Retail Repositioning Guide

The Big Picture & The Blueprint

A Comprehensive Checklist & 10 Practical Strategies for Repositioning Your Property

BEFORE:

Presented by RetailRemix and Perkowitz + Ruth Architects

 Cover Photos: Citrus Crossing Repositioning
Table of Contents Project, Azusa, CA – Before and After

1 Ripe for Repositioning 3

2 The Big Picture – A Comprehensive Retail Repositioning Checklist 4

Demographics & Trends 4
Competitive Environment 5
Strategy 7
Action Plan 8

3 The Blueprint – 10 Practical Strategies from Perkowitz + Ruth Architects 11

Evaluate What You’ve Got 12
Vary Heights 13
Consider Prefabricated Items 14
Improve Public Spaces 14
Prioritize Signage, Lighting & Landscaping 15
Enhance Site Circulation 17
Focus on Varying Materials and a Rich Color Palette 18
Create Identity 19
Employ Natural Light 19
Incorporate Public Art 20

4 About 21

The information contained in this guide is for informational purposes only.

Users of this guide are advised to do their own due diligence when it comes to making business decisions and all information that has been provided
should be independently verified by your own qualified professionals. By reading this guide you agree that neither the authors nor their companies are
responsible for the success or failure of your business decisions relating to any information presented in this guide. © RetailRemix 2010

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 1 Ripe for Repositioning
RetailRemix partnered with Perkowitz + Ruth Architects to create this guide to
share the comprehensive thinking and practical strategies that lead to the
successful repositioning of your existing retail center.

Today everyone is increasingly forced to do more with less. In the retail real
estate world, adaption, evolution and just plain old “plan B” are much more the
norm than a bright shiny new retail center popping out of a field somewhere on
the outskirts of town. Expanding retailers are looking for the safe, established
trade areas. Capital realities and tenant demand do not support many major
retail redevelopments. More than ever, now is the time to consider a strategic
repositioning effort of your existing retail center.
Lincoln & Rose, Venice, CA
While everyone else is trying to put band-aids on vacancy and capital issues, you
could make a smart, strategic investment that positions you to emerge better and
stronger and leapfrog your competition.

This practical guide is designed to help you analyze your property’s potential and
decide if a repositioning effort makes sense. We will look at the big-picture
thinking that successful redevelopers use to analyze the current conditions and
make plans for a strategic repositioning. We will then share a blueprint outlining
some very practical strategies that can be effectively employed in your retail
repositioning plan.

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 2 The Big Picture
A Comprehensive Retail Repositioning Checklist

DEMOGRAPHICS & TRENDS

First, understand who lives, works and shops in your trade area, how that has
changed over time, and how it is expected to change in the future. Current
demographics must be embraced, and it should go without saying that there is
no place for ego in a repositioning project; if you direct your real estate team to
deliver stores that you personally prefer, you run the risk of being those stores’
only customer. Consider only those retail uses that support the needs and wants
of customers in your trade area. Also, understand that demographics (age,
education, ethnicity, income, family size, home ownership statistics and daytime
employment population) are not the only important measure of your trade area;
psychographics, which is an index of consumer preferences and shopping
habits, is equally important to understand.

Consider the following when analyzing your trade area:

 Daytime Employment Population: Which major employers are leaving,

expanding within or entering the trade area?
 Retail Traffic Generators: How stable are big box retailers, malls,
theaters and other regional draws your property benefits from being near?

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  Residents: How stable are the residential communities surrounding your
property? What are the anticipated trends?
o Are residents shopping more frequently outside of their community
because other areas have more to offer?
 Employees: Does your store employee base live within the trade area? Is
transportation a problem for employees living outside the trade area?

COMPETITIVE ENVIRONMENT
Know your competition as well as your own property. If your marketing
department or management team hasn’t done so already, perform a S.W.O.T.
analysis to take a candid look at the Strengths and Weaknesses of your center
(those things you can control), and the Opportunities and Threats from your
competition (things you cannot control). Taking the time to understand factors
like these will put you in the position to make smart strategic decisions.

Strengths & Weaknesses of your existing center:

 How does your existing center stack up to the competition?
 What are the strengths that can be built on?
 What are the weaknesses? Can they be resolved? Could a new strategic
focus help to minimize or negate these weaknesses?
Be realistic in your analysis – too many owners think that they have the “A”
location. Get feedback from different perspectives.

