Never a dull moment on the retail front. Although retailers are experimenting with many new concepts, the business of retail is not for the faint-hearted. It remains very difficult to predict acceptance and success.
Retailers need a substantial investment even for pop-ups and developers need considerably more.
Thus, established companies attempt to limit risk by building stores/projects in locations. New developments and stores are based on trends, big data, and scale. Usually great new retail concepts are monumental and boast the biggest, best, and most wondrous destination than ever-experienced in previous eras. Such is the model for TSX in Times Sq. in NYC and Planet 13 in Las Vegas.
TSX is planning 46 floors of showrooms and experiential retail and entertainment; Planet 13 will eventually be 112,000 s/f of recreational cannabis with all sorts of related retail. Most assuredly, Planet 13 will be an all time winner, and hopefully TSX as well, but neither of these are business models that can be easily slimmed down or reworked for non-A locations.
What is rare, moderately scaled, with potential for duplication in neighborhoods or downtown locations where vacancies have mounted, is the revitalization for Bleeker St., West Village, NYC.
Bleeker St.’s story is familiar. Once a vibrant retail scene, now mostly forsaken with numerous vacancies, high rents and no takers. But Brookfield Property Partners has come to its rescue. The company has acquired seven storefronts on Bleeker St. to revive. Plans include incubating new concepts from the internet, leasing to local innovative brands, and working with existing merchants to create a common vision. They also plan place- making artistic, cultural, and promotional street events. The existing pedestrian scale and storefronts will be maintained, and this will please shoppers by creating the easy access and authenticity they so desire.
Developers have typically shied away from the risks of developing “small-batch” retail and in tight urban settings. The time, however, has come. Especially given the fact that millennials crave authenticity and they live, work, and want to shop in urban places. It is also a feasible strategy for many different locations given appropriate market conditions and cooperation between public and private sectors.
Municipalities can start the process. They can update zoning, become flexible with restrictive regulations, permit more density in commercial areas, and be more business –friendly to developers. Most importantly developers, residents, and civic officials working together can innovate, execute, and thrive. Bringing the past into the present by breathing new life into good real estate is of great value to our history, our environment, and ourselves.
Carol Todreas is a principal at Todreas Hanley Associates, Cambridge, Mass.