In a move to attract tech-savvy millennials and affluent baby boomers, commercial real estate developers are bringing office space and residential living space to retail centers such as South Jersey retail space, completely changing the long-standing design of lifestyle centers and traditional malls in the U.S., according to a report from the CoStar Group.
These days, the report said, mall and lifestyle center developers are just as interested in landing solid anchor tenants such as multi-screen or IMAX cinemaplexes and Apple Stores as they are in introducing creative office space and apartments to their multi-million-dollar retail projects.
The driving force behind these changes is an effort to attract the millennial generation’s 80 million consumers, the largest and fastest-growing retail segment in the U.S. economy. While millennials still lag behind baby boomers in terms of the greatest retail buying power, they nonetheless wield considerable influence on the industry.
Seeking to replace dollars lost to online shopping, national and South Jersey retail space developers are hoping to create new income streams by mixing office and residential space into malls and lifestyle centers to create mixed-use projects that will appeal to the multi-tasking nature of millennials.
Millennials — the generation born in the mid 80s and roughly 20 years after — are considered social individuals who desire walkable, mixed-use environments that allow them to accomplish multiple tasks and activities in a single outdoor location. That might mean stopping at the gym, the grocery store, a restaurant, a movie theater and more, all in one place.
Projects under construction in several locations now are mixed-use, open-air malls to which office space, residential units and even hotels will be added down the line. While these projects are new construction, some developers are looking at bring the mixed-use concept to existing retail centers.
These new mixed use projects operate as both the commercial and the social and civic centers of the community, with outdoor public space that follows the design principles of traditional urban planning, one developer said.
Figuring out whether a mixed use center or a more traditional lifestyle center is best for a community comes with understanding the community’s demographic and economic base and knowing what customers want.
The myth that millennials are hip, urban dwellers is dispelled by the Urban Land Institute’s finding that only 13 percent of Gen Yers live in or near downtowns. The majority live in neighborhoods in cities or in the suburbs, which stands to reason since the oldest — and most influential millennials — those now in their mid to late 30s — beginning to have children and create households. About 35 percent of millennials own their own homes.
While the focus now is on lifestyle centers and malls, these changing demographics also may soon have an impact on the traditional suburban office park. As office park tenants search for new ways to attract employees in their 20s and 30s in an increasingly competitive job market, they are looking to their landlords to make the suburban workplace more appealing by adding residential living space and retail space to create the multi-use environment millennials want.
For more information about South Jersey retail space or other South Jersey commercial properties, please call Jason Wolf (856-857-6301; email@example.com) at Wolf Commercial Real Estate, a premier South Jersey commercial real estate brokerage firm that specializes in retail space in South Jersey.
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