Facts and figures are still crucial for luring strategically important retailers to new or redeveloped shopping centers, so landlords and their representatives continue sending data-rich brochures, PDF files and zip drives to prospective tenants. But some are also employing newer methods — -helicopter rides, “flash” mobs, aerial drones, opening-day baseball tickets, to name a few — for pitching their projects to retail chains they wish to woo.
All told, today’s retailers simply expect landlords’ marketing efforts to be a cut above what was the norm during the economic boom seven or eight years ago, according to Jonathan Lapat, a principal of Strategic Retail Advisors, in Framingham, Mass. “Deals are no longer flying off the shelf like they were before,” Lapat said. “Postrecession, most retailers have a more arduous approval process internally, and so deals are taking longer to approve. As part of that, retailers are demanding better-quality presentations [from landlords].”
A developer embarking on a multiphase, mixed-use project in a major metropolitan area would traditionally rely on a sophisticated marketing campaign, using branded logos, attractive renderings, 3-D walk-through videos and the like as part of the effort. But now even redevelopment projects in secondary markets are embracing such elevated approaches to draw tenants, says Kristi Buechler, senior director of leasing for Madison Marquette Retail Services. “If it’s a redevelopment, you really need to show retailers where the center is headed,” Buechler said. “They need to be able to understand your vision.”
Buechler cites Madison Marquette’s retailer-focused marketing efforts for the ongoing redevelopment of University Mall, in Chapel Hill, N.C. Initially, when retailers were presented with site plans and demographic data related to the project, they were less than inspired by the 1970s-era mall, Buechler says. But once Madison Marquette commissioned an architecture firm to create -renderings of a lively entertainment district at a re-envisioned property (University Mall is now University Place), retailers were more receptive, Buechler says.
To date, the 365,000-square-foot redevelopment, slated for completion in September of next year, has attracted a 52,000-square-foot Silverspot Cinema and a 16,000-square-foot Aveda Institute cosmetology/beauty school. In June, Madison Marquette was negotiating a letter of intent with Forever 21’s F21 Red for a 16,000-square-foot space at the mall. “Renderings and project elevations really do make a difference in our site selection, particularly if there is any question about visibility or sight lines where a space is situated, or if the redevelopment is so extensive as to transform the character or experience of a center,” said Patrick Delaney, a Forever 21 real estate manager who is overseeing the expansion program for F21 Red.
Tailoring data to meet the specific needs of real estate executives at the likes of F21 Red continues to be an important part of the marketing process, Buechler says. But when the goal is to make a shopping center stand out from the competition, another approach is to attract attention by doing something novel and unexpected. This is what happened in April when real estate executives from Nike were touring The Shops at SkyView Center, a remerchandised outlet project in the Flushing section of the New York City borough of Queens. As the executives stepped off an elevator, they heard pounding music and watched a flash mob break into a dance routine created specifically for Nike. “The dancers popped off their jackets and were all in branded Nike gear,” said Karen E. Fluharty, partner and chief strategist of Montville, N.J.–based Strategy+Style Marketing Group. “The dancers did this great three- or four-minute routine and then just kind of dissipated, as flash mobs do. Meanwhile, we basked in the glow of having made Nike really happy.”
Fluharty and her team staged the event with less than 48 hours’ notice about the impending visit by executives from this strategically important tenant. Given its location in Flushing, Shops at SkyView Center faced strong competitors from better-known markets around the New York region, Fluharty says. By demonstrating such strong enthusiasm for the Nike brand, as well as a commitment to creative marketing, the flash mob event helped landlord Onex Real Estate Partners trump the competition. “In less than six months, we went from the flash mob occurring to having the store open,” Fluharty said.
This was not the first time Fluharty’s team had leveraged unconventional methods to tout the benefits of a property or market. When executives of one luxury chain were skeptical about whether to open a store in Detroit, Strategy+Style Marketing Group took them on a helicopter tour of the area. “We wanted to fly them over the yacht club and show them these 6,000- and 7,000-square-foot houses with swimming pools out back,” she said. “It really helped sell the market.” Along the same lines, when Baltimore-based Paragon Outlets was leasing a project in the Bronx, N.Y., Strategy+Style Marketing Group timed a retailer site tour in a way designed to pack extra oomph. “We could have just said: ‘Hey, do you want to come see this site in the Bronx?’ But if we had done that, the response probably would have been: ‘Not so much,’” Fluharty said. “Instead, we said to them: ‘Come tour this outlet site in the Bronx, and then we’ll all go to Yankee Stadium for Opening Day.’ It made a big difference.”
The growing popularity of downtown redevelopments over the past few years has also created a greater need for landlords and their representatives to answer logistics-related questions that do not typically arise when retailers are scouting for suburban sites, says David F. Baker, a principal of Baker Story McDonald Properties, in Nashville, Tenn. The 32-acre Capitol View mixed-use project, now under construction in Nashville’s North Gulch area, is but one example, Baker says. With a reported price tag of $500 million and a development timeline of up to 10 years, the project will comprise 1,000 units of multifamily residential space, 1 million square feet of offices, two hotels and 75,000 square feet of retail. “Needless to say, I did not get a three-page brochure with a map of the site plan for this one,” Baker said. Prospective tenants will have lots of questions about the project, especially operational questions related to parking, deliveries, food smells, noise and the like. “The retailer has got to be comfortable that it can survive in an urban area,” Baker said. “It’s more complicated than in the suburbs.”