Opportunities & Threats from the competing centers in the area:

 How are the existing centers positioned in terms of their tenancy and
physical condition?
 Are there any new projects, redevelopments or facelifts planned?
 Are there any possible opportunities for new shopping center development
in the trade area? Is there land available or a struggling car dealership
that might go out and be converted into retail?

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  Who are the key tenants in competing centers and how stable are they?
 Which competing shopping center is frequented most, how often and
why?

To stay current with what is happening in your trade be sure to get Planning
Commission Agendas and visit your city’s website to look for pending projects. It
is also advisable to visit your center(s) and surrounding area personally at least
two days a month – one daytime visit during a weekday and one daytime visit
during a weekend, and then switch to evenings next month.

Also, as part of the analysis of your center and the competing centers in your
trade area, it is helpful to spend time gathering current retail sales information.

Retailer Sales Volumes:

 Obtain as much retail sales information as you can in your center and the
surrounding trade area.

Specifically look for trends and success stories. This will help you to formulate
your strategy and the information will also be helpful when setting rents and
marketing your redevelopment to similar and complementary tenants. Be
diligent about gaining this information from trade sources, other retailer
connections and local and national retail brokers. Also, if your real estate
connections don’t produce results, don’t rule out ground level reconnaissance.
You will be surprised at what you will find out when you can casually approach a
store manager and get them talking.

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 STRATEGY
Now that you have fully analyzed the competitive environment and the strength
and weaknesses of your own property, begin strategizing the repositioning of
your property. Start with:

 What type of centers or uses are in demand and will continue to be in

demand that are missing in this trade area? (e.g., high-end, niche,
discount, regional, convenience)
 Which of these make sense for your particular property with respect to its
site characteristics: positioning, size, access, visibility, etc?

And then consider specific retailers

 Which national retailers are expanding right now in your area or even your
state? Even in a recession, there are great national brands that are
growing - some of them aggressively.
 Are there regional chains or up-and-coming local chains that are growing?
 Which of those retailers will embrace the current demographics of the
trade area?
 Could your project accommodate those retailers or even become an
optimum site for them with a few changes?

Consider all types and sizes:

 Which anchor stores have been unsuccessful finding store locations in
similar trade areas and can you market your site as a reasonable
alternative?
 Which Jr. anchors follow those anchor stores?
 Do small shop retailers rely on “going to work” or “going home” traffic?
Which does your property enjoy and can you absorb retailers from
competing centers because they are positioned on the wrong side of the
traffic route?
 Which small shop tenants are ripe for picking due to decreased traffic in
their existing centers?

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 ACTION PLAN
As you start to formulate your strategy, you will need to iron out a specific plan.
How can you move in this direction with what you’ve got? Put a plan in place to
focus on existing tenants, new tenants, timing and the physical changes
required.

 Obtaining a Necessary Variance: Read and understand the

development agreement of your property intimately. The development
agreement outlines every detail that was negotiated between the
developer and the city or county in which the property resides. In
distressed economies you may have terrific success in gaining needed
variances from your governing body in order to stimulate new sales from a
tired project. Also, in these times cities are less busy and fees are often
lower than periods of peak development. Signage types and heights,
modified landscaping requirements and improved access to the property
are all fair topics to address when asking for variances.

 Investment: Ken Robertson of TR Realty Partners in Orange County

provides the following advice for analyzing your project from an
investment perspective. Create capital improvement budgets for any
proposed construction modifications and work only with project managers,
architects, and contractors that are highly experienced with retail
properties and the needs of retail and restaurant operators. When
compiling and analyzing the economics of your proposed project, the
basic steps include creating a (a) budget of all renovation expenses, (b)
projection of when these costs will be incurred, and (c) projection of the
“additional” NOI which will be generated as a result of the planned
modifications. These three factors will give you the basic income and
expense information you need to understand your Return on Investment
(ROI), which in most immediate terms is simply the fraction: “additional

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 annual NOI” divided by “total renovation costs” = annual Return on
Investment. A complete explanation of ROI analysis extends beyond this
explanation but could also include financing of costs and preparation of a
“discounted cash flow model” which takes into account “time value” of
money and how the added NOI increases the value of your project if sold.

