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Retail Centers Transition, Evolve With Mixed-Use Additions

BISNOW | December 05, 2018 by Alec Berkman

As brick-and-mortar retailers struggle to compete with the pricing and convenience of e-commerce, shopping center owners and landlords are building and repositioning developments to maximize their retail tenants’ chances of success. In the competitive retail landscape, shopping center developers are enhancing their properties by focusing on placemaking, the creation of attractive, walkable spaces that encourage shoppers to linger.

The longer shoppers spend in a center, the more money they are likely to spend.

Some developers are modifying existing buildings to provide more outward-facing storefronts. Others have looked to diversify their centers with a lifestyle-oriented tenant mix, blending workspace, education, fitness and health services. These renovations are less sensitive to macroeconomic movement, and can insulate a property against economic downturns.

Developers are increasingly looking beyond the retail itself to activate it. They are integrating office and residential, often above ground-level retail, to create mixed-use communities. This promotes interaction between the stores and the employees or residents above them. Not only do these nonretail components provide a built-in shopping and dining audience, they also attract visitors and enliven properties.

The millennial generation, the biggest age group in U.S. history, lives an efficiency-based lifestyle. Millennials’ technology-centered world has made them accustomed to instant access to information, products and services, making them the most difficult demographic for retailers to entice.

The success of mixed-use communities hinges on millennials’ demand for accessibility. Satisfying this desire drives the sales conversions retailers need to succeed, increasing retailer retention and overall tenant satisfaction.

Dollinger Properties, traditionally an industrial/retail developer, acquired the old Mervyn’s HQ site in Hayward, California, with the intent to demolish the long-vacant four-story, 330K SF building, as well as the 5,300 SF retail building on the site. Dollinger plans to create its first mixed-use development with approximately 80K SF of high-quality retail and 474 market-rate apartments.

“This project maximizes the use of the site and is designed to create synergy between the residents and the retail tenants,” MBH Architects Studio Director David Delasantos said. “It will serve as a catalyst to enhance the economic vitality of the downtown area.”

The live-work-play environment has become the aspiration for forward-looking mixed-use developers and architects, opening up a multitude of design opportunities that can be tailored to modern lifestyles and habits.

“Our retail tenants will benefit from the co-located residential population visiting their stores and businesses, and the residents will mutually benefit from the easy access to the amenities and services provided by the retailers,” Dollinger Properties partner and Director of Marketing and Acquisitions Scott Athearn said. “MBH Architects’ broad multifamily experience and extensive retail portfolio make them the perfect firm to guide us through the design and permitting process and help make our new project a reality.”


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