2023 Spring Issue - 105

INFRASTRUCTURE
about the time that the shakeout in big-box stores
began. " We started seeing that it was going to be an
opportunity to add something new to our properties, "
Glazer says. Multifamily residential seemed like a
complementary fit with the stores in Kimco's centers,
putting customers on the property who would buy
groceries and patronize dry cleaners and nail salons.
The added activity around the clock " really gave the
leasing team some great opportunities to bring up the
quality of the retailers on some of these properties, "
he adds.
The trend gained momentum during the pandemic,
when restrictions exacerbated many retailers'
woes and pushed center owners to look at other
uses. Las Vegas-based real estate advisory firm
StoneCreek Partners predicts that redevelopment
and reuse of shopping malls will be the most active
asset class in 2023. StoneCreek identifies more than
150 malls across North America that either have been
redeveloped in recent years or for which redevelopment
is in the works. Some are being converted to
recreational uses, data centers, or e-commerce fulfillment
centers.
But retail-to-residential conversions seem to be
leading the way. " Shopping mall repurposing to
include residential infill or full scrape and redevelopment
is keeping a lot of developers busy, " says
StoneCreek leader Donald Bredberg. " So many
shopping malls are well located within their communities-generally
in good settings for multifamily
development. "
At a time when many brick-and-mortar retailers are
struggling, residential space appeals to real estate
investors as a potential source of revenue, says
Mandi Wedin, founder and chief executive officer of
Washington, D.C.-based Feroce Real Estate Advisors.
In contrast with big-box retail, where rent is set for a
long term, apartment rents tend to rise more quickly
in response to market conditions, Wedin notes. " You
can catch increasing rents on an annual basis, "
she says.
By repurposing grayfield sites rather than greenfields,
conversions also improve sustainability, says
architect Daniel Gehman of Danielian Associates,
based in Irvine, California, who has worked on
numerous retail-to-residential projects. Stormwater
that once collected residue from cars in asphalt
parking lots, for example, can instead be diverted
and treated in new residential projects. " It just is
better for the environment, " he says. " It fits with the
whole idea of developing places that are already
developed and densifying, as opposed to just sprawling
everywhere. "
Overcoming Obstacles
Despite their potential benefits, residential-to-retail
conversions can face daunting hurdles. Malls often
have multiple landowners, and leasing and contractual
tangles can necessitate negotiations with
the remaining tenants. " An anchor store may own
its building and the land underneath it, " says June
San José developers
Maracor and Pacific
West Communities have
filed plans to tear down
Maplewood Plaza, a
23,800-square-foot (2,200
sq m) shopping center,
and replace it with a sixstory,
260-unit apartment
building that will include
ground-floor retail space.
SPRING 2023
URBAN LAND
105
AO ARCHITECTS
2023 Spring Issue

Table of Contents for the Digital Edition of 2023 Spring Issue
