Quality design is the key to leasing retail centers

Real Estate Weekly, Sept 29, 2004 by Navid Maqami

For today's style-conscious consumers, innovative and quality product design is a vital selling point, ranging from the sleekest electronic devices to new retail real estate developments.

The emerging trend of high-quality retail design merits close attention. Today, shopping has become closely integrated with the leisure and entertainment sector. Generally speaking, people are no longer satisfied with targeted shopping trips in search of specific items. These days, families may spend an entire day browsing through a shopping center, many of which include restaurants, eye-catching entertainment venues and even indoor amusement parks.

To keep up with the growing demand for elaborate retail centers, architects must create a level of excitement, while keeping an eye on construction cost and maintenance requirements.

Creating an exciting, attractive shopping center, however, cannot be accomplished overnight. Good design is much more than a formal exercise. It involves thoughtful planning and research. The design team must perform a thorough due diligence and site analysis to fully assess the center's logistics, making research an imperative first step. An understanding of the area's market trends, cultural influences, local shopping habits, and entertainment practices are also critical to a successful design.

For example, what percentage of the shoppers drives to the center and requires parking? Do they use mass transit? When are peak shopping hours? When do deliveries occur? All these factors play into designing an appealing retail environment.

To complicate the issue, there are few established ground rules or templates for architects when they design a retail center. Every developer's and tenant's objectives tend to differ, so each center has to be tailored to these specifications.

At Greenberg Farrow, we realize that most developers' primary objectives are cost, leasing, and return on investment (ROI), making the initial planning and final design critical. Ultimately, the test of a well-designed retail center depends on its ability to be leased and re-leased.

When planning a new retail center, the design team needs to develop a leasing plan strategy. For example, developers are often concerned about the ability to lease space to smaller tenants. To help achieve this goal, a long-established strategy is to position smaller tenants in locations with high foot traffic. Shoppers will have to walk past these stores on the way to larger ones. This strategy makes the center more attractive to the smaller tenants from a leasing perspective.

This strategy has been successful in simple linear developments with one or two levels, but becomes more challenging in centers that are more complex. At Queens Place, a vertical center in Rego Park, one of the largest tenants, Target, was positioned on the third and fourth floors. Shoppers enter on the ground floor and walk by smaller tenants including Skechers, Daffy's and Starbucks to reach the escalator, which is strategically positioned at the back of the corridor. On the second floor, shoppers find Best Buy and Outback Steak House before moving up to the Target.

The flow of a successful retail center is also important. If a development is difficult to navigate, shoppers may not return. Thus, it is critical to examine how patrons enter either by car or on foot, and circulate through the center. One of Greenberg Farrow's principals, John Clifford, has nicknamed this analysis the "grandmother test." The design team must be comfortable and prove that his "grandmother" could visit the center, do her shopping and exit the development without getting lost.

Signage and visibility are critical factors for tenants who are considering leasing space in a property. Normally, signage is limited by zoning and building codes. Despite these limitations, however, tenants often want their signs and logos as large and visible as possible. This may contrast with the developer's vision and with the flow of the center. An experienced design team can help ease the process by developing design criteria illustrating the limitations and possibilities of signage for a project. These criteria can be attached to the lease documents.

In the Bronx, Greenberg Farrow recently designed River Plaza, a 235,000-square-foot retail center that houses 16 stores in three one- and two-story buildings. All stores have entrances fronting West 225th Street. Although the center is situated in separate buildings, each tenant has the potential for signage along the street.

Greenberg Farrow created the design criteria to keep the signage along the street uniform.

Although design criteria are critical when designing retail centers, guidelines range from flexible to very specific. The design criteria document is important for the tenants, since it outlines general rules that set forth what they can do outside of their spaces and often specifies how they can utilize interior space.

At Gateway Center in East New York in Brooklyn, Greenberg Farrow created detailed design criteria that established specifications for signage, colors, finishes, and other design elements. As a result, though some of the tenants built their own buildings, the entire center looks uniform, as if it were designed and built at the same time.