The most recent development trend to sweep through the Southeast commercial real estate market is focused on elevating the traditional brick-and-mortar consumer experience. Many mixed-use developers are scaling back on the presence of traditional retailers and moving toward creating epicenters for community engagement.
The Changing Face of Retail
What’s causing this change in strategy? The simple answer: e-commerce. In a landscape dominated by Amazon and other online retailers, consumers can now order a nearly unlimited variety of items—from home essentials and beauty products to clothing, electronics and even groceries—with the click of a button. Developers are now hoping to draw consumers away from their computers and into shopping centers by offering them something that can’t be purchased online: an experience.
According to a recent study, most adults would rather spend money on experiences as opposed to purchasing items from a typical brick-and-mortar retailer. With that in mind, developers are beginning to transition to mixed-use projects that aren’t driven by the traditional big-box anchor tenant. Several innovative mixed-use developments are underway in the Southeast, and they all have a few things in common: easy accessibility; demand from non-traditional and specialty retailers; and a varied mix of retail, restaurant and residential space.
The Future is Food
In a society focused on Instagram-worthy snapshots, it’s no wonder that food and beverage concepts are now being positioned as anchor tenants within innovative, upscale mixed-use developments in the Southeast. Consumers are driven to visit trendy, boutique restaurants with unique interior and exterior designs in the hopes of capturing the perfect styled photo for use on social media. If that same restaurant is placed prominently within a larger mixed-use development, chances are consumers will spend time exploring the surrounding area to see what other picture-perfect spots are available.
Food and beverage concepts, restaurants and specialty stores are proven to drive repeat foot traffic and tend to lengthen the shopping experience for consumers within mixed-use developments. Traditional retailers benefit significantly from proximity to food and beverage concepts for that reason. Additionally, food and beverage sales are now outpacing traditional retail sales. From an investor perspective, food and beverage retailers tend to be preferred assets among retail landlords because those tenants tend to pay higher rental rates.
Experiential Retail in the Southeast
In North Carolina, the Raleigh-Durham area has plans to develop a major project that will bring exciting new entertainment, retail, residential and restaurant assets to residents and visitors alike. This mixed-use development, called Fenton, will be located approximately nine miles west of downtown Raleigh in the city of Cary, North Carolina. This area has gained attention in recent years from both businesses and developers thanks to its affordable cost of living, highly educated workforce and temperate weather. Fenton will sit near the famed Research Triangle Park, which boasts more than 250 businesses and 50,000 employees. Fenton is also around the corner from Wake Med Soccer Park and major retail centers like Cary Village Square Shopping Center and Cary Towne Center.
Once completed, Fenton will be a sprawling, 92-acre mixed-use development that will attract visitors and residents of all ages. This walkable district will bring together a cosmopolitan mix of unique shopping, dining and entertainment experiences that are all connected to a community of businesses and residences. Scheduled to begin construction in Summer 2019, Fenton will eventually include: a Wegmans Food Market; 440,000 square feet of specialty and experiential retail; a 36,000-square-foot movie theater; over one million square feet of office space; two boutique hotels; and over 800 luxury multi-family apartment units.
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