CSA_1222

November/December 2022

ICSC New York: SHOW SCOOP Target Goes Big Tech 2023 Preview

THE RETAIL RECONSTRUCTORS

The rise of instant downtowns in affluent suburbs

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Contents VOL. 97 NOVEMBER/DECEMBER NO. 6

COVER STORY

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THE RETAIL RECONSTRUCTORS A look at the developers who are citifying affluent suburbs with new projects combining office, residential, dining, entertainment, parks—and retail.

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TECH

30

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Target unveils out larger-size store format with more space for fulfillment.

From the editor’s desk

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STORE SPACES

SHOW Scoop The big retail real estate show in New York City is back, and so is CSA’s round-up of analyses of the scene, as written by leading developers.

Three emerging technologies that will play a major role in retail in 2023.

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Trending Stores: Direct-toconsumer brands Vuori, Beyond Yoga and Alpha Industries are expanding in brick-and-mortar.

CSA (USPS 054-410; ISSN 0193-1199), is published bimonthly by EnsembleIQ, 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631, on a controlled basis to qualified retailer titles and architects. Real estate and shopping center owners and developers $75 per year. All other non-qualified in the United States: $80 one year; $155 two year; $14 single issue copy; Canada and Mexico: $105 one year; $185 two year; $16 single issue copy; Foreign: $115 one year; $215 two year; $16 single issue copy. Digital edition subscription: $55 one year digital; $105 two year digital. Periodicals postage paid at Chicago, IL and additional mailing offices. P ­ OSTMASTER: Please send address changes to CSA, Circulation Fulfillment Director, 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631. Subscription changes may also be emailed to contact@chainstoreage.com, or call 1-877-687-7321. Vol. 97, No. 2, March/April 2021. Copyright ©2021 by EnsembleIQ. All rights reserved.

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FROM THE EDITOR’S DESK

Top Picks 2022 Nearly three years into the pandemic, physical retail is thriving, proving all those naysayers from a couple of years back wrong.

With more store openings than closings, it’s been a busy year, filled with new formats and concepts from retail giants as well as ones new to brick-and-mortar.

Here are my picks for some of the most interesting store developments in 2022.

•Target: The discounter’s unexpected new store strategy involves a bigger footprint — by about 20,000 sq. ft. — with more space for fulfillment of online orders. Also new: a reimagined store design.

(For more details, see story on pg. 30.)

•Ulta Beauty: The beauty giant capped off a great year by unveiling a new store design that makes it easier for shoppers to find what they’re looking for while also discovering new products.

In one of the biggest changes (and improvements), brands are displayed by category as opposed to price point/sector. There are lots of other new features, including new graphics and visuals, and an overall more aspirational feel.

•Nike Style: The athletic apparel and footwear giant continues to use its deep pockets to open new formats. Part retail, part creative studio, Nike Style (in Seoul, South Korea) blurs the lines between the sexes, with gender-free lifestyle product zones. Throughout the store, QR codes offer augmented reality experiences related to Nike product innovation and surrounding art installations.

•Amazon Style: The online giant’s firstever physical store dedicated to clothing and accessories is a showcase for Amazon’s innovative tech as much as it is the brands (national, emerging and in-house) on display. With two locations (Glendale, Calif., and Columbus, Ohio), Amazon Style

CHAIN STORE AGE

succeeds better than most in combining the personalization and convenience of e-commerce with the immediacy of brick-and-mortar shopping.

•Discount Tire: Discount Tire upends the traditional shopping experience of buying new tires — and having old ones repaired — by putting the customer in the driver’s seat. Its new mobile-focused, drive-through Pit Pass concept, in Flowery Branch, Ga., was inspired by racetrack pit crews. The format is designed to offer customers a fast and seamless drivethrough experience where they can stay in their car from start to finish for all of their tire and wheel needs.

•Savage X Fenty: Rihanna has come to the mall. The pop superstar’s lingerie brand made its brick-and-mortar debut at Fashion Show mall in Las Vegas, followed by several other locations.

The stores are bold and cheeky, awash with bold neon lights in fuchsia, emerald, purple and sapphire hues.

In keeping with the brand’s size and gender inclusivity and body-positive positioning, the metallic mannequins span a diverse range of body types.

•Beyond Yoga: The activewear brand joins the growing ranks of direct-toconsumer companies opening stores.

(The opening coincided with the oneyear anniversary of Beyond Yoga’s sale to Levi Strauss Co.) Its first permanent location, in Santa Monica, Calif., is inviting and warm, with furnishings designed in its signature Spacedye fabric.

•Wilson’s Sporting Goods: Product testing is encouraged at the nearly 110-year-old sports equipment brand’s new location on Manhattan’s Upper East Side. The store, Wilson’s third physical outlet to date, has a multi-use court where customers can try out products. They can also rent select items, with rental fees ranging from $5-$10 per day. The fee taken will be taken off the final price if the item is purchased.

BRAND MANAGEMENT Vice President & Group Publisher, SPECS Chairman Gary Esposito gesposito@ensembleiq.com

EDITORIAL Editor Marianne Wilson mwilson@ensembleiq.com Technology Editor Dan Berthiaume dberthiaume@ensembleiq.com Real Estate Editor Al Urbanski aurbanski@ensembleiq.com Online Editor Jennifer Mosscrop-Setteducato jmosscrop@ensembleiq.com

ADVERTISING SALES & BUSINESS Midwest & South Sales Manager Michael Morrissey mmorrissey@ensembleiq.com East & West Sales Manager Lise Slaviero Groh lgroh@ensembleiq.com Real Estate Sales Manager Al Urbanski aurbanski@ensembleiq.com

EVENTS/MARKETING Program Director Deena AmatoMcCoy damccoy@ensembleiq.com Event Director Melissa Murphy mmurphy@ensembleiq.com Event Coordinator Rita Ruzalski rruzalski@ensembleiq.com Marketing & Event Administration Coordinator Farida Batuta fbatuta@ensembleiq.com

EVENTS/MARKETING Senior Creative Director Colette Magliaro cmagliaro@ensembleiq.com Art Director Michael Escobedo mescobedo@ensembleiq.com Production Manager Patricia Wisser pwisser@ensembleiq.com

SUBSCRIPTION SERVICES List Rental mbriganti@anteriad.com Subscription Questions contact@chainstoreage.com

CORPORATE OFFICERS Chief Executive Officer Jennifer Litterick Chief Financial Officer Jane Volland Chief People Officer Ann Jadown Executive Vice President, Content & Communications Joe Territo Executive Vice President, Operations Derek Estey

Marianne Wilson mwilson@chainstoreage.com

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COVER STORY

Poag Development Group’s La Centerra at Cinco Ranch has become the central gathering place of downtown Katy,Texas.

THE RETAIL RECONSTRUCTORS

Mixed-use developers and mall owner-operators alike are building instant downtowns that appeal to work-at-home millennials—and their empty nester parents.

By Debra Hazel

F

rom malling to demalling to lifestyle centers to town centers, retail real estate in the United States has generationally reinvented itself to compete with urban downtowns. Now, in this transcendent period of retail regeneration, developers have taken to creating downtowns and communities of their own.

The evolution of suburban retail in new towns, especially, reflects a number of significant shifts in demographics and within the industry itself. As many of their parents did, millennials are starting families and moving outside the city in search of more space and better schools. But they’ve proved reluctant to give up the urban lifestyle completely. They want the same quality experiences in Bolingbrook and Plano that they enjoyed in Chicago and Dallas. They don’t want to give up the shopping and dining they had in the city, and they’d like to be able to walk to it, if they could. Meanwhile, COVID-19 accelerated their desire to live closer to where they work.

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Not surprisingly, these millennials’ parents are the other demographic flocking to these tended towns. Now empty nesters, they seek more of the city life they loved as younger adults and less of the nighttime driving they abhor as older ones.

“Not driving into the office every day made it easy to go to the suburbs,” said Steven Levin, founder and CEO of Dallas-based Centennial Real Estate, adding that he doesn’t expect workers to return to the office five days a week anytime soon. “They want the feel of the urban place, the walkability and all of the things that attracted them to urban centers but in the suburbs.”

By adding experiences, parks, local retailers, food and beverage and even medical uses that previously had been eschewed by developers, today’s retail reconstructors are creating new community cores that go far beyond the mixed-use developments of generations past.

“We don’t build projects, we build communities,” said Mark Toro, founder of the Toro Development Company and the NOVEMBER/DECEMBER 2022

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former head of North American Properties’ Atlanta office.

“The other word we don’t use is ‘center.,’ Toro said. We design the spaces so that they’re integrated with the others.”

