In 2008 the economy experienced a downturn which forced many retail companies to take a defensive position. This resulted in shopping centers with closed and abandoned retail stores. Some retailers questioned the viability of “bricks and mortar” altogether.
Entering the 3rd quarter of 2013 the US economy is well into a slow, but steady recovery. With this brings profiting retailers back into the commercial real estate marketplace. The market is far from flourishing, making those three most important factors in real estate investment so much more important (Location, Location, Location). The slow recovery has resulted in a protracted “buyer’s market”. For property owners, this has presented an opportunity for acquisitions. For tenants, it has resulted in the opportunity to be more demanding. Owners and developers need to look at every property and identify a Competitive Advantage.
With an abundance of available inventory in direct competition, how do owners create a Competitive Advantage? The answer; Hire an architect! To be specific, JL Architects. The new shopping center acquisition may look the same as it did when the Walkman was the “gadget” of the year. No wonder it was a bargain! The retail market has changed A LOT. But one thing has not, shopping is an experience. It can be a “Discount” experience or it can be a “Value/Luxury” experience. Positioning and presenting a property matched with the desired “Experience” creates the Competitive Advantage.
Well over 50% of JL Architects business has been with retailers, and being in business for 25 years we are well informed on what the market demands. In the last two years our clients have been busy renovating their shopping centers. They approach us with their shopping “Experience” identified. JL Architects looks at the existing asset and leverages what can be kept and what says “this was last renovated in 1972”. After a series of studies, budgets and proposals the property is transformed. Renovations can be as simple as a coat of paint, while others result in a reduction in GLA (gross leasable area), or adding focal point structures and façade updates. Either way the shopping centers have, or will be seeing changes that will benefit the developer, the retailer, the structure itself, and its surrounding community.
Not every property should be the biggest, or most fashionable. There is a space in the marketplace for every type, and price point. Studies show that the appropriate alterations can lead to sales increases in excess of 100% per foot, per over year. What it takes is providing the right setting for the right experience. Call on JL Architects to get you there.
– Nathan Houser