The familiar design of lifestyle centers and traditional malls is being rethought as commercial real estate developers look to attract tech-savvy millennials and affluent baby boomers by introducing office space and residential living space to retail centers, including Philly retail space.
A report from the CoStar Group notes that mall and lifestyle center developers are increasingly interested in signing anchor tenants such as multi-screen or IMAX cinemaplexes and Apple Stores as they are in infusing creative office space and apartments to their multi-million-dollar retail projects.
Their goal is to draw in the millennial generation’s 80 million consumers, who represent the largest and fastest-growing retail segment in the U.S. economy. Baby boomers still possess the greatest buying power in retail, but millennials wield considerable influence on the industry.
Retail developers, including those in the Philadelphia retail space market, are hoping to replace dollars lost to online shopping by creating a new income stream by incorporating office and residential space in malls and lifestyle centers. And they’re hoping these mixed use project will appeal to the multi-tasking nature of millennials.
Millennials — a loosely defined generation of those born between the mid 80s and into the early 00s — are viewed as extremely social individuals who crave a walkable, mixed-use environment that allows them to participate in many activities in one outdoor place, including exercising, dining, shopping, visiting with friends, seeing a movie and more.
Several new projects underway have been described as mixed-use, open-air malls to which office space, residential units and even hotels eventually will be added. While many projects are new construction, redevelopment of existing retail centers also is planned.
These new retail projects, potentially including Philadelphia retail space in the future, serve as both the commercial and the social and civic centers of the community, with an outdoor public space design that adheres to traditional urban planning principles, one developer said.
The determination as to whether a mixed use center or a more traditional lifestyle center is best for any given community is based in knowing what customers want and in understanding the community’s demographic and economic base.
The Urban Land Institute says 13 percent of Gen Yers live in or near downtowns, dispelling the myth that they are, as a group, hip urban dwellers. In reality, most live in neighborhoods in cities or in the suburbs.
Older millennials — those now in their mid to late 30s — carry the most influence. They are now beginning to have children and create households, with about 35 percent now owning their own homes.
These evolving demographics also may be changing the look of the traditional suburban office park. As office park tenants strive to attract new employees in their 20s and 30s in the face of an increasingly competitive job market, some landlords are looking to make the suburban workplace more appealing by incorporating residential living space and retail space into the office park.
For more information about Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (email@example.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker with expertise in Philadelphia retail space.
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