His new company’s first project, Medley in John’s Creek, Georgia, will be a “gathering place,” said Toro, for a town that was incorporated in 2007, but lacks a unifying core. Plans for Medley’s 43 acres include retail, restaurants, residential units, and office space.

It’s a complete shift in attitude among developers about the role property plays in its surrounding community—one that started before COVID-19 appeared, but one that’s now spreading nearly as fast as the pandemic did.

Class A malls that have included new uses relevant to their audiences continue to thrive, observed Todd Caruso, senior managing director at CBRE, Dallas. It’s the retail properties that are well-located but have failed to execute those shifts that are marked for demolition and reconstruction as instant downtowns. This can include up to 40% of the total mall stock.

“We’re not talking about fixing the mall,” Caruso said. “We’re talking about assessing the real estate where the mall exists and determining what the highest and best use is for that dirt.”

For example, CBRE is involved with L Catterton Real Estate and QIC Global Real Estate’s redevelopment of South Bay Galleria in Redondo Beach, Calif. The May Company-anchored open-air center that cut its ribbon in 1955 and was turned into an enclosed mall in 1985 will be a mixed-use center come 2025.

Its new incarnation will include prime retail, dining, entertainment, residential and creative office components. The new development aims to create a true urban hub that delivers a community-driven and outdoor lifestyle experience.

Recreation and Parks Sometimes, the unifying space doesn’t involve building at all.

Centennial’s re-do of Hawthorn Mall in the Chicagoland suburb of Vernon Hills will include an outdoor park and plaza on three acres of land. In the plans, too, are 310 units of luxury multifamily housing over streetlevel retail, senior housing, a grocery store, and more than 100,000 sq. ft. of open-air retail. Co-working and fitness will complement the enclosed mall experience.

But the real key may just be open space.

“As part of Phase 1 we will create this incredible walkable experience. We will have performances, carts, food areas and activations,” said Centennial’s Levin, who acquired mixed-use specialist Bayer Properties in August. “I consider it to be the best example of taking a 40-year-old mall in a fabulous location, fabulous demographic, and creating a suburban village that is going to be one of the best examples of that in America.”

A park that includes dog runs, farmer’s markets, and more may not pay rent, but CHAINSTOREAGE.COM

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Portman’s Dotan Zuckerman: “Whenever we start a project in a city, I try to find that handful of rock-star retailers and I try to persuade them to join the mix.”

it will attract the community on a more regular basis, offsetting the lack of rent.

“You’re not going to get revenue from a park, although you may sell corporate sponsorships,” Caruso said. “But the park may add to the overall experience. It’s going to draw people.”

It does, however, involve design and programming. A fountain at North American Properties’ Birkdale Village in Huntersville, N.C., (now in the midst of a $275 million reinvention) has been refurbished and extended to add the appeal and draw of a reflecting pool. An amenity becomes a place.

“Ultimately the goal is to lift the tide across the entire center,” said Tim Perry, North American Properties. “That plaza does pay for itself.”

For example, noted Kristin Mueller, president of retail property management for the Americas at JLL, the walkable, 135-acre Halcyon complex in Alpharetta, Georgia hosts some 300 events annually. The events attract the live-work-play project’s residents, shoppers, office workers, hotel guests, and more “We’re building communities,” she said, noting that desire to gather has driven a strong retail comeback postCOVID. “It’s human nature.”

Food and Beverage Restaurants and craft brew pubs have long been key components of these complexes, but appealing to millennials is a lot different. They don’t want the same fine dining options their boomer parents sought in upscale national chains. The result: developers are looking for more unique, chef-driven experiences to attract diners raised accustomed to nearby unique dining. North American Properties worked hard to attract Rumi’s Kitchen to its Avalon property, Perry said.

Centennial’s Steven Levin: “You’re not tearing down the mall, you’re adding to the mall the open-air experience.”

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COVER STORY

Alpharetta, Ga.’s Avalon center (right) helped influence a wave of upscale, suburban centers such as Toro Development’s planned Medley complex in nearby Johns Creek (above).

“It’s his first unit. We’ve since done two of the four Rumi’s that exist, in Avalon and Colony Square,” Perry said.

That doesn’t mean it’s easy, observed Dotan Zuckerman, head of retail development at Atlanta-based Portman Holdings, who joined the company this year after heading up leasing at Hines’s expansive Fenton project that opened this year in Cary, N.C. “It’s definitely the harder approach. It’s easy to load up with a bunch of chains, harder to persuade a chef-driven artist to take the leap,” he said. “You have to build a lot of trust, be disciplined. The deals are hard for us. There’s more tenant improvement allowance and they pay less rent. But when you have that culinary mix right, they add to the guest experience.”

That can result in higher office rents, too, as the amenity becomes more important.

Builders of instant downtowns need not focus on fine dining alone, however. Zuckerman noted that projects should be designed to include areas for delivery services and pickup to help support a growing percentage of takeout restaurant sales that ballooned during the pandemic and has remained at high levels. And quick-service matters, too.

“We can work with smaller operators who can’t afford a full restaurant, but maybe can do a food truck,” Perry said.

Entertainment and Sports Not that long ago, adding a movie theater and perhaps an arcade was sufficient as an entertainment focus for a retail property. No longer.

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“The theaters are gone. I don’t think anyone is building any kind of project with a brand new theater. So, the challenge is what can be that second anchor,” Zuckerman said.

“One solution is the entertainment complex.”

Tenants including Dave & Busters are now being joined by new concepts such as Chicken N Pickle which combine repast and recreation, offering chicken nuggets and pickleball courts, arcade games and bars.

Adding sports such as outdoor pickleball courts can even make a property more efficient.

“It makes a ton of sense, as it occupies land that may not get used for other purposes.

This makes it engaging and useful,” said JLL’s Mueller. “And it brings somebody back time and time again.”

V

Exc Toro Development’s Mark Toro: “We don’t build projects, we build communities.”

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COVER STORY

Local Boutiques Traditional retail does remain an important part of the equation. Many of these centers still rely on national chains for their creditworthiness.

“There is something interesting I’m keeping my eye on.

When you look at retail-centric mixed-use projects, you almost see the same lineup all over the country,” Zuckerman said. “There’s a reason why. Everyone loves Lululemon, for example, and all of the tenants that go with it. But it’s the exact same lineup at these projects.”

Toro Development’s Medley, on the other hand, will not focus strongly on apparel because of its proximity to Avalon, a project Mark Toro developed at North American Properties. But differentiation is important in another way, as well. Some newer properties are looking for the unique and local.

“Whenever we start a project in a city, I try to find that handful of rock-star retailers and I try to persuade them to join the mix,” Zuckerman said. “It’s a challenge. The reason they’re special and loved is that they only have one or two — they don’t have [a goal] of hundreds of units.”

Too much reliance on national names also risks problems when one leaves.

“We knew lifestyle centers were attractive aesthetically, but if those tenants ever left, how are you going to convince local tenants to take a location? Some of those local tenants require those things,” Caruso said.

Pop-ups are another answer, at least to some degree, Zuckerman added. They fill space that’s often not desirable

North American Properties’ Tim Perry: “Ultimately, with plazas, the goal is to lift the tide across the entire center.”

to permanent tenants.

“Another idea is creating a district with incubator space. It’s more thoughtful and strategic, he said. “Or build out a smaller storefront and go after a local jewelry maker or artist. It helps a startup or small business owner get their business growing without the credit an institutional mall owner may look for, while helping to create an interest environment in the project.”

Even shorter-term leases are helpful.

“It refreshes the street-level experience, so five-year or one- or two-year terms and pop-ups are preferable,” Toro said. “The shorter the term the better, because the health and welfare of the tenant is unknown at the outset. Relevance is the new credit.”

Former Bayer chief Jami Wadkins, left, and Whitney Livingston now collaborate at Centennial.

Bigger, Fewer, Stronger One trend supporting the creation of these new, integrated communities has very little to do with the communities themselves. Mall operators are consolidating with experienced mixed-use developers to help guide their development plans going forward.

In August, Centennial Real Estate acquired Bayer Properties, long a noted developer of retail-centered mixed-use locations such as The Summit at Fritz Farm in Lexington, Ky., and Bridge Street Town Centre in Huntsville, Ala. Then in October, Simon Properties took a 50% stake in Jamestown, developer of Buckhead Village District in Atlanta and Raleigh Ironworks in North Carolina, a former steel fabricating mill that now combines retail and office.

“Consolidation is a big driver of what is going on, and it takes a lot of different forms,” said Kristin Mueller, COO, property management at JLL. These include the ownership of assets to drive growth (such as Centennial’s Bayer purchase), with the new ownership finding themselves diversifying into new sectors.

