Conshohocken, Pa. -- Ikea said Wednesday that contractors have been hired and a building permit is pending for its future Miami-Dade store in Sweetwater, Fla., putting the home furnishings retailer on track for a groundbreaking in 60 days and a summer 2014 opening date.
Ikea selected Balfour Beatty Construction to oversee the project. Other Florida firms involved include Kimley-Horn and Associates for civil engineering; ATC Associates for geotechnical services; GFA International for testing and inspection services; Holland & Knight for local land use counsel; The Goldstein Environmental Law Firm for Brownfield expertise; real estate brokerage The Shopping Center Group for site selection support; and Procacci Development Corp. for selling the land. Atlanta-based GreenbergFarrow is the project architect.
EL DORADO, Ark. -- After opening more than 200 new or redesigned convenience stores over the past five years, Murphy Oil USA Inc. has "several dozen" others in the design stage to be opened in coming months.
Working with GreenbergFarrow, an Atlanta-based architecture, planning, engineering and development consulting firm, Murphy Oil USA has been ambitious with its store design program, driving growth and value for the retailer.
GreenbergFarrow is proud to contribute to the national success of Murphy Oil," said Rod Abney, a principal of GreenbergFarrow. "Having delivered thousands of outlets for many of America's largest retailers, we understand that rollout execution is a complicated undertaking that needs to consistently support the client's business objectives. Murphy Oil appreciates this approach and philosophy."
Michael O'Brien, senior director of real estate for Murphy Oil USA, said, "GreenbergFarrow's best-in-class service has helped Murphy Oil maximize our ability to open new stores. Their cost-effective approach has proven to be of great value to us."
"Four key factors drive a successful retail rollout program," said Abney. "The rollout provider must understand the client's needs and objectives, the focus must be on customer service, quality deliverables are paramount and value must be added to the process at every opportunity. GreenbergFarrow leverages these strategic elements in support of Murphy Oil."
Dunham Place, a 160-unit Williamsburg rental, reached the 50 percent leased mark in just about a month, the Corcoran Group said in a statement today. Marketed by Corcoran’s Christine Blackburn and Lior Barak, the waterfront property at 15 Dunham Place hit the market in late October — and thanks to the 50 percent lease mark, the building now has its certificate of occupancy. Move-ins at the property, designed by Greenberg Farrow and developed by L&M Development Partners, began this past Saturday. A total of 23 active listings — one for a 909-square-foot one-bedroom listed for $3,900 per month and another for a 1,050- square-foot corner penthouse two-bedroom at $5,200 per month – are available on Streeteasy.com.
By Brian T Ahern, Studio Director, GreenbergFarrow
Increasingly, owners and developers are undertaking residential conversion projects in New York City and elsewhere.
When carrying out these initiatives, architects and designers should remain mindful of several special capabilities required for a successful conversion.
I have had the privilege of playing a leadership role in designing numerous prominent conversions, including the landmarked Jersey City Medical Center, the country’s largest-ever renovation of a historic property. I was also called upon to create a condo conversion scenario for a 75-year-old office tower that stands as Manhattan’s fifth-tallest building.
My experience has showed how conversion designers need to be masters of creativity, archeology and diplomacy. Creativity is required, simply because whether dealing with an office building or a hospital- these structures were never initially laid out to be residential. You just can’t, for example, move a steel column as easily in real life as you can on paper. You have to employ certain techniques and strategies to solve the puzzle you face when dealing with existing physical realities.
Designers need to creatively utilize all the spaces and create efficient apartments that are not too big- but sized so that developers can make a profit, or at least make their money back. At the same time, you have to be creative when recapturing space not suitable for residential use.
For example, the Jersey City Medical Center- now called The Beacon- involved a series of old, landmarked buildings. Numerous residual spaces could not be converted. So we designed schemes for fitness centers, rooftops, barbecues, oversized concierge areas, billiard rooms, juice bars and a movie theater. Outdoor space became a park for tenants, complete with a dog run.
Archeology skills are also required, especially with older buildings. With older buildings you always go in a little bit blind. What is behind a certain wall? Is a particular column bearing or not?
