifestyle and other open-air centers as opposed to enclosed malls.
“This is being driven by tenants who want a lower-cost alternative to a mall,” he said, pointing out that open-air centers have lower occupancy costs than malls.
Another thing developers like about lifestyle centers is that they allow diversification of the tenant mix, Taylor says. He points out, for example, that while grocery stores and big-box retailers are not naturals for a traditional mall, they are drawn to the quick access to parking that an open-air center offers their customers.
There are other mall giants starting to ride the wave. Simon Property Group, the largest enclosed mall owner in the United States, is working on some open-air and lifestyle goodies of its own. The firm has teamed up with Lauth Property Group to build the 570,000-square-foot Clay Terrace, set for a spring 2005 opening, in Carmel, Ind., outside Indianapolis. Simon also plans to build the 1.8 million-square-foot Coconut Pointe, Estero, Fla., which is scheduled for completion in the fall of 2006. Then there is the 1.5 million-square-foot St. John’s Town Center, an open-air center in Jacksonville, Fla., that it expects to open sometime next year.
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