Owners themselves are consolidating how they deal with management, by working with fewer, larger outside vendors.

JLL, for example, recently entered into a mixed-use and management strategic partnership with Poag Shopping Centers. Poag will provide development and redevelopment services for JLL-managed centers across the U.S., while JLL will provide management and operational services to Poag’s high-end, open-air lifestyle centers.

“In a way, we’re outsourcing what we secondarily do,” Mueller said. “Owner-operators want to know that they are partnering with a team that is best in class.”

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Medical Uses Wellness also is a focus, though the new tenants go far beyond a simple nail spa, gym or dentist office. Tenants such as One Medical at Fenton looks more like a resort and attracts an affluent clientele who will cross-shop.

Well beyond what many call the “medtail” phenomenon, the redevelopment of the former Landmark Mall site in Alexandria, Va., will include an actual hospital from the Innova Health System, even as partners Foulger-Pratt, The Howard Hughes Corp. and Seritage Growth Properties will redevelop the remaining portions of the location into retail, residential, commercial and entertainment.

“It will all live and breathe together,” said Caruso of CBRE, which is working on the project.

Communities Even so, it sometimes isn’t easy to convince suburban municipalities that densification is a good thing. They cite concerns about overcrowding schools, traffic, and more.

Even parks can be a problem.

“They resist it at first. It wasn’t

necessarily accretive to municipalities, which thrive on sales tax,” Caruso said. “Now they recognize the value.”

Essentially, developers have progressed from creating projects to creating lifestyles. Take a potential weekend at one of these new communities, as imagined by Levin.

“You can walk to a great outdoor brunch experience with your dog, read the paper, then listen to music for two hours on a Saturday morning from 9 a.m. to 1 p.m. That’s what people want to do,” he said. “That type of project is going to be the most desirable place created in America going forward. You’re not tearing down the mall, you’re adding to the mall the open-air experience — the residential, the walkability and the food and beverage experience.”

And for many, it’s making the industry fun – and profitable — again.

“We all do it because we’re passionate about it,” Mueller said. “If we can take a space and make it a place that people want to be, the profits will follow.”

JLL’s Kristin Mueller: “If we can take a space and make it a place that people want to be, the profits will follow.”

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NEW YORK

SHOW SCOOP KEN VOLK

on the value of short-term tenants GEOFF MASON on the mall’s new manifestation

FRED MENO on planning for the unknown

JOSEPH F. CORADINO on why malls are the intersection of life + commerce

BRANDON ISNER on ‘omnichannel’ losing its meaning

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DON GHERMEZIAN on mall as medium

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LEADERS

KEN VOLK

on the value of short-term tenants Ken, Macerich led the retail real estate industry with a programmatic system for short-term leasing.

Tell us about it.

QuikSpace is Macerich’s proprietary digital platform that makes short-term leasing of retail space at our top-performing properties around the country as easy and user-friendly as renting an apartment or booking a vacation home or hotel room. Retailers seeking short-term leases of up to 12 months can search and explore available spaces online via interactive maps and photos, take virtual tours, and then book their space via our convenient, frictionless platform.

We’ve simplified every aspect of the short-term leasing process.

Tenants now have access to research and are able to visit and tour spaces without leaving the comfort of their homes or offices. Most retailers like to visit a location more than once, and QuikSpace allows them to visit multiple times with no hassles.

How does Macerich’s QuikSpace benefit national retailers?

Bringing what’s new and fresh to our properties consistently drives traffic to our destinations and this absolutely benefits national retailers. All aspects of our specialty leasing and business development programming – kiosks, carts, pop-ups, and temporary inline stores, as well as on-site advertising and promotions – deliver newness and fresh experiences, which attracts shoppers. This includes everything from time-limited entertainment attractions like Candytopia or Michelangelo’s Sistine Chapel. It’s great for local concepts experimenting with first-ever mall locations as well as favorite brands, such as the Lexus Experience now at Tysons Corner.

Another important benefit for retailers is the convenient tenant portal that is part of our QuikSpace platform. After signing their leases, tenants have secure, easy access to manage their accounts, submit information and documentation, receive announcements from Macerich and more. Macerich is one of the first major retail property owners to use a tool like this.

What’s been one of the hottest uses for QuikSpace in its early stages?

The most successful retailers today are using their stores for so much more than just in-store shopping, and QuikSpace technology supports this. For example, top brands are doing more with options like buy online and pickup in store, and for this they often need more storage space. We’re successfully utilizing QuikSpace 14

across the portfolio for one-click storage leases with existing tenants, including major national retailers.

What does QuikSpace – and specialty leasing in general – do for the Macerich portfolio?

Specialty leasing and other types of ancillary revenue generation contribute to overall performance for Macerich, including supporting occupancy and net operating income. Our CFO said recently that specialty leasing is a key segment of our business that will be back to pre-COVID levels this year, which is a big achievement. As well, temporary tenants that we successfully convert to permanent uses are an important component of our growth now and moving forward.

“Specialty leasing is a key segment of our business that will be back to pre-COVID levels this year.”

Has it driven up specialty leasing for the holidays?

Specialty leasing for Macerich is firing on all cylinders during the fourth quarter. Again, we’ll hit pre-pandemic levels this year thanks to our high-quality portfolio, strong teams, and great technology, including QuikSpace. We’re bringing guests all kinds of exciting short-term activations and programming during the holidays.

As an industry veteran, what do you think retail and real estate companies have learned over the past couple of years that they are putting into action now?

People are coming to Macerich’s top-quality regional town centers for all the fantastic in-person experiences they missed these past couple of years. This is especially true during the holidays.

From getting up close and personal with Santa and enjoying live musical performances as part of a crowd to hand-picking great gifts and indulging in celebratory meals at our restaurants. People are ready for classic holiday experiences, and Macerich and our retailers are delivering on all this and more.

Executive VP Ken Volk guides all facets of significant revenue-generating business development programs at Santa Monica, Calif.-based Macerich.

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LEADERS

GEOFF MASON

on the mall’s new manifestation

O

ne of the definitions of the word “manifest,” in the American Heritage Dictionary, is “Clearly apparent to the sight or understanding; obvious.”

For decades, Unibail-Rodamco-Westfield’s Garden State Plaza has been the manifestly major mall in Paramus, N.J., the New York Metro’s epicenter of retail. Drive for two miles down its central artery, Rte. 4, and find either side festooned with openair centers, power centers, and malls. Just seven miles from the George Washington Bridge, Paramus is awash in traffic emanating from New York City and the Hudson River Valley, as well as New Jersey. But while the town provides just about every amenity possible to the 26,000+ people living in the community, there hasn’t been a true downtown where people can come together; where they can socialize and meet their daily needs.

That’s about to change.

URW has embarked on a bold plan to completely reimagine the intersection of retail and urban placemaking. We are forging innovative partnerships to elevate our flagship shopping centers to iconic landmark destinations. This means investing heavily in the best assets, in the best markets, to create new town centers where people come to live, shop, work and play.

We’re very excited to bring our vision of creating landmark destinations to Westfield Garden State Plaza. In August, we partnered with Mill Creek Residential as our co-developer of a recreated GSP that will have 550 luxury apartment homes, a town green, and a “Main Street” outdoor district featuring restaurants and everyday conveniences and services as the first phase of a larger master plan.

To be successful, today’s residential developers (and office developers post-COVID) must build their own amenity bases.

People are no longer willing to drive 30 minutes to go to a shopping center or a gym or a restaurant. Ideally, they want to walk to them. And they want it to be a highly social experience, integrated with the lives of others.

That’s why we’re building residences and green spaces within one of the most amenity-packed properties in the nation. Down the road, we will significantly upgrade an existing transit hub to easily allow residents to commute to Manhattan and return home to three acres of open green space on land reclaimed from old parking spaces and converted to plazas, community gardens, and integrated with the restored brook.

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In the Chicago area, we’re bringing new residential to Westfield Old Orchard which is a premium outdoor center in in Skokie, Ill., that is on the higher income end of the demos in Chicagoland and is close to Northwestern University.

Old Orchard’s gardens were inspired by the nearby Chicago Botanic Garden and are lined with native plants and trees. It’s the site of the annual Uncorked food and wine festival, a Music in the Park summer series, and the incredible North Shore Art Festival featuring works for sale by nearly 100 local artists.

These existing gardens and festivals are being further enhanced with the recently opened Louis Vuitton--a first to market—and a

“We are forging innovative partnerships to elevate our flagship shopping centers to iconic landmark destinations.”

Bloomies store that will be just its second location in the United States. We are also in the process of repositioning the former Lord & Taylor building.