And what if a structural crossbracing blocks access to an apartment? If the bracing is needed to maintain building rigidity, you cannot cut structural cables to make way for the beautiful apartment the developer envisioned.
Fully built-out buildings come complete with plumbing rises, ductwork, electric, bathrooms and chaises. Until you rip out the walls and see what must stay and what can go, you do not know what you are dealing with.
For example, when it comes to contemporary building, it is a reasonably safe assumption that the exterior walls will be uniform in thickness.
That may not always be true for older structures. Some have lower exterior walls that are thicker than the upper floors, like in an old cathedral. The distribution of the weight and the load is on the lower floors.
This can be critical when designers are ascertaining clear interior dimensions for various floors of an entire building. You cannot simply extrapolate these dimensions building-wide based upon the wall thickness of a single floor.
Today, particularly because of the need to comply with FHA and ADA requirements, designers must factor in variations that might be encountered in an aging structure.
The Office for Metropolitan History can be an excellent resource for finding original blueprints and documents for old buildings.
Found by Christopher Gray of the New York Times, the company assembles historic photographs, original architectural, structural and mechanical drawings, and data on use and occupancy.
Also, in earlier times, room measurements were taken with such quaint and antiquated devices as tape measures.
Today, surveyors can measure rooms with NASA-level accuracy by using laser CAD. The technology is advancing rapidly, and each succeeding enhancement makes surveying easier and more accurate. Laser CAD scans the room perimeter and provides high-precision, auto-CAD drawings that can measure in the range of 17 decimal points.
Finally, diplomacy is required.
Developers come to me every day saying, “This is what I want and it had to be like this.”
I do my best to get to the level of design they seek- but sometimes it just cannot be done with existing buildings.
A developer may state, “I want a living room in the southwest corner of the apartment.” Yet you must tell them there will be a 2-by-3-foot steel beam right in the middle of the coffee table. So you show a sketch demonstrating, for example, that the living room can be situated between two bays.
You show alternatives. If necessary, you bring the engineer into the discussion to reinforce the absolute need for a new approach.
I one worked on a skyscraper that was over-elevated for residential use. The developer demanded removal of a series of elevator banks. Diplomatically, we explained that behind these elevator banks were giant, 2.5 inch, wind-bracing steel cables that kept the building from swaying. We brought in structural engineers to validate our message. Sometimes the answer is “no”- even if developers don’t want to hear that.
Designing residential conversions can be enormously exciting and satisfying. But a successful architect approaches the task with a thoughtful combination of creativity, archeology and diplomacy.
Strained by Online Commerce, Changing Shopper Preferences and Trendier Competition, Many Outmoded Malls Face Bleak Future
By Randyl Drummer
The widening gap between strong malls with rising sales and failing malls that are hemorrhaging retailers, sales dollars and foot traffic has led to dire forecasts by some analysts for the future of older enclosed malls as changing demographics and buying habits suck the life from aging and poorer quality properties.
Many trade areas are unable to support multiple malls, with dominant properties increasingly attracting retailers and shoppers at the expense of outmoded centers. Some of these properties, memorably documented on web sites like Deadmalls.com, are so devoid of shoppers and stores that they may be suitable only for demolition or as sets for an episode of "The Walking Dead."
REITs like Simon Property Group (NYSE: SPG) and General Growth Properties (NYSE: GGP), the nation's largest mall operators, have gotten the message and are busy divesting lesser-performing properties. Meanwhile, emboldened by low prices for these older malls, investors are beginning to snap up the properties, confident they can reposition and turn around malls that are on life support, or raze it to gain access to the often-valuable land to build apartments or other uses.
The litany of issues facing distressed malls and large shopping centers is well documented, with ills ranging from changing neighborhoods, increased competition from online sales, the appeal of newer lifestyle and power centers, consolidation of anchor stores and sharp downsizing by in-line tenants.
In a widely quoted report, Green Street Advisors has forecast that 10% of the nation’s 1,000 enclosed malls will fail by 2022, eventually converting to uses other than retail. Age appears to be a contributing factor. Of more than 200 malls and large U.S. shopping centers with 250,000 rentable square feet or higher that are hampered by vacancy rates of 35% or higher -- a clear marker for shopping center distress -- 86.5% were built before 2000, according to CoStar Group data.
