We work in lots of downtowns and find that most are not monolithic. Instead they are comprised of many different subdistricts, what we have dubbed here at LOA “retail microclimates”. As I wrote about in the ICSC guide for “Improving Tenant Mix” (which can be downloaded from the ICSC website for free here), retail microclimates are driven by a unique set of conditions, namely location, visibility, access, anchors and tenant mix. These elements, when combined, create unique case-by-case opportunities for retailers. In the vicinity of a subway stop, for instance, we might have the conditions that support convenience-oriented retail (i.e. drugstore, bodega, or specialty grocer). Near a theatre, we might find restaurants. By a hospital, medical supply stores, or better yet, injury attorneys! These are simple examples that illustrate the point that synergistic relationships exist and that these kinds of co-tenancies should be baked into your retail leasing efforts.
Yet another example of retail microclimates can be found in malls where tenant mix is often curated by lifestyle segment. So in one corner of the mall a Nordstrom drives the co-tenancy of upscale apparel retailers, while a Bed Bath & Beyond in another area might find itself surrounded by home goods stores. Long streets are particularly susceptible to exhibiting characteristics of multiple retail micro-climates. Simply put, retailers want to be near other retailers who share the same customer base. Ultimately, the synergies created by these co-tenancies help support all retailers.
A development in Savannah, GA known as The Broughton Street Collection is utilizing a similar strategy in the $100 million redevelopment led by Ben Carter Enterprises. Carson purchased 35 buildings along Broughton Street and has redeveloped the properties into a mixed-use downtown, replete with 225,000 sf of retail, 40,000 sf of restaurants, and 48 loft-style rental apartments and offices over five of the buildings. When you look at the retail leasing plan all elements of a retail microclimates are there. The eight blocks of the district are divided into seven areas with distinct identities including “upscale”, “aspirational”, “main street”, “contemporary”, and “bohemian”. These districts are designed to accommodate retailers and restaurateurs who fit each of these themes. On the “upscale” block we have Madewell, Tory Burch and Lululemon. On the “aspirational” blocks we have J.Crew, Bonobos and Banana Republic.
|Two blocks of the leasing plan for The Broughton Street Collection
This detailed block-by-block leasing plan, with microclimates identified, helps retailers self congregate in areas where they share customers. This kind of natural co-tenancy often happens in traditional downtowns, but in areas where major redevelopment is poised to occur, it happens through thoughtful planning and leasing strategies.