As we enhance our vision for iconic landmark destinations, we are going further to create micro-cities, introducing and integrating new uses like office, residential, and entertainment. This consolidates the needs of everyone into our already rich amenity base and ensures we have created true social centers.

It would be very time-consuming and expensive for developers to try to recreate the amenity base that we already have. It’s easier for us, with our prime locations, to take some of them and open them up to the outside world. We’ve done the hard part.

Geoff Mason is the Executive VP of development, design, and operating management for Los Angeles-based Unibail-Rodamco-Westfield.

NOVEMBER/DECEMBER 2022

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REIMAGINING THE FUTURE

A NEW DOWNTOWN EXPERIENCE UNLIKE ANY THING ELSE

Exceptional retail, dining, commercial and residential spaces plus the beautiful outdoors.

W E S T F I E L D.C O M

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LEADERS

JOSEPH F. CORADINO

on why malls are the intersection of life + commerce

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alls have changed and will keep changing, but one thing remains constant. They are often the heartbeat of their communities. A place where people can congregate for events, get what they need and, now, get things done. We call it the intersection of life + commerce. It’s about supporting all the elements of our customers’ daily lives and, in turn, delivering repeat foot traffic for all of our tenants and business partners.

At PREIT, we have focused on this for some time. We have called for the need to re-entrench ourselves as a key facets of the communities we serve. We have added critical elements to the mix. We offer high-level dining and every form of retail – including formats not often found at the mall.

We have grocery anchors at more than a third of our malls.

Twelve percent of our portfolio is off-price and fast fashion. Soon we will have two medical facility anchors, and 14% of our tenants are dining and entertainment. We have distinguished our portfolio from traditional malls as we continue to evolve our properties, taking key steps to broaden customer appeal and enhance the value of our assets.

We are seeking to curate a tenant roster that compels visits.

We do this by incorporating local, small, and diverse businesses.

We welcome experiential tenants, value retail, and digitally native brands in addition to select non-retail uses.

Local, small and diverse businesses are a cornerstone of PREIT properties, authenticating the local vibe. We are proud to offer a variety of programs suitable for these early-stage businesses including cart locations, temporary stores, pop-ups, showcases and more. We are particularly proud of the work our team has done in attracting black and brown-owned businesses, a key area of focus for us. Over the past year, we have increased the presence of these businesses by 17% to 139.

Experiential tenants have become a staple in the modern mall.

We have been adding sit-down dining experiences to our properties for the past 16 years. Since then, however, the inventory of uses interested in locating at the mall has dramatically increased.

Mall entertainment is no longer just movie theaters. We now have fully tactile, family-friendly experiences peppering our portfolio such as Dave & Buster’s, Tilt Studios, Legoland, small format arcade experiences, fitness centers, and more. We are looking forward to welcoming the next generation of Lego Discovery Centers at Springfield Town Center and our first Tilted 10 at Willow Grove 18

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Park in Pennsylvania in 2023, helping both centers cement themselves as mustsee destinations in their communities.

Value Retail has historically been found in the open-air centers.

But as these retail brands continue to find favor among more segments of the consumer community, they are seeking the best location in a market, which often is the mall. Having replaced obsolete department stores with more sought-after tenants, value retail and fast fashion brands now comprise 12% of our portfolio. At Dartmouth Mall in Massachusetts, for example, we replaced a Sears store with Burlington and Aldi. At Moorestown Mall in New Jersey, we replaced a Macy’s with the region’s first HomeSense and Sierra, then topped off the box with Five Below and Michaels! Offering what is called the “thrill-of-the-hunt” experiences, these tenants drive repeat trips and memorable experiences for our shoppers.

Digitally native brands are increasingly aware of the value of the physical store for connecting with and engaging consumers, arguably a more effective marketing channel than increasingly expensive digital avenues. Warby Parker, which went public last fall, announced plans to open 40 new stores this year on a base of about 160. That’s 25% growth. Other digital natives opening stores include Purple; Gap’s Athleta brand, which plans to open 30-40 new stores on a base of 227; Fabletics, which expects to open 30 new stores on a base of more than 70 stores, and Allbirds, which is planning 16-17 new stores on a global base of 35.

The fact is that the mall is the place to merge what people need to get done with what they really want to do. The owners of thousands of malls across the United States must introduce new uses and experiences that can captivate, create convenience, and compel repeat visits from residents and visitors.

“We have called for the need to re-entrench ourselves as key facets of the communities we serve.”

Joseph F. Coradino is the chairman and CEO of Philadelphia-based PREIT.

NOVEMBER/DECEMBER 2022

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T L

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THE INTERSECTION OF LIFE + COMMERCE. Meet us at NY ICSC, booth 1E15 to learn about our one-stop destinations to shop, live, play, dine, stay and work.

For more information or to get more detail about our portfolio of properties, visit us at preit.com.

FOLLOW US:

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@PREIT

@preit

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LEADERS

JOSH POAG

on the birth of Poag Development Group

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or a company like Poag Development Group (previously Poag Shopping Centers), which developed the first “lifestyle center” in America” and originated that term, creating places and spaces that people want to visit and spend time in is one of the key principles on which our Memphis-based company was founded.

Poag specializes in designs that prioritize vibrant public spaces along with experiential tenants: environments conceived and created with opportunities for people to leave their homes and to socialize. That place-making expertise remains the basis of Poag’s identity as it begins to shift its focus from management to development, a strategic decision designed to unlock new development and redevelopment opportunities nationwide.

It is a move made possible in part because of a recently announced partnership with Chicago-based JLL, the largest thirdparty retail property management company in North America. This alliance will enable Poag to focus on its award-winning development services, as well as provide development and redevelopment services for JLL nationally. As of now, JLL handles Poag’s management and leasing services.

This partnership positions us to capitalize on our strengths and broaden our horizons into new markets. Poag has the capital and capabilities, the resources and relationships, and the experience and expertise to create and sustain some of the most memorable, engaging, and commercially successful environments in the country.

At a time when the industry is evolving and embracing a wider range of new mixed-use formats—and when retail is all too often an afterthought in a mixed-use project—Poag’s demonstrated ability to create and optimize memorable and profitable retail environments is more relevant and more in need than ever. We want retail to be the focus that creates the branding and personality for a development. Crucial in the mix are exciting experiential tenants that make the property more alluring and drive value to all the other tenants.

For a company that has developed more lifestyle centers than

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any other, adding new projects to an expansive portfolio that already includes a wide range of successful retail and mixed-use destinations in states across the country is an exciting new opportunity. Our alliance with JLL will extend Poag’s portfolio into an abundance of new markets.

Being able to rely on JLL’s national footprint and local market experts is invaluable, and we are thrilled to be able to seek out promising new projects on a national scale.

Since allying with JLL, we’ve acquired The Shops at Somerset Square, a 113,422-square-foot lifestyle center in Glastonbury, Conn. Other current projects include the redevelopments of

“We want retail to be the focus that creates the branding and personality for a mixed-use development.”

Rosedale Center in Roseville, Minn., and the retail portion of The Rise, a 50-acre makeover of Vallco Mall in in Cupertino, Calif.

Poag’s leadership team has developed and redeveloped lifestyle centers, malls, and grocery-anchored centers. We’ve also worked on some of the largest and most complex mixed-use developments in the world. Our partnership with JLL will enable us to make better and wider use of the value we’ve provided to retailers for more than three decades—and that’s our signature ability to translate small details into big experiences.

Josh Poag is the president and CEO of the Memphis-based Poag Development Group.

NOVEMBER/DECEMBER 2022

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Small Details.

Big Experiences.

Poag Development Group is bringing our expertise to the shopping center of the future, mixed-use retail destinations, offering our clients unmatched expertise to steward their centers forward in the years to come.

Visit us at booth #2219 at NYC ICSC.

PoagDevelopmentGroup.com

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LEADERS

STEPHEN LEBOVITZ on retail’s resilience

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hen I think back over the last several years, the word that comes to mind as it relates to our industry is resilience. Despite facing an increase in online shopping, economic headwinds, or a global pandemic, this industry has an uncanny ability to move forward no matter how many times it gets set back.

For years, newspapers and websites led with headlines predicting the death of brick-and-mortar retail, and during the COVID-19 pandemic, that drumbeat got louder and more frequent. But as it turns out, absence does make the heart grow fonder and when malls reopened, they reopened to crowds, and lots of them. In many ways, the pandemic accelerated closures that ultimately allowed the industry to emerge healthier than where it started.

Strong retail centers and strong retailers got stronger.