 Merchandising Plan: An arduous, but necessary part of repositioning a

large shopping center is creating a merchandising plan in which all spaces
on a lease plan are color-coded by sales volume and expiration dates. A
merchandising plan empirically demonstrates all potential opportunities for
tenant replacement, redemising of space and opportunities to stave off
tenant attrition. After creating your merchandising plan, the respective to-
do list should include immediate follow up:

o Contact tenants with kick-out or volume-out clauses to determine

their mind-set.
o Contact tenants with future lease renewals to ask to enter into early
negotiations.
o If the property is intended to be held for a short period, determine
whether it is better to keep or release mom-and-pops or non-credit-
tenants because they can negatively affect the valuation of a
shopping center.

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  Timing: Do your homework when it comes to timing, especially with
respect to current market trends, tenant growth trajectories and your local
trade area.

Overall market conditions:

o Do the overall market conditions support your timing?
o Is it necessary to try to time this repositioning with a market
recovery or is there sufficient demand in your niche and locality?
Tenant Growth Plans and Trajectories:
To the extent that you are able it is good to confirm your target tenant’s
growth plans, understand their approval process and get a feel for their
stability both on national and local level.
o Do you know your target tenants and are you able to get your
information directly from them?
o If you don’t have a relationship with your target tenants, find and
hire brokers who know them.
o Source any current or recent deals your target tenants have made
from landlords or brokers who will share and confirm what your
target tenants volunteer.
Your Local Trade Area:
o How quickly are comparable sites in the trade area leasing?
(Please remember that the space right around the corner from the
“A” location may never find a tenant)
Store Construction and Opening Dates:
o Understand the timelines for store construction and standard
opening dates of your target tenants. Some retailers are
notoriously slow, few are lighting quick. Some retailers only open
new stores once or twice a year and on a specific date planned
more than a year in advance. Be prepared to accommodate
important opening dates.

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 3 The Blueprint
10 Practical Strategies from Perkowitz + Ruth Architects

Now that you know what direction you want to take your center,
what are the most effective physical steps you need to take to get
there? How do you create a new shopping environment to attract
retailers and customers while mitigating redevelopment costs?
Retailers often take a wait-and-see position before committing to a
redevelopment project. To get new tenants on board early, you
need to be able to describe the major physical changes that you are
envisioning, share your conceptual drawings with them and then
include their input in the process. To help guide your thinking,
RetailRemix contacted Perkowitz+Ruth Architects to gain some
realistic and practical insight on how to reimagine your center.

Perkowitz+Ruth Architects outlined the ten most effective strategies

for improving a transitional property:

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 Evaluate what you’ve got: Review and question existing
conditions to evaluate what is viable.

Perform a thorough analysis of your property.

Assess structural elements and existing
materials because adaptive reuse of the current
layout and materials can alleviate large costs.
Develop a strategic price point and a basic
action list so your architect can develop varying
options and degrees of enhancements.

It is often the case in urban centers that tired

building facades created in the 1980s or 1990s
may mask a more attractive façade from an
earlier era. Studio One Eleven redeveloped a
retail center at 4th + Linden in Long Beach into
a combination of office and retail condominium
uses. When they took down the diagonal cedar
siding from the façade, underneath was a
beautiful art deco version. The project is
characterized by respect for the fine work of the
past and a determination to merge it with
intelligent design of today. The façade work,
along with new landscaping and refurbishment
of the parking area, cost $58 per square foot.
The Long Beach Heritage honored Studio One Eleven and East Village
Partners for 4th + Linden with a Preservation Award for Rehabilitation,
Adaptive Reuse and Sustainability, commenting: “They came upon buried
treasure: an original 1933 Art Deco façade consisting of delicate Egyptian
Lotus leaves”

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 Vary heights: Enhance the visual impact of each retail tenant
space by varying heights.

Create a range appropriate to the human scale

(28 to 32 feet) and thus increase the visibility
and marketability of each tenant. Guests will
favor the intimate environment and prospective
tenants will be drawn to the uniqueness of the
space.

The Festival Companies and Pritzker Realty

Group created a village environment at Buena
Park Downtown, a 138,000-square-foot
outdoor addition to the enclosed Buena Park
Mall. Buena Park Downtown features an urban
streetscape design with a pedestrian plaza and
an eclectic mix of architectural styles. Each
retail façade is unique in character, with varied
colors, textures and heights, according to
Marios Savopoulos, AIA, senior principal and
design director at Perkowitz + Ruth Architects
Placemaking studio. Illuminated signs attract
visitors from beyond the immediate
neighborhood. Energized by the addition of the
Krikorian Metroplex Theatre, the lifestyle
components and interior mall renovations
brought new life to the mall.
Buena Park Downtown extends the appeal of the Buena Park Mall with
an urban streetscape design that features storefronts of varied colors,
textures and heights.

