June 3, 2006
 
REAL ESTATE: Developers Reinvent Malls as ‘Lifestyle Centers’
 
By Teresa F. Lindeman
Pittsburgh Post-Gazette
 
Las Vegas, NV (SHNS) -- A video touting the DeBartolo family's storied shopping center history played on continuous loop recently outside the booth of Tampa, Fla.-based DeBartolo Development.
 
Founder Edward DeBartolo Sr. pioneered the shopping mall concept, according to the polished voice coming from the flat screen, and the company led by his son, Edward DeBartolo Jr., now can handle all the latest industry projects, including lifestyle centers, mixed-used developments and "even demalling."
 
Hey, a developer's got to work where the opportunities are -- even if it may mean undoing the past generation's projects.
 
As was clear at this year's annual gathering of real estate brokers and developers in Las Vegas, the real estate industry is not seeing much demand for new malls these days. There are fewer places to build them, fewer department store tenants to anchor them and declining public demand for them.
 
More than a few established malls are losing customers to the next generation of retail development. The once-revolutionary places that took weather out of the shopping equation are being pushed aside by retail developments with a fresh-air, mixed-used sensibility, both urban and suburban.
 
Consumers like such spaces, and developers can see places to build them, often by re-using land long tied up by something else. Crowds turned out for two separate sessions devoted to discussion of the latest darling of the industry -- the open-air "lifestyle centers" that try to create a sort of town center atmosphere and put parking spots right in front of the stores.
 
The industry isn't always sure what qualifies for that label. "Is it a regional mall with a roof, or is it a lifestyle center?" asked J. Thomas Porter, a principal with architectural firm Thompson, Ventulett, Stainback & Assoc. of Atlanta. He was joking, sort of.
 
An executive with Poag & McEwen, a Memphis firm that claims to have coined the lifestyle center term, said the idea was to avoid the mall experience of hiking a long way to buy a shirt while being forced to wade through packs of teenagers and other mall dwellers.
 
In addition to convenience, consumers want what the industry describes as "a sense of place," or the feeling that this place is not like every other shopping center or mall. Fueling the trend, developers like not having to line up the increasingly hard-to-find traditional department stores.
 
The implications of the development shifts -- good and bad -- can be summed up in two other seminar topics at the convention: "Brownfields: The Best Kept Secret in Real Estate Investment" and "Reversing a Trend: What to do if Your Mall is One of the Thirty Percent that Isn't Supposed to Make it?" For those at the second session, the demalling option mentioned on the DeBartolo video may be a consideration. Demalling involves more than a cosmetic makeover -- it takes away tired stores, sometimes replaces traditional anchors with big box stores or changes the mix to include anything from medical offices to residences to bars and restaurants in or near the aging complex.
 
Mall operators understand the appeal of the new lifestyle centers and mixed-use projects. Brian Ratner, a director of Cleveland-based Forest City Enterprises, admits he wouldn't mind leaving his suburban home to live in an interesting development that mixes residences with shops.
 
But he continues to sees a future for enclosed centers that are in good locations and practice effective self-defense. "Malls can fight back," he said.
 
Distributed by Scripps Howard News Service, www.scrippsnews.com.