The pandemic certainly wasn’t the only challenge the industry has faced in recent memory. Retailers and mall owners were evolving long before March 2020. As retailers have changed over time, CBL and other mall owners, reinvigorated our centers with new uses that attract new customers and keep traffic flowing for longer hours across every day of the week. Savvy traditional retail brands such as Target, Best Buy, and many others took advantage of their physical locations for BOPIS services and as last-mile distribution bases for their online business. In doing so, they demonstrated the value of a physical presence to direct-to-consumer retailers that are now expanding their own brick-and-mortar footprint.

Our top priority is to draw traffic to our centers, and doing so used to be much more formulaic. Now the approach is marketspecific, based on the unique needs of the communities that our properties serve. In many respects, the business has become more creative and fun, and we find ourselves exploring uses that we would have never considered just five years ago.

As part of this shift, we filled two empty anchor spaces with casinos at Westmoreland Mall and York Galleria, both in Pennsylvania. It was a bold move, and one we had reservations about initially. Not anymore. Both malls have extended their market share and traffic has continued to increase double digits, far exceeding pre-pandemic numbers. Demand from other entertainment users such as Main Event, Dave & Busters, and Tilt has remained strong as these are complementary to the existing mix at our properties. Other uses that we are actively adding across

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our portfolio – uses that were previously unthinkable as part of the standard mall tenant mix – include hotels, multi-family, office, fitness, and medical.

Though many of our new uses have been non-retail, traditional retailers remain a critical part of the mix. In October, we opened a new Von Maur department store at West Towne Mall in Madison, Wis., to an overwhelming reception from the market. And we’ve continued to see demand from tenants like Dick’s Sporting Goods and Nordstrom Rack, as well as regional apparel retailers like Rose & Remington, Palmetto Moon, and Hollie Ray Boutique.

“Curating tenants is now marketspecific, based on the unique needs of the communities that our properties serve.”

We’ve opened pop-up shops and eateries that allow small businesses to test the waters, while benefitting from co-locating with national brands like H&M, American Eagle, and Victoria’s Secret.

This opportunity, coupled with guidance from our retail experts, allows business owners to realize their dreams of opening their own brick-and-mortar retail store.

It’s not just retail that’s been resilient, so have the communities in which we operate. The community is at the heart of our business, and we’ve worked hard to strengthen our partnerships to build a mall experience that’s inclusive, where every member of our community can feel a sense of belonging.

They say that the only constant in life is change, and that adage certainly applies to retail and commercial real estate. As we look to the future, and the possibility of an economic downturn, I am confident that our industry will dig deep, find the resolve that has served us so well in the past, and innovate to chart the course of our future.

Stephen Lebovitz is president and CEO of Chattanooga, Tenn.based CBL Properties.

NOVEMBER/DECEMBER 2022

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MEET US AT THE MALL. In the past 5 years, CBL has completed nearly three-dozen redevelopment projects totaling over three million square feet. Our dominant properties continue to attract non-retail uses, with a pipeline including:

25 Restaurants |

11 Non-Retail |

6 Entertainment |

5 Medical |

3 Hotels |

See what else is in store.

Meet a CBL representative at ICSC 2022 on Level 3, Booth 1521 to learn more. www.cblproperties.com

CBL PROPERTIES

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LEADERS

FRED MENO

on planning for the unknown

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uch has changed in the retail real estate industry over the past several years. After a decade-anda-half of having too much retail gross leasable area chasing too few retailers, COVID, as well as other market factors, initiated a purge that helped the industry remove a lot of that excess GLA. That survival-of-the-fittest cleansing has allowed strong-performing properties and retailers to become stronger.

Yet physical retail’s societal role in the fast-changing 21st Century remains in flux. After emerging from a complete shutdown, we find ourselves confronted by high inflation, escalating interest rates, and destabilizing geopolitical events. We remain challenged to create a sustainable long-term plan for positioning shopping centers to best attract and satisfy a new generation of consumers.

Let’s consider the present situation. We anticipate that landlords will seek higher rent bumps during this inflationary period to account for increases in center-level operating expense as well as to provide a commensurate return on capital, given our current interest rate environment. Historically, pro forma rent increases in the 2%-to-2 ¾% range have been the standard. But going forward, we are anticipating rent bumps of 5%-to-6% until inflation dissipates.

The occupancy cost sweet-spot for retailers has generally been in the 10%-to-13% range, but higher rents, absent a corresponding increase in tenant sales, will drive occupancy costs up.

That said, certain sectors of physical retail are steadily advancing. For instance, grocery-anchored centers did well during the pandemic and continue to flourish. Grocers themselves have done an excellent job expanding their concepts to offer a wide variety of price-point options and to better cater to different demographic shopper segments—at the same time maximizing omnichannel opportunities.

Outlet centers, too, are doing well, and they will continue to be resilient during times of economic contraction. These centers have typically been located 40 miles or so from a population hub. Newer outlet centers are now positioning themselves closer to population masses and seeking more local traffic with a heavy concentration of unique, locally owned tenants.

Regional malls continue to be challenged. Eighty-five percent or so of distressed mall loans that have gone back to lenders have been sold and cycled back out to the private sector during the past 10 years, and many of these malls will need to be redeveloped.

Active buyers of distressed regional malls have now become sellers themselves as they look to raise capital to acquire the next distressed real estate product type-CBD office buildings.

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Which malls stay and which go often is dependent upon the property’s debt structure and the ability for that debt to be restructured or re-financed in an environment of declining mall valuations. Whether you’re a mall REIT or a private investor, you may have a property with a loan maturing in a year and you may be underwater on that loan. The mall owners/borrowers then have to make a choice: Do they consider that mall to be a viable core property worth ongoing capital investment? If not, the likelihood of the property going back to the lender is far greater, especially if the loan is non-recourse.

Tenants have become sensitive to committing long-term to properties in distress.

For malls to survive, landlords need to be committed to a level of capital spending that maintains the integrity of the property’s physical plant, attracts synergistic tenants, creates and maintains an inviting shopping environment, and is advertised and promoted to best compete with other shopping venues. Unfortunately, over the past 10 years many buyers of distressed regional malls have been taking the exact opposite operating approach by bleeding the property’s cash flow and not re-investing in the asset. We are now starting to see anchor tenants that own their own parcel within a distressed regional mall looking to protect their brand image and their investment by considering an acquisition of the mall itself to avoid being held hostage by a buyer that lacks the ability and the intention of improving the property’s operating performance.

The retail industry today is truly a “Tale of Two Cities,” full of haves and have-nots. To paraphrase Dickens, “It is the best of times, it is the worst of times.” There are great challenges, but also great opportunities. The operators that emerge successfully will be the visionaries who are best at planning for the unknown.

“The retail industry today is a “Tale of Two Cities,” full of haves and have-nots. To paraphrase Dickens, “It is the best of times, it is the worst of times.”

Frederick J. Meno is president & CEO of Asset Management and Asset Services at the Fort Worth-based Woodmont Company.

NOVEMBER/DECEMBER 2022

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OPERATING REGIONAL MALLS, OUTLET CENTERS & OPEN-AIR SHOPPING CENTERS 138 SHOPPING CENTERS IN 31 STATES EXCEEDING 23 MILLION SQUARE FEET

OAK COURT MALL

PARK PLAZA MALL

NEWGATE MALL

MALL AT TUTTLE CROSSING

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SHOPS AT OSHKOSH

Memphis, TN In Memphis’ Most Beautiful Businesses Hall of Fame Small/Large Shop & Anchor Spaces Available Leasing Info: bdyer@woodmont.com/tcutting@woodmont.com

Ogden, UT Located off Wall Avenue and 36th Street Small/Large Shop & Anchor Spaces Available Leasing Info: jmastin@woodmont.com/bdyer@woodmont.com

Troutdale, OR Located 15 Minutes East of Portland & Portland Int’l. Airport Small & Large Outlet Spaces Available Leasing Info: tcutting@woodmont.com/jmastin@woodmont.com

VISIT US IN BOOTH #3006

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Little Rock, AR Premier Shopping Center Anchored by Dillard’s Flagship Store Small & Large Shop Spaces Available Leasing Info: bdyer@woodmont.com/tcutting@woodmont.com

Dublin, OH Serves Dublin, Hilliard, Columbus, Arlington and Grove City Small/Large Shop & Anchor Spaces Available Leasing Info: tcutting@woodmont.com/lmccommons@woodmont.com

Oshkosh, WI On I-41, between Green Bay and Milwaukee, near Lake Winnebago Small/Large Shop & Anchor Spaces Available Leasing Info: tcutting@woodmont.com

property management receivership services tenant representation landlord representation investment sales capital markets development

11/16/22 2:10 PM

LEADERS

BRANDON ISNER

on whether the word “omnichannel” is losing its meaning

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lthough there may have once been a distinction between the two, omnichannel sales have become synonymous with “retailing.” Given that the trend for several years was to pit brick-and-mortar retail against e-commerce, smart retailers have always known that the mastery of one makes them better at the other.

