Shopping Centers Today

APR 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 45 of 83

buzz, fosters a sense of community, offers a built-in fan base and creates a sense of community within the property," said Chris Weilminster, Federal Realty's executive vice president of real estate and leasing. "Retailers are drawn to that, but not just the fact that there is residential above. If you've got- ten the main street 'right,' it will help you drive rents above and it gives residents the immersive environment that they are craving in these locations. If you don't, the results can be unfortunate with devaluing rental prices and unhappy residents or worse — vacant units." Federal Realty has about 2,000 residential units across its 20 million-square-foot portfolio. A mix of rentals and con- dominiums is adjusted to fit each project, Weilminster says. "There is an increasing demand for rentals — depending on the location and how the project is positioned in the market. This trend is being driven by Millennials and Baby Boomers. Both groups are expressing the desire for richer experience." Steiner & Associates, an old hand in the mixed-use con- struction game, is lead developer in a live-work-play enter- prise in Cincinnati called Liberty Center, to be co-developed by Bucksbaum Retail Properties. This will feature about 250 upscale vertical residences in the phased 1.1 million-square- foot urban development rising along Interstate 75 and slated to make its debut this year. "Residences in our develop- ments always get at least 20 percent above market rents," said Yaromir Steiner, founder and CEO of the Columbus, Ohio–based firm. "When you integrate an apartment com- plex into a lifestyle center, that center becomes an important amenity because it creates a lively environment." That fact is hardly lost on lenders, who were reluctant to fund mixed-use deals a decade ago but now favor them, Steiner says. Steiner & Associates has been building residences atop retail since 2003, when the developer added a small number of such units to its Zona Rosa Town Center, in Kansas City, Mo., almost as an afterthought. "They were drawn up as of- fices, but we changed them to residences," Steiner said. "It was experimental; we were trying to understand the techni- cal issues and see how three floors of residential could work together with retail." One issue is clear: The complexity means that the lead retail developer must either bring in a residential development specialist or, like Steiner & Associates, have one on staff, Steiner said. Each of the firm's lifestyle projects has had progressively larger residential components. In lot-constrained San Francisco, the huge Candlestick Point project, one of the largest planned mixed-use develop- ments in the world, is expected to start taking form by 2017, when the first of about 6,000 new residences will hit the market in a multiphased, multiyear venture. The site around the soon-to-be-demolished Candlestick Park — former home of the San Francisco Giants and the San Francisco 49ers — will be redeveloped by Macerich into a 500,000-square-foot shopping-entertainment center, with about 130 shops, a res- taurant village, some movie theaters, a hotel and more. Len- nar's urban division will handle the master-planned residen- tial development in a mixed-use project expected to foster $1 billion of new investment and infrastructure over the next four years in the city. On the opposite coast Macerich will soon open a 430- unit residential tower called VITA at its hugely successful Tysons Corner mall complex, in northern Virginia. A VITA kiosk in the mall informs shoppers about the development, which offers studios and one-, two-, and three-bedroom apartments, plus a 30th-floor rooftop clubhouse featuring a large sundeck and pool. Macerich has already added a com- pleted 22-story Tysons Tower office building at the complex. A block away, five residential towers are in the works, next to a future rail station, part of the McLean, Va.–based George- las Group's 32-acre Spring Hill Station mixed-use project. On the eastern fringes of London's West End, a sizable swath of the centuries-old Covent Garden district is being redeveloped into a mixed-use shopping district with some 500,000 square feet of retail and 235,000 square feet of of- fices, plus 3,000 new housing units. Construction is sched- uled to begin next year, by U.K.-based St. Modwen Proper- ties. The residences will help provide relief for a city struggling 46 S C T / A p r i l 2 0 1 5 M a c e r i c h i s a d d i n g a r e s i d e n t i a l t o w e r a t t y s o n s c o r n e r

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