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A prefabricated trellis was chosen for its articulated
detail and helped to keep the construction of
Countryside Marketplace on time and on budget.
RetailRemix – www.retailremix.com
Consider prefabricated items: in order to stay within budget
ask for prefabricated or off-the-shelf items rather than custom
pieces.
Not only will this save in the cost of materials, but it will also
save time and labor in order to meet grand-opening
deadlines for new or renovation projects. Prefabricated
domes, trellises, columns, or light fixtures can be just as
effective as customized ones.
Countryside Marketplace is a 68-acre retail village located at
the southwest corner of Newport Road and Interstate 215 in
Riverside County. Donahue Schriber created a vibrant and
pleasant destination for residents of Menifee and
surrounding communities. The center’s design was inspired
by Agrarian-style architecture, infusing the shopping
experience with a historical foundation and indigenous
references. A prefabricated trellis was chosen for its
articulated detail. The trellis element is incorporated
throughout the center to bring cohesion to the theme.
Improve Public Spaces: Don’t forget that the function of a
shopping center is to serve the needs and preferences of its
customers.
People are drawn to activated spaces, no matter the size of
the project. Creating a sense of place can simply mean
enhancing the pedestrian experience by adding furniture,
umbrellas, canopies, piped music, bike racks, paving,
fountains and planters. The addition of benches for adequate
resting spots invites customers to linger and enjoy
themselves.
Perkowitz + Ruth Architects – www.prarchitects.com 14

At Waterside Marina Del Rey, P+R
Architects transformed a dated retail center
through sophisticated design that embraced
the casual seaside resort identity of Marina
Del Rey.
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At Waterside Marina Del Rey
(Marina Del Rey, CA), a
Caruso Affiliated development
that was the winner of the
shopping center industry’s
prestigious SADI Award, the
repositioning effort included
adding shaded gathering
spaces, terracotta walkways
and a fountain centerpiece that
activated the environment and
created a true destination, said
P+R Architects’ Savopoulous.
Prioritize Signage, Lighting and Landscaping: Light the
way and give shoppers obvious direction and easy access to the
stores they seek.
Signage, lighting and landscape enhancements are the most
valuable renovations you can make for impact on customer
and tenant perceptions. Make sure that wayfinding is clear
Perkowitz + Ruth Architects – www.prarchitects.com 15
 and graphics are
updated. Ensure that
lighting is strategic
and offers clear
direction. Landscape
should complement
the environment and
not obstruct the
visibility of tenants
and signage.
Consider replacing
landscaping with
drought-tolerant
plants to reduce water
usage.

A Target-anchored,
redeveloped shopping
center featuring a
strong mix of national
and local retailers,
Brea Marketplace is
located across the
As architect of record for Regency street from the
Centers’ renovation of Brea established Brea Mall and adjacent to a large office complex.
Marketplace, P+R Architects updated Regency Centers renovated the 352,000-square-foot center,
storefronts, landscaping, signage, originally built in 1989, adding new retailers and improving
lighting, site work and resurfacing of facades, landscaping, signage, site work, lighting, and
parking areas. resurfacing the parking areas.

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 Enhance Site Circulation: If your shopping center is not
conducive to pedestrian access ― change it. Shoppers want to
easily navigate retail centers. Do not block off local retailers from
an anchor tenant. Find a way to create consistent circulation to
connect all pieces.

“This is typically one of the

most challenging changes
to implement, but one of
the most beneficial for all
tenants,” said Brian Wolfe,
AIA, senior principal of
Perkowitz + Ruth
Architects. “Through way-
finding, lighting or
additional sidewalks and
pathways, the intent should
be to unify the center and
create a single experience.
At Citrus Crossing in
Azusa, CA, we created
inviting paseos that lead to
a centralized courtyard
framed by the renovated
theater.”

Perkowitz + Ruth Architects’ renovation of Citrus Crossing for Trachman Indevco opened up a
dark corridor leading to the theater and turned it into an open-air centerpiece.