The savviest retailers, those who have mastered multiple sales channels, are experiencing significant growth. For example, Lululemon is enjoying double-digit growth in both same-store comps and e-commerce business. But how exactly are these companies doing it? Here are three ways that omnichannel retailing has accelerated over the last three years.

1. Mobile App Concentration: We’ve seen mobile app use rise sharply in recent times. Shoppers realize that they have more information and choices than ever before and have the freedom to shop whenever and wherever they want. By providing different touchpoints, retailers are able to provide the ideal shopping experience for a range of shoppers. For example, if a retailer schedules a special “discount day” at their store location, they can launch a similar offer on their local app, providing the same opportunity to consumers who might not be able to make it to the store that day.

Companies expect app usage to accelerate. People now spend over four hours a day on mobile apps—so much so that mcommerce is forecasted to be the dominant share of digital sales within the next five years.

2. Drive-Thru Expansion: The popularity of drive-thrus among quick-service restaurants exploded during the pandemic.

According to a study by the NPD Group, orders at drive-thrus in the United States grew by 20% from February 2020 to February 2022.

Irving, CEO and founder of Fingermark, estimated that drive-thrus accounted for up to 90% of a restaurant’s revenue following the initial COVID-19 outbreak and recovery.

Long gone are the times when drive-thrus simply served on-site customers. Now, people use drive-thrus in multiple ways: on-site ordering, ordering through mobile apps in the form of click-andcollect, or ordering through a third-party delivery service.

Many QSRs, which were traditionally not drive-thru-oriented, have adapted by building out sites with multiple drive-thrus to handle various connection points. Panera, Shake Shack and several others are mostly seeking drive-thru-ready sites.

3. Expansion of Logistics Networks: Retailing is more than selling goods on store shelves. To be successful, a modern warehouse

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network must be in place in order to fulfill orders from all channels. The industrial real estate sector has recently been one of the biggest stories in commercial real estate, with record-low availability, prodigious rent growth, and a robust development pipeline. The primary driver of this performance has been retailers occupying more warehouse and fulfillment space.

Retailers have been responsible for 35% of industrial leasing in 2022, year-to-date, when factoring in the food and beverage and general retail and wholesale categories.

Some retailers have mastered their supply chain to the point of marketing their services to others. Gap Inc. has begun offering its logistics network to others as an additional source of revenue, which they call GPS Platform Services. With 13 distribution centers and more than 9,000 employees in their network, they can fulfill same and two-day delivery, as well as international shipping. In addition, they offer reverse logistics services, which is critical around the holiday season as detailed in CBRE’s 2022 Holiday Trends Report.

Looking Ahead: Although many still aren’t sure of the metaverse as a sales channel, several retailers are investing in virtual worlds to plant strong roots for what could emerge as the next step in the evolution of the omnichannel process. We have already seen music events, fashion shows and the release of branded virtual goods in the metaverse, so what will be the next step?

Retailers are building metaverse-based touchpoints through activities such as games and meet-ups. Some may view these efforts as a novelty, but retailers are viewing them as a critical foundation to establishing their next-generation digital presence.

McKinsey & Company predicts that the metaverse could generate $5 trillion in value by 2030.

Conclusion: Although not all retailers will master the omnichannel approach, the term “omnichannel” may be retired in favor of simply “retailing.” As we observed during the pandemic, retailers that master the multichannel approach will find themselves more resilient to market conditions and more successful in the long run.

“The term ‘omnichannel’ may be retired in favor of simply ‘retailing.’”

Brandon Isner is head of Retail Research for the Americas at CBRE NOVEMBER/DECEMBER 2022

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LEADERS

DON GHERMEZIAN on mall as medium

Don, American Dream has activations that few centers could host. Live Nation! musical events, home ice for the Metropolitan Riveters hockey team, drawing vast crowds for appearances of celebrities like MrBeast. What makes this possible?

American Dream is designed with multiple spaces to accommodate events and large crowds. Our common area courts are multi-level and by design were created with MrBeast type events in mind. We also have a partnership with iHeart Radio where we invite talent to host meet and greets and record podcasts.

Our NHL-regulation rink has been converted to a concert venue, convention space, soccer field, graduation hall, and most recently an event space for the FIFA World Cup Trophy Tour by Coca-Cola.

Our parks are designed for large-scale concerts. Our newest event space, known as Dream Live, is about to launch and will be dedicated to hosting traveling exhibits and shows.

Do you have a written strategy for the pursuit of such special attractions?

We are hitting more than 20 events monthly. Our goal is to have multiple events on a daily basis. We have a dedicated events department with subdivision—each one dedicated to a specific demographic. We have a team dedicated to celebrity events and special interest events such as fashion, sports, food, art, music, and charity. We have teacher appreciation events, military events, hockey tournaments, monthly local hero awards program, book signings, merch drops, project graduations, large scale concerts, conventions, talent shows--practically anything you can imagine.

Do you have any other such special events in play?

Our leasing, marketing, events, and sponsorship teams along with all of our staff members--whom we call Dream Makers-are imbued with the motto that American Dream is limitless and open to all creative ideas. My teams are empowered to dream big and to pursue new and unique concepts. If the concept doesn’t exist, we will create it. For this reason, American Dream has oneof-a-kind and multiple first-to-market concepts.

We know from previous discussions with you that all of these activities are predicated on driving traffic to your tenants. How do you get them involved?

Attractions are strategically placed at American Dream so that our CHAINSTOREAGE.COM

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guests walk past our retailers upon entering and exiting. In addition, our attractions drive new and off-peak traffic, including tourists, who stay longer and have higher spends. We love to get all our retailers involved—whether it’s Saks activating in The Garden with beauty demos or giveaways from our Wheel of Win throughout the holidays. We offer our tenants the opportunity to incentivize and reward their top customers with tickets to our attractions, private dinners, and so much more.

American Dream is able to take retailers beyond their four walls and into the fabric of the property.

Is that what led Hermès and Zara to lease such expansive spaces?

Executives at Hermès are true visionaries and understood the vision of American Dream from the very beginning. They are leaders in the luxury fashion space and together we are expanding the luxury retail experience. We partnered with Hermès on creating an upscale holiday market in The Avenue for VIP customers. Since initially opening, Yves Saint Laurent has doubled its space to create a two-level flagship similar to Hermès. And we recently announced a two-level Gucci flagship. Tenants understand the need to evolve and create new experiences for customers.

“American Dream is definitely not a traditional mall. I think of it more as an “All.”

Triple Five has a world-famous property called Mall of America. If you could come up with a proper appellation for AmericanDream, what would it—in one word—be?

You’re right. It’s definitely not a traditional mall. I think of it more as an “All” and as a “Dream.” American Dream is a one-of-a-kind destination that cannot be found anywhere else. We are just at the beginning of the American Dream’s full experience. Stay tuned for some major entertainment and expansion announcements.

Don Ghermezian is the CEO of Triple Five Group and American Dream.

NOVEMBER/DECEMBER 2022

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WHO’S IN THIS AISLE

Booth Briefs PREIT

CBL Properties

Located in some of the East Coast’s top markets, PREIT’s dynamic and compelling portfolio is built for the future. Having incorporated unique entertainment destinations, fresh dining options, and new and differentiated anchor offerings, our properties are epicenters of activity for their communities. Visit our booth during the ICSC New York Deal Making Conference and learn about our robust presence in top markets and how our diversified tenant mix drives traffic and attracts new-to-market tenants.

See how our work having replaced 19 department stores with over 40 cutting-edge tenants, the addition of apartments, hotels, grocers and more drives sustained growth for our partners.

CBL’s properties offer far more than just a place to shop. Each mall serves as an active community partner by combining retail, a variety of dining options, entertainment and events, services, health and wellness offerings, and so much more. Prime locations, excellent access, and infrastructure drive the consistent demand that allows our malls to evolve quickly and meet the needs of the community. See what else is in store. Meet us at the mall. Visit a CBL representative at ICSC New York on Level 3, booth #1521.

BOOTH #1521

S TA N F O R D B A S S B I O LO G Y C A F E

BOOTH #IE15

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Woodmont

Poag Development Group

When it comes to retail and real estate, there is no substitute for experience. At Woodmont, we are experts in all aspects of the retail lifecycle – from development, brokerage, leasing, and tenant representation to capital/investment sales and asset management. For over 42 years we have been headquartered in Fort Worth, Texas. We have development projects, tenant assignments, and asset management properties nationwide, and have over 150 nationally recognized professionals and dozens of partner companies. Woodmont specializes in every aspect of commercial real estate, managing and brokering tens of millions of square feet with new projects always in the pipeline including build to suit packages. To learn more about our company and how we can help you, visit www.Woodmont.com.

