The Golden Age for Lifestyle CentersBy Joe GoseEllen AndersonJamie PryseMegan Gilmore

OverviewDefinitionBackgroundPopularityCostsDevelopment CriteriaOpportunitiesChallengesExamples

What is a Lifestyle Center?Generally defined as open-air shopping centers that mix national retailers with local boutiques that aim to provide upscale shoppers with convenience, but the concept is evolvingA shopping center or mixed-used commercial development that combines the traditional retail functions of a shopping mall but with leisure amenities oriented towards upscale consumers

ISCS Shopping Center Definitions

Background:Lifestyle CentersAccording to International Counsel of Shopping Centers (ISCS), developers in U.S. have built 100 lifestyle centers since 1997By end of 2004, about 140 lifestyle centers openFirst opened more than 75 years ago in Kansas CityPredict, 30 new lifestyle centers opening annually for the next five years

Popularity of Lifestyle CentersConvenienceAccessParkingSense of placeAmbianceLandscapingMusic, street side entertainmentArchitectural embellishmentsBusiness Week Video

Costs:Lifestyle CentersProperties generate average returns of 10-12% Less common area maintenance (CAM), about 1/3 less than mall retailersCosts about 1/3 of what it takes to build a typical enclosed mallSales per square foot greater than those of malls

Development Criteria:Lifestyle CentersBuilt in neighborhoods where at least 40,000 households have more than $75,000 annual incomeMust incorporate architectural embellishments ranging from courtyards and fountains to distinct exterior finishesDetails can cost $200 per square foot or moreLocation, Location, Location!

Opportunities:Lifestyle CentersCenters generate sales per square foot 22% higher than mallsLower occupancy costIf Wal-Mart can thrive in communities with population of 50,000 then lifestyle centers can also thrive in small marketsMix of big box components to centers create hybrid lifestyle centersTrade areaTraffic

Challenges:Lifestyle CentersShorter lease agreements5 yr. agreements v. 10 yr. agreementsExposure to competition Lifestyle concept attracts developers who possess no lifestyle experienceDevelopers have little control over who occupies lease space

Old Mill District, Bend OR:Lifestyle CenterOld Mill District Homepage

Referenceshttp://www.youtube.com/watch?v=8fg3T3_U74Ahttp://www.theoldmill.com/http://findarticles.com/p/articles/mi_hb4899/is_200411/ai_n18013720Dunne & Lusch, Retailing. 5. New York: Thomson Southwestern, 2005.