Barron's | Suburbia's New Shopping Look: A Real Downtown

Suburbia's New Shopping Look: A Real Downtown - Barron's

11/18/15, 11:42 AM

Suburbia's New Shopping Look: A Real Downtown I n the growing suburb of Southlake, Texas, which is near Fort Worth and where the average home costs $380,000, a downtown is sprouting. A real, honest-to-God downtown. A downtown that looks like so many small-town business districts of yesteryear: blocks of side-by-side, two-story brick buildings that surround a town square, fountains, and a city hall, second-floor offices that sit above shops, services and restaurants; parking spaces only a few feet from doors; and wide, tree-lined sidewalks.

Known as Town Square, the shopping district is being heralded as a place "where memories are made." The center's developer, Cooper & Stebbins, wants to see families stroll hand-in-hand down the sidewalks eating ice cream. They want weddings in the town square and they want kids to play by the fountains. Mostly, though, they want people to embrace the district as their own and to keep coming back to spend money.

The $65 million first phase of the project, which comprises 275,000 square feet on 42 acres, opened this spring. When complete in 15 years, Town Square is expected to total 2.5 million square feet of offices, stores and hotels over 130 acres for a price tag of $350 million.

"Nobody had a place to shop or eat in Southlake before this; they'd have to go to Dallas to get that experience," says Jack Breard III, vice president of United Commercial Realty in Dallas, the brokerage firm handling the center's leasing. "Now we've created an environment that makes people want to go to Southlake Town Square. They might not know why they're going, but they're going."

Despite its old, small-town appearance -- the architecture borrows styles dominant between the 1890s and the 1950s -- Southlake Town Square is typical of a new style of shopping center being developed across the country. But nothing about them is really new at all, except for their names. They're called "urban villages," "lifestyle centers" or "street-front centers," and they incorporate elements of "the new urbanism."

What all that means is that developers of the new centers want to attract a growing number of shoppers who are turned off by enclosed malls, strip malls and power centers, the retail developments of choice over the past couple of decades. Developers and retailers want to get back to places like Country Club Plaza in Kansas City, Missouri, the often-cited retail development considered the first suburban shopping district in the http://www.barrons.com/articles/SB934585234836624974

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Suburbia's New Shopping Look: A Real Downtown - Barron's

11/18/15, 11:42 AM

country. They want people to feel as though they're in an urban environment that is pedestrian friendly and that offers street-front shopping, even when they're in the suburbs. Those who think and theorize about urban planning, on the other hand, see the centers as a way to save cities -- particularly suburbs -- by creating a "sense of place" or "sense of community" in what are considered sterile settings.

"There's an excitement about being on the street, and we've forgotten that because so many people associate street-front retailing with deteriorating urban strips or dilapidated neighborhoods or suburban strip malls that are really just parking lots," says Michael Beyard, vice president and senior resident fellow for the Urban Land Institute in Washington. "We've forgotten how nice they can be and still are in many European cities. I think we're going to see these street-front retailing centers as a major trend for the foreseeable future."

The so-called urban villages don't follow an established design, but they share common traits. They're smaller than enclosed regional malls, and, unlike them, they're open to the elements. They're found in affluent areas and mostly are associated with the suburbs, but they also appear in uptown urban areas. Urban villages offer a variety of upscale tenants and curbside parking so that shoppers can park just a few feet in front of a store, unlike malls or power centers, which often are surrounded by seas of pavement. Some of the new developments straddle a bona fide main drag; others fabricate a main street that runs close to the shopping center.

Though Country Club Plaza may be considered the first of its kind, Reston Town Center in Virginia is deemed the forerunner of the modern-day return to urbanism. Built in 1990, the shopping and office district has become the main street of northern Virginia, says Chris Mundy, senior vice president of the Northeast region for Chicago-based Equity Office Properties Trust , which purchased Reston Town Center in 1996.

"One of the things that people are looking for more and more is somewhere to go where they can walk down the street and have an entertainment experience, a dining experience and a shopping experience," he says. "It's hard to get that feel in the suburbs, but these projects allow you to feel a little bit like you're walking down the street in New York City.

Obviously, though, you're in a much more controlled environment."

The entertainment concept in the urban village differs from true entertainment centers, in which the tenant mix relies heavily on theaters, music stores, book stores and restaurants. http://www.barrons.com/articles/SB934585234836624974

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Suburbia's New Shopping Look: A Real Downtown - Barron's

11/18/15, 11:42 AM

While such tenants may end up in an urban village, the real entertainment, developers say, stems from just being in an urban environment, watching people or window shopping.

Everett Hatcher, executive vice president of CMH Architects of Birmingham, Alabama, who is working on several of these centers, remembers growing up in the 'Fifties, going downtown and window shopping. That was entertainment back then, he asserts.

"I think urban venues are something that everybody enjoys, whether they're Baby Boomers and remember those days, like me, or are Gen-Xers who haven't had that experience," he says. "You can't design a power center to be pedestrian friendly when you've got hundreds of feet of blank wall towering above you and a vast parking lot next to you. You can't make that a pleasant experience."

Over the past couple of years, a lot of evidence has surfaced suggesting that, compared with trends 20 years ago, shoppers are spending less time in malls and visiting fewer stores. While successful malls still generate solid sales of between $400 and $500 a square foot, developers and retailers see the urban-village design as a way to pull in shoppers who have burned out on malls. They think the successful new breed of shopping centers can also produce those types of sales, thanks to their location and the upscale tenant mix.

Retailers in urban villages also have lower costs compared with mall tenants, says Joel Murphy, president of Cousins MarketCenters, the retail division of Cousins Properties Inc., a retail and office real-estate investment trust in Atlanta. Because these new shopping centers are open-air, construction costs less. In addition, common-area maintenance charges-costs such as insurance, plumbing and cleaning -- will be lower too, he declares.

Cousins MarketCenters, which develops more property than it buys, is pursuing the urban-village concept aggressively and has named its version of the center the Avenue.

Currently the firm is working on projects in California and Atlanta. One of the Atlanta-area projects, a $42 million, 236,000-square-foot center known as the Avenue East Cobb, is scheduled to open in August. Still, the new urban village has failed to quell the company's high regard for power centers, which Cousins MarketCenters continues to develop.

The two concepts are just different, Murphy explains. "We've always tried to be at the forefront of changing retail trends," he says. "We feel that this product type can be something that is very financially attractive to retailers. It gives them a new avenue of http://www.barrons.com/articles/SB934585234836624974

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Suburbia's New Shopping Look: A Real Downtown - Barron's

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growth, but it also creates a new product type for us to add to our portfolio of power centers and office buildings."

JOE GOSE is a free-lance writer.

http://www.barrons.com/articles/SB934585234836624974

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