More than three decades ago, Dan Poag and his business partner Terry McEwen founded the predecessor to today’s Poag Development Group, Poag & McEwen Lifestyle Centers.

They coined the term “lifestyle center” to describe what is now the most in-demand retail real estate design. From creating engaging and experiential environments, to understanding the way retail elements connect to residential, office, and other uses, Poag’s signature ability to translate small details into big experiences creates spaces and places that resonate with comfort, convenience, and connectivity. We invite you to visit the Poag booth on-site at the ICSC New York Deal Making Conference. To learn more about Poag Development Group, visit ww.poagdevelopmentgroup.com.

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STORE SPACES

Target Goes Big

Discounter unveils unveils larger-format store, updated design

By Marianne Wilson Target Corp.’s latest new store strategy involves a bigger footprint, with more space for fullfillment of online orders.

At 150,000 sq. ft., the discounter’s new large-format store is more than 20,000 sq. ft. larger than a typical Target. The company said the new concept, which it unveiled in a new location in Katy, Texas, would be its primary focus in the coming years even as it continues to open stores of all sizes.

In addition to the larger format, Target has reimagined its store design, with a more open layout and new elements to better serve customers and employees, and advance the chain’s sustainability goals. The larger stores also support the retailer’s same-day fulfillment services stores-as-hubs strategy for digital fulfillment.

Starting in 2023, more than half of Target’s approximately 200 full store remodels and almost all of its approximately 30 new stores will include elements of the new design. Beginning in 2024, all of Target’s remodels and new stores will feature the majority of the reimagined store design elements.

Target said it leveraged years of research and learnings to create the updated store design and evolve its store strategy to debut the expanded footprint. The move to a larger box comes after the chain has been expanding its small-format store concept as it looks to reach even more shoppers in urban neighborhoods and on college campuses.

Optimized Space: The new layout has a backroom fulfillment space that is five times larger than previous stores of similar size.

The additional space will be optimized to support the ongoing digital growth Target has experienced. Its stores fulfill more than 95% of the retailer’s digital orders and same-day services account for

Target unveiled its new format in a newly redesigned store outside of Houston, Texas.

more than 10% of overall sales.

In addition, the larger stores will offer Target’s full assortment of merchandise, including expanded food and beverage, exclusive brand partnerships and a curated mix of owned brands and national brands.

Design: Target’s updated store design includes a number of new elments, including: • Increased light and natural elements: Larger windows and a more open layout will bring in more natural light. The design infuses elements such as plants and regionally sourced reclaimed wood to create a welcoming space.

• Localized design features: Target will pull in community-focused elements to each store’s design, from native landscaping on the exterior to localized product offerings.

• Built-in sustainability: The retailer’s stores and operations play a pivotal role its goal to achieve net zero emissions by 2040. Future new stores and remodels will include updates such

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as natural (CO2) refrigerants to help lower the retailer’s emissions and EV charging ports for its guests. Many locations will include rooftop solar.

•Enhanced team spaces: To serve its employees when they are off the sales floor, the new design has flexible rooms that can be rearranged to serve the team’s varying needs, offer comfortable furniture options such as booth seating and more.

“With our reimagined store design and larger store footprint that better supports our same-day services, we can give guests more of what they love while incorporating features that build on our commitment to sustainability, community and helping all families discover the joy of everyday life,” said John Mulligan, executive VP and COO, Target.

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TRENDING STORES

Vuori

Vuori, the activewear brand that draws inspiration from the active California lifestyle, opened its first New York City location, in Manhattan’s SoHo neighborhood. The 5,000-sq.-ft. store is also Vuori’s largest location to date and its first flagship on the East Coast. The company is bullish on brick-and-mortar, with more than 100 store openings planned for the next five years. Vuori currently operates 30 physical stores, with locations set to open in Chicago, Dallas and Las Vegas. … Amazon is expanding its

dive into fashion retail in the physical space. The company has opened its second Amazon Style store, at Easton Town Center in Columbus, Ohio. The format is designed to combine the personalization of e-commerce with the immediacy of brick-and-mortar shopping. Amazon debuted the concept last May at The Americana at Brand, Glendale, Calif. … Shein, the China-based fast-fashion giant with a global customer base (the U.S. is its largest market) has opened its first permanent store, in the Harajuku fashion district of Tokyo. Shoppers can browse the displayed clothing and scan QR codes that allow them to make purchases online with the Shein app, with the items delivered to their home or office. The 2,160-sq.-ft. space has three fitting rooms and an Instagram photo booth, and can be modified to host fashion shows and designer events. Shein is planning to open distribution centers in the Midwest and California. It already has a center in Whitestown, Ind. … Streetwear and cannabis lifestyle brand Cookies SF opened a five-story retail storefront in Manhattan’s Herald Square, across from the Macy’s flagship. The store sells the brand’s signature apparel and accessories along with a variety of legal CBD products made from Cookies’ signature growers. Cannabis educational classes will be held at some future date. …

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TRENDING STORES

Beyond Yoga

A year after it was acquired by Levi Strauss & Co., Beyond Yoga unveiled its first permanent location, in Santa Monica, Calif. A second store, at Irvine Spectrum Center in Irvine, Calif., is due to open later this year, with more on the horizon. The Santa Monica space is designed to reflect the softness and strength of the brand’s fabrics,

with curved walls and archways, with chairs and couches done in Beyond Yoga’s signature Spacedye fabric. …

Canada Goose is expanding its U.S. footprint. The luxury outerwear brand opened two new locations, at The Shops at Wynn Las Vegas, and at Denver’s Cherry Creek Shopping Center. The Vegas store features the brand’s signature “snow room” where customers can put the brand’s products to the ultimate test amid temperatures that reach as low as -10°F as well as a daily snowfall. …

Military-inspired apparel brand Alpha Industries opened its first brick-andmortar store, a 3,000-sq.-ft. pop-up in a landmark building in Manhattan’s SoHo neighborhood. Designed by the Lionesque Group (an MG2 studio), the store reflects the 60-years-plus brand heritage — Alpha was founded in 1959 as a contractor to the U.S. military. More than 1,000 feet of

orange Paracord rope, originally used for parachutes, is suspended from the ceiling, holding racks of bomber jackets and puffer coats. The fitting rooms, inspired by military barracks, were designed inside and out in Woodland camo, arguably the most recognizable camouflage pattern in the U.S. Military. Other military accents are found throughout the space, which is open through January.

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TECH

Retail Tech 2023 Three ‘next-gen’ technologies that will come of age

By Dan Berthiaume

The year 2022 brought with it a return to many pre-pandemic shopping habits.

Traffic in returing to — and, in some cases, has exceeded — pre-pandemic levels at brick-and-mortar stores.

Today’s shoppers, however, carry with them elevated expections for the type of omnichannel convenience, inventory access and the lack of friction they enjoy online.

In response, retailers are increasingly adopting technologies that use digital, virtual, and artificial intelligence capabilities to meet the needs of constantly connected shoppers expecting a hybrid experience. Here are three prime examples of technolgies that are expected to play a major role in 2023 and beyond.

Metaverse – getting real with virtual customer engagement Walmart is among the latest retailers to make a splash in the metaverse.

The discount giant recently launched two new metaverse experiences on the popular Roblox immersive digital gaming platform. Both spaces offer original interactive content and entertainment.

Walmart’s metaverse entry is the latest signal that the metaverse is developing into a legitimate retail commerce channel.

Virtual products that customers can use in the metaverse are a big business and retailers can make very real money selling digital metaverse items. Specific advantages to this type of commerce include the lack of overhead related to physical store or supply chain operations.

Retailers are also discovering that the metaverse can serve as an e-commerce platform for physical products. For example, early metaverse retail pioneer Pacsun operated a multifaceted digital commerce effort at the ComplexLand 3.0 metaverse event in May. Once a shopper found the virtual metaverse CHAINSTOREAGE.COM

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Walmart’s new Roblox experiences signify the growing importance of metaverse retail.

version of the product that they wanted to buy, they were directed to the Pacsun website to purchase the physical version of the product.

Non-fungible tokens (NFTs), or unique digital assets stored on a blockchain ledger that certifies the owner, are another metaverse phenomenon which retailers are increasingly exploring.