Of these distressed regional mall, power center and community center properties, 43.5% were built in the 1970s and ‘80s, another one-quarter were built in the 1990s, and 17.5 % were built in the 1960s and prior. The average center in the distressed group was built in 1983 and had a vacancy rate of 50.6%.
Among the 44 regional and super-regional malls (usually malls of 1 million square feet or above) with distressed vacancy, the average rate was 54.5%, with older super regional properties built from 1960 to 1990 averaging just under 60% vacant. We're Not Overbuilt, We're Under-Demolished
"I don't think we're overbuilt, I think we're under-demolished," said Daniel Hurwitz, president and CEO of DDR Corp., a Cleveland-based REIT, during ICSC's recent Western States conference in San Diego. “When you have [tenants] looking for space and nothing new being built, and we're sitting at mid-90% occupancy levels, it's hard to argue we're overbuilt when they're scrambling to find 10,000 square feet."
"There is a sense of reality that we all have to come to that there are projects that are not going to lease. Retail has a finite lifespan and once you reach that lifespan, you can put up all the signs you want, and charge as low rent as you want, but that doesn't make [tenants] want to take the space." As DDR's Hurwitz makes clear, shopper's preferences have changed and demand for large enclosed malls is quite different than it was 20 years ago. Changes in shopping patterns and preferences is also readily apparent in the shrinking number of department stores and the consolidation among traditional shopping center anchors like Sears Holdings, Kmart, Best Buy, The Gap and Office Max.
All of those chains have announced plans to shut down stores in 2012. The announced closures for these five retailers alone could add another 15 million square feet of mostly mall and power center space to the market this year, according to analysis from Property and Portfolio Research (PPR), CoStar’s real estate analytics and forecasting company.
But analysts also see the closings and repositionings as a healthy process. As market forces cull weaker properties, successful malls grow stronger.
"Malls and buildings age. We don't design for the life-cycle of buildings like we used to 50 or 60 years ago," said Robert Yuricic, an architect with GreenbergFarrow, a retail-oriented design firm and the second-largest restaurant architect in the country. "Malls are designed for a much shorter shelf span and they need to be refreshed."
Many of the earliest malls were buildings connected by pedestrian walkways and common areas, similar to today’s lifestyle center. Many malls began to turn inward in the 1960s and ‘70s, with the typical suburban mall composed of department stores and smaller shops connected by a roof, essentially forming an air-conditioned cave, Yuricic noted.
Walking into such malls is "like going into the bowels of a casino, where the door seems to disappear and you can’t find your way out," he said.
"People want to go to what's new and shiny and if you don't give it a facelift, it becomes old and tired and not able to attract the younger, more chic crowd with more disposable income," Yuricic said.
Kristin Mueller, executive vice president and director of retail business development with Jones Lang LaSalle in Atlanta, has a simple message to those who would write their obituary: Malls are not dead.
"The vast majority of the malls in the U.S. will continue to be incredibly relevant and are thriving," Mueller said. "There are many indicators that show malls are going very strong; you see it in their sales performance and in the REIT stocks of those that own two-thirds of the malls in this country.
"There are many different ways that we as an industry are working with malls to make sure they're relevant for their shoppers and communities, usually through a combination of new retail and other alternative uses," Mueller said.
Mueller acknowledged that some, "perhaps more than a handful," of the country's stock of 1,200 to 1,400 enclosed malls are in serious trouble. "Those malls have usually been unfavorably impacted by their surrounding communities, or they’ve been outflanked by bigger, better competition" from lifestyle and power centers, Mueller said.
Distress is still a significant factor for these properties, even as the bear market for retail investment appears to be coming to an end and transaction activity is now at par with the average annual volume of the past decade.
About 11% of total deal volume by dollar value over the past four quarters was from forced sales, down from nearly 20% in early 2011 but well above the average 1% from 2000 to 2008, according to PPR.
