CREJ - Retail Properties Quarterly - November 2016
It’s no secret that the American shopping mall is at a pivotal juncture. Shopping habits have changed and many malls have failed or been unable to keep up. Retail analysts this year predict that approximately one-third of American malls will close in the coming years. Bucking the national trend is Park Meadows in Lone Tree, which turns 20 this year. Despite a national downturn in the popularity of the traditional shopping mall, Park Meadows has remained a stronghold of economic activity, growing its retailer base to 180 and attracting more than 25 million visitors each year. In 1996, Park Meadows opened its doors one week ahead of schedule with 96 percent of its space leased. Since then, the mall has maintained a 95 percent or higher occupancy rate, which is several points higher than the national average. According to CoStar Group, a mall is considered healthy with a vacancy rate of 10 percent or less. Of the roughly 1,200 malls across the nation, only 80 percent fall within this category, down 16 percent from 2006. So what’s Park Meadows’ secret? There are a number of factors – both conscious decisions mall ownership has made and benefits it’s enjoyed as a byproduct of its location – that are contributing to the mall’s continued success. • Create a retail resort. From the beginning, Park Meadows was designed to offer a different kind of retail and community experience – one that looked and felt uniquely Colorado. Dubbing itself a “retail resort,” the mall pays tribute to the Rocky Mountain region with boulders, waterfalls, interior and exterior landscaping, timber ceilings and a 66-foot limestone and granite fireplace. This mountain lodge motif helped differentiate the center from its more generic mall counterparts and served to make it more of a destination for shoppers. • Offer exclusive retail experiences. Offering 1.7 million square feet of retail and dining, Park Meadows strikes the right balance between accessibility and exclusivity with the introduction of retailers such as Nordstrom, Crate and Barrel, Restoration Hardware, PF Chang’s and Dillard’s to the area. Today, 10 percent of its tenants are exclusive to the mall, including Microsoft, Merrell and Tesla, and the mall has plans to add nearly 48,000 sf of new and newly remodeled retail spaces by the end of 2016. The retail resort attracts and retains top retailers by creating experiences that motivate people to leave the house. The mall is divided into four distinct interior zones that highlight lifestyle, fashion and design, entertainment and family. Each area offers something different from a retail and architectural experience. Adding to the local feel, the mall features more than $1 million in commissioned art by Colorado artists and photographers. • Inspire growth. Park Meadows has always benefitted from its location at the intersection of two major highways, Interstate 25 and C-470. However, when it first opened in Lone Tree there was limited development in the area. Ten years later, the Regional Transportation District completed the southeast corridor light-rail expansion that connected the mall to the rest of metro Denver. As a result, Park Meadows and the surrounding area became an even more important hub of commercial and community activity, strengthening its place in the market. Since Park Meadows opened its doors, Douglas County has become the nation’s fastest growing county. After the light-rail completion, the area has seen significant growth in commercial and residential developments including multifamily housing, hotels, restaurants and grocery stores. The area is now home to major corporate campuses for companies such as Charles Schwab and Arrow Electronics. • Embrace online retailers. With more consumers moving to online shopping, the mall has adapted and evolved instead of fighting the online trend. The mall embraced several retailers that were previously online only, allowing shoppers to experience these retailers in a new, more personal way. Stores such as Soft Surroundings, Athleta, Sundance and Nespresso, for example, were predominately catalog or online. They now have thriving locations within the mall. By the end of 2016, Park Meadows will house online retail giant Amazon’s first kiosk in Colorado. • Stay nimble. Park Meadows continues to stay relevant by changing the way it offers the retail experience. Thinking beyond the department store, Park Meadows debuted the Vistas in 2008 to cater to changing tastes. Designed as a mountain village, the 154,000-sf outdoor expansion gave people more reasons to flock to Park Meadows with high-end dining options and boutique shopping. The Vistas offers a unique shopping and dining experiences because it is not a collection of stores placed within the landscape, but rather a landscape in which the stores are placed. As the retail industry continues to evolve, Park Meadows and other malls will inevitably face challenges. However, if the first 20 years are any indication, the retail resort is well positioned for success.