Out of the Box

Open-air "lifestyle" shopping centers are gaining momentum as they move north from the Sunbelt

By Gordon Wright, Executive Editor

December 1, 2003

Building Design and Construction

"Lifestyle centers" are the fastest-growing segment of the retail industry. The 2004 edition of Shopping Center Operations, Revenues and Expenses, published by the International Council of Shopping Centers (www.icsc.org), says there are now at least 75 such shopping centers in the U.S., up from 25 just a couple of years ago.

The ICSC defines a lifestyle center as an open-air shopping center with at least 50,000 sq. ft. of space occupied by upscale national chain specialty stores. Although the term was coined some 15 years ago, only about half a dozen such centers were in operation before 1990, according to the ICSC. "The concept has only really taken off in the past five years," says Jean Lambert, the report's primary author. The report compiles operational and retail sales data on 660 U.S. shopping centers — 498 open-air centers and 162 enclosed malls.

The median total occupancy area for open-air centers was 113,027 sq. ft., with centers of more than 100,000 sq. ft. comprising 56% of the total. Survey responses were received from neighborhood (53%), community (35%), power (6%), and lifestyle (5%) centers.

Although it would seem logical that lifestyle centers would be less expensive to build than enclosed centers on a per-square-foot basis, they're not, says Robert Tindall, president of Seattle-based architect Callison, which has an extensive portfolio of retail projects. Based on Callison's experience, Tindall says open-air centers cost about 20% more per square foot than enclosed centers because the latter typically have relatively simple exterior walls, efficient column spacing, and minimal interior finishes (since the common area consists largely of tenant-provided storefronts.)

By contrast, smaller buildings lose the efficiency inherent in large, repetitive structures. An open-air center usually has at least two elevations that incorporate windows or other detailing. Roof detailing is also more important, and walls are more likely to move in and out than to continue in a straight line. Tenants may want iconic elements, such as a tower. "You've basically added a lot of complexity that the old power or neighborhood center doesn't have," Tindall says.

The prototype for an outdoor center is the traditional 500- to 600-ft.-long strip center with one façade, two ends that are not highly detailed, and a row of loading docks along the rear. But breaking out of this model triggers new requirements, such as screening the loading docks and providing additional landscaping between buildings.

Tindall sees the prototypical lifestyle center as "a place where you choose to spend your time. You'll go there to socialize, see a movie, or go to a restaurant."

The CAMP, a lifestyle retail center in Costa Mesa, Calif., brings together retailers who sell merchandise for sports and outdoor enthusiasts.

These centers seek the kind of tenants that encourage shoppers to browse, not for necessities, but for "things that will either make their lives more enjoyable or focus on their interests." Bookstores, cinema complexes, and Starbucks-type coffee shops are the kinds of mall tenants that generate repeat visits, as are specialty food stores that are "more about the cooking experience than the shopping experience," he says.

Northward, ho!

New centers are opening in areas of population growth, and most lifestyle center activity has been in the Sunbelt. "Outdoor centers make sense in these areas," he says. But as they push northward, developers are reassessing the conventional wisdom that open-air centers are not viable in colder climates. "People seem to like the outdoor experience," Tindall says

As for the tenant mix, some — particularly fashion retailers — have resisted the move to open-air centers because they're more comfortable in enclosed environments, where they don't have to worry about designing storefronts or providing weather protection.

Big-box retailers might also create an incongruous juxtaposition that could negate the intimacy that lifestyle centers attempt to achieve. Large service areas, parking fields, and shopping carts don't connote a communal-type meeting place. However, locating a big-box store at the periphery of a lifestyle center could ease this clash of styles.

Despite these factors, the growth of lifestyle centers is prompting traditional enclosed-center tenants to reevaluate their options. In today's retail environment, a tenant may opt for an outdoor center if it is well laid out and the retailer can get a premium location, Tindall says.

"All we can say for sure is that what is working today won't be good enough for tomorrow," Tindall says. "Demographics are shifting. People are more mobile. Consumer tastes are more discriminating. Communities have high expectations."

Looking toward projects that are breaking ground today but won't open until 2006, he asks, somewhat rhetorically: "How will we satisfy our customers' drive for interaction, a positive experience, and good value, as well as create projects that make good economic sense?"

What makes a "lifestyle center?"

Must be "open-air" in format
Minimum 50,000 sq. ft. of retail space
Tenants must be predominantly national chain specialty stores
Often have a unifying theme or motif
Encourage shoppers to "socialize"
Create a lifestyle "experience" for shoppers

Retailing in the O.C.

An innovative example of a smaller lifestyle center is The CAMP in Costa Mesa, Calif., 37 miles southeast of Los Angeles in upscale Orange County. Tenants include an outdoor equipment outfitter, a mountain bike shop, a skateboard and snowboard store, an underwater dive store (with adjacent diving pool), and a restaurant. The largest tenant occupies 10,000 sq. ft.; the smallest, a health food restaurant housed in a yurt (a circular domed Mongolian tent), has less than 2,000 sq. ft.

