A CBL executive says that the mall developer has always taken a smart approach to building shopping centers, a strategy which is serving it well when some lifestyle centers around the nation are reportedly struggling.
“We build what’s needed in an area and what’s warranted,” said Michael Lebovitz, senior vice president of development for CBL & Associates Properties Inc. “We’re disciplined.”
CBL is disciplined, he said, because it doesn’t buy land a long time before breaking ground, it doesn’t announce projects well in advance and it signs on department stores first. CBL also leases the majority of the space before it breaks ground, he said.
Trying times for retailers
SHOPPING CENTER DEFINITIONS
* Mixed-use centers: A mix of retail, entertainment, office, hotel, residential and recreation uses
* Open-air center: An attached row of stores with on-site parking in front of the stores and common areas that are not enclosed
* Lifestyle center: Normally near affluent neighborhoods, these centers cater to “lifestyles.” They have upscale chain specialty stores, restaurants, entertainment uses, and normally have such decorations as fountains and street furniture. They may be anchored by conventional or fashion specialty department stores.
* Regional center: This provides general merchandise — with a large percentage of apparel. These centers normally are enclosed, and parking surrounds the perimeter.
Source: International Council of Shopping Centers
A July 17 story in the Wall Street Journal painted a bleak outlook for lifestyle centers. A total of 37 lifestyle centers were opened last year, according to the story, at a time of reduced consumer spending, tenants’ cancellations of leases and store bankruptcy filings during an economic slowdown.
Lifestyle centers, built near affluent neighborhoods, have specialty stores, restaurants and other high-end tenants that cater to clients’ lifestyles, according to the International Council of Shopping Centers.
A spokeswoman for the trade group said she didn’t have data addressing how lifestyle center construction is faring, but added that retail development overall is holding steady.
“The industry has seen an evolution in the types of centers built,” said spokeswoman Erin Hershkowitz. “We saw enclosed malls in the ’70s and ’80s, outlets in the ’90s, and moved toward lifestyle and power centers.”
Now, she said, hybrids are the trend. Hybrids combine lifestyle and enclosed center aspects, or lifestyle with power center aspects, she said.
CBL is moving ahead with outdoor projects, Mr. Lebovitz said, and on Wednesday opened Pearland Town Center near Houston. The 1.2 million-square-foot complex is called a mixed-use center because it combines a hotel (Courtyard by Marriott), retail, offices and residential structures, he said.
Mr. Lebovitz describes Pearland as a “mall without a roof,” since the project has a number of buildings connected by sidewalks, plus a 25-acre lake and parks. The Marriott is above retail shops. Tenants range from anchors Macy’s and Dillard’s, which opens in October, and specialty stores such as Coldwater Creek, Ann Taylor Loft and Chico’s.
The developer also recently announced it would add a lifestyle center, The District at CoolSprings Galleria, to its CoolSprings Galleria mall in Nashville. The first phase of the 200,000-square-foot expansion will open in 2011.
Pearland and CoolSprings are well positioned for success, Mr. Lebovitz said, because they offer a mix of stores, including anchors, versus other shopping centers that have only small stores.
“Retailers are being more selective,” Mr. Lebovitz said. “We are, too.”
There are no more projects like Pearland under way, Mr. Lebovitz said, but CBL is always looking for future projects.
“We will do mixed-use where it makes sense,” he said.
Delays at Hamilton Place
Meanwhile, the mall developer is still exploring options for renovating Hamilton Place mall, he said. Earlier this year the company dropped plans to add a lifestyle center at the food court entrance, among other upgrades, after a failed attempt in the Tennessee General Assembly to implement a business privilege tax to fund the renovation.
CBL is committed to upgrading the mall at some point, Mr. Lebovitz said.