In many instances, retailers are utilizing NFTs to create digital collectors’ items that can be sold or used for promotional purposes. But in an interview with Chain Store Age, Adryenn Ashley, global blockchain influencer and co-founder of the Billionaire Zombies Club decentralized NFT art community, explained how retailers can unlock greater value from NFTs. “An NFT is much more than a JPEG file and a serial number,” said Ashley. “You can build a community with NFTs.” Ashley recommended that retailers place an NFT portal in their consumer apps which have already been

downloaded, and then create a custodial wallet inside the app by offering an NFT tab where users make digital payments.

“Retailers can deliver gated content there,” said Ashley. “You can geolocate NFT users on your app and reach them via their phones with push notifications.

It’s also worth noting that as of early November 2022, Amazon has only offered limited public demonstrations of its metaverse capabilities in India. But it’s hard to imagine the company ceding metaverse commerce ground to Walmart (or anyone) for long.

Warehouse automation — hitting a supply chain groove At the same time that customers are expecting immediate, omnichannel accessibility to products, ongoing global supply chain disruption and a continuing U.S. labor shortage are making fast, efficient fulfillment more challenging than ever.

In response, retailers as varied as H&M, Kroger and Boot Barn have all deployed

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TECH warehouse automation solutions that use artificial intelligence (AI) and robotics to streamline fulfillment workflows while reducing the number of required human workers. For example, at Boot Barn’s 140,000-sq.-ft. Wichita distribution center, employees can now scan and load SKUs into the system to ship products out in right-sized boxes instead of packaging by hand. This reduces the likelihood of damage and increases packaging efficiency, helping the retailer alleviate labor shortages.

But one of the most notable deployments of the type of warehouse automation programs set to become a major retail technology trend in 2023 is the “Customer Experience Center” model that Gap Inc. has been slowly but steadily refining and rolling out for the past few years.

The specialty apparel retailer recently opened its newest such facility in Longview, Texas. The 850,000-sq.-ft. distribution center is outfitted with robotics systems and automation technology.

It will supplement Gap’s six existing distribution centers in North America, including those in Fresno, Calif.; Phoenix; Groveport, Ohio; Gallatin, Texas; Fishkill, N.Y; and Brampton, Ontario.

With the addition of its new Longview campus, Gap’s fulfillment center network will have capacity to process an additional 1 million units per day, making for a total of more than 4 million units per day during peak season.

Earlier this year, the company also expanded operations at its customer experience center in Fishkill, N.Y., adding automated receiving, multi-level pick modules and enhanced returns processing capabilities. Also new: additional residual shuttles and automated storage retrieval systems.

Gap claims an order accuracy rate of 99.8% and 99% on-time, ready-to-ship performance. By no coincidence, the retailer is automating warehouse operations as it is moving to a business model driven in large part by e-commerce. Gap has publicly stated in earnings calls that it is planning for e-commerce to account for about half of its sales by fiscal 2023, which begins in February.

Internet of Things Monitoring – constant awareness, without the human effort Internet of Things technology enables almost any object or device to continuously sense, collect and report data from its environment using Internet connectivity.

While IoT solutions such as “smart fridges” that can automatically detect when key products are running low and reorder them have received a lot of publicity, IoT monitoring of the retail environment is a strong growth area moving into 2023.

Karl’s Fishing & Outdoors’ store at Mall of America features product from parent company Catch Co.’s portfolio and other fishing and outdoor brands.

Catch Co. is the operator of two ecommerce brands: Mystery Tackle Box, a monthly subscription box of lures and tackle, and Karl’s Bait & Tackle, a membership-based e-commerce platform. (Karl’s recently opened its first two brick-and-mortar stores). The company is deploying in-store solutions that include IoT from RetailNext to optimize store operations in real time.

By integrating two RetailNext AIpowered systems, Traffic 2.0 and Aurora, the retailer is obtaining access to actionable behavioral insights in the store.

Utilizing Aurora, an IoT sensor that combines human activity recognition with deep learning capabilities, Karl’s Fishing & Outdoors’ store managers can seamlessly gather and analyze key customer metrics such as visit duration, unique traffic and visit frequency.

Equipped with this information, Catch Co. management is looking to create a

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data-driven store experience that feels individually personalized to each shopper. With a better understanding of shopper traffic and direction of travel upon entrance, the company also seeks to improve merchandising decisions and enhance in-store marketing campaigns for optimal customer experience and profitability.

To date, Catch Co. reports it has been able to beat initial sales targets by 200% within one week of opening the Karl’s Fishing & Outdoors store.

Meanwhile, Wisconsin-based regional grocer Festival Foods is ensuring food safety and minimizing shrink with SmartSense IoT technology. In an interview with Chain Store Age, Joe Laufenberg, asset protection senior director, Festival Foods, explained how and why the retailer utilizes Bluetooth IoT sensors from SmartSense to automatically and continuously monitor the temperature of coolers, refrigerators and chilled cases in all of its stores.

The Bluetooth sensors continuously take in temperature data, which is then transmitted to gateways that collect the data and send it to a centralized SmartSense database, he said. Gateways operate with battery backup and cellular technology, so that even in the event of a power or network outage, they can still collect and transmit data in real time.

As a result, Laufenberg said that the frequency of temperature-controlled product loss at Festival Foods is down substantially since the retailer implemented the SmartSense IoT solution. In addition, headquarters staff remotely monitoring the SmartSense database can see when storebased equipment is starting to show early signs of problems and notify store personnel to act to prevent serious issues.

“We can look at the data and see trends, as well as opportunities to improve,” said Laufenberg. “Before, we wouldn’t know there was an issue until an employee went out and checked the products, by which time they may have already been damaged. Our process was reactive; now it’s proactive. Losses due to food temperature issues have decreased 80%.”

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Statement of Ownership, Management, and Circulation 1 Publication Title: Chain Store Age 2 Publication Number: 0054-4100 3 Filing Date: 10/1/2022 4 Issue Frequency: Bi-monthly 5 Number of Issues Published Annually: 6 6 Annual Subscription Price: $80 7 Complete Mailing Address of Known Office of Publication: 8550 W Bryn Mawr Suite 200, Chicago, IL. 60631 8 Complete Mailing Address of Headquarters or General Business Office of Publisher: See No. 7 9 Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor: (Publisher) Gary Esposito, Publisher, see No. 7; (Editor) Marianne Wilson, Editor in Chief, see No. 7 10 Owner (Full Name and Complete Mailing Address): EnsembleIQ, see No. 7; 11 Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of Bonds, Mortgages, or Other Securities: None

12 Tax Status (The Purpose, Function, and Nonprofit Status of this Organization and the Exempt Status for Federal Income Tax Purposes): Has Not Changed During Preceding 12 Months 13 Publication Name: Chain Store Age 14 Issue Date for Circulation Data Below: Sept/Oct 2022 15 See Chart Below 16 See Chart Below 17 Publication of Statement of Ownership for a Requester Publication is required and will be printed in the November/December 2022 issue of this publication 18 Signature and Title of Editor, Publisher, Business Manager, or Owner: I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties): Julie Ball, Manager. Sept.28, 2022

Sections 15 and 16

Average No. No. Copies of Copies Each SIngle Issue Issue during Published Previous 12 Nearest to Months Filing Date

15 Extent and Nature of Circulation a Total Number of Copies (Net Press Run) b Legitimate Paid and/or Requested Distribution (1) Outside County Paid/Requested Mail Subscriptions (2) In-County Paid/Requested Mail Subscriptions (3) Sales Through Dealers and Carriers, Street Vendors, Counter Sales, and Other Paid or Requested Distribution Outside USPS (4) Requested Copies Distributed by Other Mail Classes Through the USPS (e.g., First-Class Mail) c Total Paid and/or Requested Circulation d Non-Requested Distribution (By Mail & Outside the Mail) (1) Outside County Non-Requested Copies (2) In-County Non-Requested Copies (3) Non-Requested Copies Distributed Through the USPS by Other Classes of Mail (4) Non-Requested Copies Distributed Outside the Mail e Total Non-Requested Distribution f Total Distribution g Copies Not Distributed h Total i Percent Paid and/or Requested Circulation

19,723

19,574

12,301

14,166

0

0

0

0

0 12,301

0 14,166

6,853 0

4,871 0

0

0

569 7,422 19,723 0 19,723 62.4%

537 5,408 19,574 0 19,574 72.4%

0

0

12,301

14,166

19,723

19,574

62.4%

72.4%

16 Electronic Copy Circulation a Requested and Paid Electronic Copies b Total Requested and Paid Print Copies (Line 15c) + Requested/Paid Electronic Copies (Line 16a) c Total Requested Copy Distribution (Line 15f) + Requested/Paid Electronic Copies (Line 16a) d Percent Paid and/or Requested Circulation (Both Print & Electronic Copies) (16b divided by 16c x 100)

I certify that 50% of all my distributed copies (electronic & print) are legitimate requests or paid copies.

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