Like Fluharty, Baker likes to take retail executives on site visits that can demonstrate a market’s growth potential in memorable ways. He recently drove past a Jeni’s Splendid Ice Creams shop while taking executives on a tour of the city. This was no coincidence: He knew full well that Jeni’s has been doing a brisk business in Nashville. “The lines are out the door and halfway down the block at every Jeni’s store you go to,” Baker said. “These are neighborhoods that 10 years ago you would not want to drive through, much less stop in to get ice cream. So it helps for retailers to see that there is demand in these areas.”
National retailers always pay close attention to their potential co-tenants, even when the property in question is a High Street rather than a mall. As Atlanta developer Ben Carter pitches chains on his plans for the revitalization of Savannah’s Broughton Street, he can stress his own ability to closely manage the tenant mix in the area. Since the spring of last year, Carter has snapped up 37 properties in and around Broughton Street and now controls in excess of 200,000 square feet of retail and restaurant space in the historic area. His Ben Carter Enterprises is now renovating and restoring facades, storefronts, roof decks and awnings at these properties, many of which are more than a century old. The plan, reportedly at a cost of
$75 million, is to bring new life to Broughton Street by dividing it into themed retail districts with clusters of synergistic shops and restaurants.
“We just signed a lease with H&M for a four-story, 30,000-square-foot store that will be a brand-new prototype with home and childrenswear in addition to H&M’s typical lines,” Carter said. Among other tenants in the area are Anthropologie, Banana Republic, Gap, J.Crew, Kate Spade, Urban Outfitters and World of Beer. “We have been doing a pretty active campaign of marketing to prospective tenants on a regular basis by sending out lifestyle stories and items of interest about the economy,” Carter said. “And, of course, we’re keeping people updated on new retailers that we have gotten commitments from.” One selling point: Savannah, Ga., draws about 13 million tourists per year, roughly three times the 4.5 million who visit Charleston, S.C., Carter notes. The city’s population also trends younger, thanks in part to the Savannah College of Art and Design. “A lot of retailers are now looking at how to broaden their perspective on merchandise and appeal to Millennials as well as their core customers,” he said. “They are focused on lifestyle stores, which can be a great fit in urban historic districts like Savannah’s.”
Meanwhile, Carter and Tanger Outlets are pitching a 40-acre expansion on outparcels near Tanger Outlets Savannah. The mall opened in April with factory stores from the likes of Ann Taylor, Banana Republic, Brooks Brothers and Coach. “One of the unique things we have been doing for about the last six months is flying a drone over the site,” Carter said. “You can see the construction going on, the interstate, the completed roads and the cars in the parking lot. It has been a popular tool. When we send out our email blasts, everybody keeps looking for the latest drone updates.”
In some cases, marketing retail spaces can turn into mass marketing. In early 2013 the Washington, D.C., airport authority asked MarketPlace Development — the airport retail company of which Newton, Mass.–based New England Development is owner — to lease the equivalent of 160 stores in 36 months at Washington Dulles International Airport and Ronald Reagan Washington National Airport. The team is well on its way to accomplishing this, in part by conducting leasing outreach forums that have drawn hundreds of potential tenants. “The airport authority challenged us to redevelop 90 percent of the concessions programs at these two airports,” said Kathy P. Viola, CMD, MarketPlace Development’s general manager at -Ronald Reagan. “It was a big undertaking and a very unusual, rare situation; it gave us the opportunity to establish a strategy to attract cutting-edge brands.”
Thus far MarketPlace Development has brought in such tenants as Bar Symon, Burberry, Carrabba’s Italian Grill, Chef Geoff’s, Michael Kors and Tumi to Dulles, and has signed leases with American Tap Room, Ben’s Chili Bowl, Brooks Brothers, Spanx, Taylor Gourmet and Vineyard Vines, among others, at Ronald Reagan. As with downtown projects, retail executives tend to have lots of questions about airport retail, says Kimberly Baldy, the company’s marketing director at Ronald Reagan. The leasing forums were designed to help answer these, she says. They involved inviting retailer representatives who had expressed interest in the airports in the past, but also pounding the pavement to court quirky local retailers that could add authenticity and interest to the concessions, Baldy says.
Forum turnout — MarketPlace Development has staged five so far — has been strong, Baldy notes. The first event generated 104 proposals for 19 available spaces in an initial phase of the remerchandising. “We had 305 attendees representing 214 different companies,” Baldy said. “Out of those, 177 expressed interest by returning a questionnaire.” On average, each of the subsequent forums has attracted approximately 250 attendees. The forums proved to be an excellent way to educate retailers about what it is like to operate in airport settings, where the regulatory and other constraints are far different from those at malls, she says.
“Some of these retailers had only operated in shopping centers and were able to see that there are good opportunities in airports,” Baldy said. “In fact, we have even had a few retailers close their street locations and become airport-only operators because of the good results they have had with us.”
