Re-Positioning Vacated Anchor Spaces
In an excellent article in The Real Deal, Katherine Clarke explores how the largest shopping center operator in the country, Simon Property Group, is handling re-tenanting of vacated anchor spaces.
Some anchors are having difficulty maintaining sales in a rapidly shifting retail environment. Internet retail has affected how consumers buy, and changing demographics and lifestyles have further altered spending patterns (see our prior posts – Elements of Seamless Retail and Integrating Online and In-Store Shopping). Anchors, however, remain key drivers of foot traffic to shopping centers, so when an anchor stumbles, in-line store sales suffer accordingly.
To reflect changing spending patterns, SPG and other shopping center owners have focused their anchor re-tenanting efforts to appeal to a younger clientele such as Millennials (see Millennials and Retail Real Estate), as well as to luxury shoppers, by:
- Replacing traditional retail with experiential retail (movie theaters, restaurants, entertainment, health and wellness). One example is SPG replacing a vacated 100,000 square foot Saks with an AMC movie theater, bocce restaurant and bowling alley.
- In some cases, re-assessing the viability of the center itself based on its competitive place in the market.
- Investing in and keeping abreast of market innovations. As described by Clarke:“To stay current with innovations in the industry, SPG has invested more than $25 million in online retail startup Union Station, a dress-rental service for weddings. That business could one day take a spot at a Simon mall. The firm is also keeping up with the branded-content game, having launched the digital lifestyle platform Simon SAID, which features blog posts by fashion writers as well as some of its retail partners. “They can smell a trend a year or two before everyone else,” Consolo said about Simon Property managers. “Usually their instincts are on the mark.”
Click here to read the full article