The environment, the products, and a lifestyle approach to retailing were all crucial elements of developer Shaheen Sadeghi's strategy, says Jay Bauer, a principal of Bauer and Wiley Architects, Newport Beach, Calif., which designed the project. (Camco Construction Co., Newport Beach, was the GC.) "Sadeghi and his wife came in and did a presentation to us, with a set of storyboards about his vision," Bauer recalls. Sadeghi's design sensibility was shaped by his background in sportswear retailing.

With "outdoor" and "California" themes predominant, the goal was to create an "interpreted" version of a natural California landscape. Rather than taking shape as a conventional retail strip, Bauer and Wiley's plan created an ensemble of five buildings — two of which are two stories in height — with a total area of 36,800 sq. ft. The plan gives tenants a distinctive identity by allowing each to occupy at least half a building.

Sadeghi wanted to create the illusion that the buildings had been there for years. Bauer likened this effect to the "funky" feeling one gets moving into an old warehouse — "great trusses, terrific space and light." The CAMP's buildings incorporate lots of daylight, and bowstring or open glulam trusses predominate.

The originally flat site was contoured with multiple grade changes for an overall elevation difference of about four feet. Four exterior environments were created, each of which is the focus for activities related to adjacent tenants. The desert-like "arroyo," for example, is a space used by a hiking outfitter store. "Woods," "meadow," and "orchard" are the other environments.

Foreground structures provide focal points against these background spaces. They include a building with a sod and wildflower roof, and a corrugated metal tower that highlights the entrance to the mountaineering store. Windows were placed at the base of a long building to allow passersby to look directly into the skateboard retailer's store.

The CAMP's 3.4-acre property had not previously been developed, and with good reason: the long, narrow site fronts on a curve of a heavily traveled road, and the soil was contaminated. "It wasn't popular for a lot of reasons," Bauer says. Nevertheless, the site had one big advantage: location, location, location — in this case, being half a mile away from South Coast Plaza, a 3 million-sq.-ft. retail center.

The CAMP opened in March 2002. After a slow start in the wake of 9/11, it is seeing "a nice increase on a monthly basis," Sadeghi says. His previous retail development, The Lab, is just across the street; it was designed to appeal to younger shoppers. Although he also develops office and apartment properties, Sadeghi says his real passion is retail, and he's keeping an eye out for other sites that would be suitable for retail development.

Back to nature in the Heartland

Far removed from the moderate clime of southern California is a much larger lifestyle center, The Shoppes at Grand Prairie, a 488,000-sq.-ft. center in Peoria, Ill. Anchors include a 180,000-sq.-ft. Bergner's department store and a 65,000-sq.-ft. Galyan's sporting goods store. The Shoppes opened last spring, and by November was 97% leased.

The project was initially envisioned as an enclosed center, says Diane Cullinan, president of Peoria-based Cullinan Properties, the owner-developer. But discussions with retailers from outside the Peoria market showed that they preferred an open-air center because of the success they had had with such centers in other communities.

"We find that shoppers stay longer in an open-area center," Cullinan says. She notes that winter is not expected to crimp the center's business all that much, since January and February shopping activity is equally bad for both open and enclosed centers.

The center was designed by the Bloomington, Ill., office of E/A Shive-Hattery, with Diversified Buildings of Morton, Ill., as the GC and CW Development Services of Darien, Ill., as development manager.

Tom Arena, a member of Shive-Hattery's project team, describes the center's design as "a retailized version" of Georgian Revival style. He says much of the work required at The Shoppes at Grand Prairie consisted of the installation of extensive underground cabling, which was subject to natural obstacles, such as trees — a situation that would be less likely to arise during construction of an enclosed center. As tenant finish contractors came on board near the completion of the project, close coordination with the general contractor was necessary to avoid disruption to each other's work, he says.

An 18-screen movie theater and other buildings to be constructed on outlots adjacent to the center will increase its total square footage to 1.2 million.

Cullinan says the open-air character of the Shoppes at Grand Prairie has been "a real plus. The retailers are doing extremely well, and we think the public truly enjoys the outdoor aspect."

She notes that a number of activities, such as the lighting of a holiday tree, are more appropriately conducted out of doors. A horse-drawn carriage will provide rides around the center for holiday shoppers.

A poignant feature in the courtyard of The Shoppes at Grand Prairie is a monument consisting of 23 transparent containers holding 11 million buttons that represent Jewish and non-Jewish Holocaust victims.

The most unusual feature of The Shoppes at Grand Prairie is the Holocaust memorial in the center's courtyard. Six million buttons representing Jewish Holocaust victims fill 18 transparent Star of David containers, while five triangular containers hold five million buttons representing non-Jewish victims. The local Jewish Federation chapter proposed the idea, and Cullinan embraced it enthusiastically. The buttons were collected from throughout the world.