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Owner, tenant and neighbors reap the benefit of the
revitalized Lincoln & Rose neighborhood center in
Venice, CA.
RetailRemix – www.retailremix.com
Focus on varying materials and a rich color palette:
Surface enhancements can make a strong statement on a lean
budget.
Use accents, textures, colors and patterns as appropriate,
keeping in mind the fabric of the surrounding community.
Paint is the least expensive material and least labor intensive
upgrade that can be performed. Find efficient, low-
maintenance, local materials to compliment the aesthetic.
Materials such as corrugated metal, sheet steel or cement
board siding are all highly-durable and cost-effective options.
At Lincoln & Rose in Venice, CA, Combined Properties
repositioned an aged retail center into a thriving
neighborhood center by capturing the beachside character of
the surrounding community. The project was accomplished
by use of a layering of screens and trellises composed of
naturally weathering materials. Gates made of renewable
and recycled materials now hang above the entry of an
outdoor garden center during the day for shade and lower at
night to secure the store. The sidewalk design itself was
inspired by the beach, including decorative concrete with
shell and pebble aggregate. The use of unique architectural
features and landscaping contributed to the community’s
embracement of the project.
“We knew that the development team was strongly
committed to the project’s complete transformation so we
focused on updating the center in ways that the community
would appreciate,” said Alan Pullman, AIA, senior principal of
Studio One Eleven and lead architect of Lincoln & Rose. “We
believed that if you met the desires of the neighborhood first,
tenants and ownership would greatly benefit.”
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At Burbank Empire Center colorful images of vintage
airplanes are located throughout the center and are
visible from the adjacent Interstate 5.
RetailRemix – www.retailremix.com
Create identity: Complement your wayfinding by adding an
iconic element.
This element does not have to be costly as iconic materials
can be attached to the existing structure without having to
construct new parapets. Feature billboards and uplighting to
elevate the sense of awareness without manipulating
building heights.
The adaptive reuse of a former Lockheed manufacturing
plant, Burbank Empire Center is located along Interstate 5 in
Burbank, CA. Zelman Development positioned the center to
take advantage of its prominent visibility from the freeway.
The architecture recalls the practical aesthetics of jet
hangers and aviation. Large framed canopy structures and
colorful images of vintage planes are located throughout the
center creating a landmark destination, according to P+R
Architects’ Wolfe.
Employ natural light: The more natural light people are
exposed to the more they enjoy their environment.
Consider adding skylights if your center has an enclosed
component. If your center is an outdoor lifestyle center or a
series of in-line shops, focus on storefronts. Higher
storefronts allow more light and greater product exposure
(however, consider the positioning of the development to
avoid excessive heat exposure).
Perkowitz + Ruth Architects – www.prarchitects.com 19
 “New sustainable products and energy efficiencies are
consistently being uncovered,” said Rick Martin,
sustainability manager at P+R Architects. “This is an ideal
time to evaluate energy-saving alternatives for your center.
Products such as solatubes support daylighting and reduce
the use of artificial light.”

Incorporate public art: One of the most effective ways to

enhance the environment and gain customer buy-in is by asking the
community to personalize the shopping center.

Partner with the local school district to have the children

paint tiles. Establish a fundraising effort in which supporters
can purchase bricks. Commission a local artist to create a
unique sculpture. The scale and cost of the effort can be
minor to the budget, but public art projects bring an
emotional investment from the community.

At Bella Terra, a formerly enclosed Huntington Beach

Shopping Center, P+R Architects worked with DJM
Capital Partners, Inc., j.h Snyder Co. and the Ezralow
Company to transform the center into an all-outdoor
experience incorporating public art.

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 4 About
Perkowitz+Ruth Architects (www.prarchitects.com) has been working with
client and tenant repositioning efforts for nearly 30 years. Our professionals understand
that cost-effective design is essential. In addition to full scope architectural services,
P+R offers a number of incremental services to help you find creative solutions, such as
sustainable design, disabled access surveying and feasibility studies.
RetailRemix (www.retailremix.com) is a blog that profiles retail redevelopment and
repositioning projects as well as offering tools, tips and services that can help you bring
new life to your retail center. This blog is maintained by Seth Parker, a corporate real
estate professional who has developed stores for Starbucks Coffee and Panera Bread.
Seth has a background in architecture and an interest in seeing the retail world become
more interesting and enjoyable with an increased focus on placemaking.
SiteTour: Retail Remix is a part of the SiteTour Network (www.sitetour.com).
SiteTour helps the retail real estate industry stay connected and informed. You can use
SiteTour to find retail property information, site plans and the like and also sign up to
receive landlord or tenant activity updates in your geographic areas of interest.

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This is a Conversation Starter: Everything we do at RetailRemix is a conversation starter; this is not a one-way broadcast. I’d love to
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© RetailRemix 2010

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