2023 Winter Issue - 37

2022 ULI FALL MEETING
Abbey Oklak, Alysha Buck, Latasha Edwards, Mandi Wedin, Samantha Bennett
Adding Multifamily Housing Can Revitalize
Retail Centers
P ATRICK J. KIGER
The same way that urban central business
districts are morphing into neighborhoods
through the addition of residential space,
older suburban shopping malls and retail
centers can get a boost by adding multifamily
residential buildings and evolving into mixeduse
developments, panelists said at the ULI
Fall Meeting in Dallas.
" One of the reasons we're adding residential
to our retail assets is really because it
might be the best use of space, " said Abbey
Oklak, director of multifamily development for
Kimco, a Jericho, New York-based real estate
investment trust that owns and operates
open-air, grocery-anchored shopping centers,
mostly in first-ring suburbs of major metro
areas.
Densifying shopping centers with multifamily
residential space can be a win/win both
for the developer and the local community. " It
can add more housing units while also diversifying
our portfolio, " Oklak said. " It's giving
us another way to have assets when retail
is slow. "
In addition, as Kimco learned during the
COVID-19 pandemic, having residential space
near retail space can help boost sales at
a time when stores are facing increasingly
tough competition from e-commerce. Even
at its retail properties that already are doing
well, Kimco may look to add multifamily residential
" to make the center even more successful, "
Oklak said.
Walkable Environments
Alysha Buck, an associate principal and project
manager with design firm Cooper Carry,
agree that value can be added to retail centers
by adding multifamily residential. " You're
taking properties that were only accessible by
car and all of a sudden creating that walkable
environment, with users immediately adjacent, "
she said.
Multifamily residential also can become
part of a larger renovation and repositioning
of a retail center. Buck cited as an example
Ballston Quarter in Arlington, Virginia, a
reworking of one of the first major suburban
shopping centers in the Washington, D.C.,
area, built in 1951. Cooper Carry collaborated
with Callison RTKL on a redesign, which transformed
it from an inward-facing, enclosed
mall into an urban-style community with retail
space facing the street as well as an open-air
garden and plaza for gatherings to connect
the retail spaces. The project, completed in
2019, includes a 22-story mixed-use apartment
tower located in a space previously
occupied by a shuttered Macy's store.
Economic Advantages
Using multifamily residential as infill development
for shopping centers is such a compelling
proposition that AvalonBay Communities,
a major residential developer on both U.S.
coasts, is reaching out to find opportunities.
" We recognize the benefits of partnering with
retail developers and owner/operators to
expand our portfolio and really execute better
product, " said Latasha Edwards, vice president
of asset management for AvalonBay.
Building residential within retail centers
also may have economic advantages over
greenfield development. " You don't have to
worry about bringing utilities in and paying
the fees that are oftentimes associated with
the greenfield space, " said Edwards. In addition,
retail centers usually are already close to
highways and other transportation.
For potential residents drawn to the suburbs
by school quality or access to employment,
multifamily residential housing inserted
into retail centers offers some of the same
amenities they might find in an urban downtown,
such as retail and services within walking
distance, Edwards said. In addition, " you
get that sense of community that you have in
an old-school traditional local neighborhood, "
she said.
Mandi Wedin, founder and chief executive
officer at Feroce Real Estate Advisors, a firm in
the Washington, D.C., area, said opportunities
Adding apartments to retail centers also is
attractive to investors because it can provide
a way to fulfill environmental, social, and governance
goals, especially if it involves repurposing
and adaptive use rather than building
entirely new structures, Wedin said.
Adding residential to a retail center may
require some negotiations with local jurisdictions,
whose existing regulatory requirements
may hinder a project from being economically
viable. However, " some jurisdictions are
coming around and starting to build more
flexibility into their codes, " Edwards said.
Reimagining the design of an existing retail
center also can present challenges. " From
a macro perspective, how do you create a
new sense of space? " Oklak asked. " And
how does that sense of space respond to all
the users-what the tenant needs, what the
customers are for the retail, the people who
live there? " On the micro level, the remake
may require stacking uses with different service
and loading requirements, among other
specifications.
The discussion was led by Samantha Bennett,
an associate principal at Cooper Carry
who leads the retail mixed-use studios in the
firm's Washington, D.C., office.
PATRICK J . KIGER is a Washington, D.C.-based business
journalist and author.
WINTER 2023
URBAN LAND
35
exist for multifamily residential development
across the size spectrum of retail projects,
from infill urban centers to suburban shopping
centers and large malls. Such deals have
appeal for investors at a time when rising
interest rates and falling valuations are putting
retail assets under pressure to increase
cash flow through diversification.
" We've looked at self-storage, cold storage,
distribution-all sorts of opportunity to create
value, " said Wedin. " But the money really
likes residential. "
Working with Local Codes
2023 Winter Issue

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