It appears almost certain that the pipeline of distressed retail property will continue to flow, with plenty of commercial mortgage-backed securities (CMBS) loans backed by collateral that's behind on payments and carrying thin debt service coverage ratios.
These distress deals often reflect financing issues rather than prevailing market conditions. Not surprisingly, their troubles have drawn the attention of Wall Street rating agencies that are sufficiently worried enough about the widening gap between the country's best and worst performing malls to put out warnings that could further affect the supply of credit and financing to the mall sector.
Fitch Ratings said its "very cautious" outlook on U.S. malls has prevented the agency from rating some CMBS transactions this year. While it's fairly easy to understand the dynamics of the best and worst properties, the condition of the second-tier malls in the middle is more difficult to parse, Fitch said in a recent report.
Fitch-rated deals include about 1,150 retail loans of over $20 million, many secured by malls. Of these, 126 are already in special servicing and 44 assets are real estate owned (REO) and many are among the largest contributors to Fitch Ratings’ overall expected deal losses. Who Will Buy A Dying Mall?
In its own report last summer, Moody’s Investors Service also noted the widening performance gap between stronger and weaker malls. When a marginal mall defaults, losses can well surpass those typical for a commercial property loan.
"Renovating or reconfiguring an underperforming mall may cost many millions of the dollars," said Tad Philipp, director of Moody’s CRE research. "What’s more, should the location lose its viability for retail altogether, the value to revert to land less demolition cost [will produce] an even greater loss."
Overall, however, mall investment has actually been stronger over the past few years as a percentage of total retail investment than it was during the peak of the last cycle, said PPR real estate economist and retail specialist Ryan McCullough.
CoStar COMPs data for the largest U.S. markets shows that mall investment comprised 34% of total shopping center transaction dollar volume from 2010 to the present, up from 28% between 2005 and 2007. "I don’t think that investors have necessarily been scared off from malls due to the obsolescence of a subset of the category,” McCullough said. “Investors, however, are pickier about the quality of the mall properties purchased today, which is showing up in the pricing data.”
On a dollar-per-square-foot basis, malls with a vacancy rate of 5% or less traded at a 45% premium over those with higher than 5% vacancies from 2010 to present. During the 2005-07 market peak, the premium was a negligible 2%, he noted.
"The short of it is that investors are recognizing quality malls -- those with high occupancies, solvent anchor tenants, good population density and access to affluent shoppers -- as stable, low-risk, income-producing assets and will pay up for them today," McCullough said.
"Poor quality malls, on the other hand, are either not trading or selling at a steep discount, and perhaps are scheduled for demolition or conversion."
"As an industry, we're not going to start throwing up malls as the economy recovers," added JLL's Mueller. "In fact we stopped building malls a while ago and started to build lifestyle centers in niche infill locations between malls."
Instead, real estate services providers like Mueller and her JLL team are focusing on creative redevelopment and repositioning strategies for distressed properties. Often means changing out the type and size of the retail -- or considering non-retail uses, such as a university or health care facility. Mega-churches have taken over former anchor spaces. Others have become call centers and government offices.
Even malls that continue to thrive are being redesigned as town squares - adding more entertainment and service elements. Simon Property is remodeling 15 to 20 malls a year, adding such amenities as electric-car charging stations and stadium-seating theaters.
Malls today have to “provide a unique set of shopping, dining and entertainment experiences,” Simon's President and COO Richard Sokolov told the New York Times, including scheduling 20,000 events a year to draw traffic, such as cooking demonstrations.
Few thespians would turn down the opportunity to debut in New York City, and lately the same could be said of retailers. Be they of domestic or international origins, numerous purveyors hawking wares ranging from turtlenecks to tea leaves have decided to enter the Manhattan market recently. It's the right location at, apparently, the right time.
Practically every other week the summer, retail chains announced plans to venture into New York City for the first time. Thirty-five years after shoppers were first able to avail themselves of Irvine, Calif.-based ASICS american Corp.'s athletic footwear in the United States, the opportunity has spread to New York. The manufacturer signed a lease in June with Savitt Partners for 3,5000 square feet at 530 Seventh Ave. In July, Atlanta headquarters Teavana, seller of loose-leaf teas and teaware, made the commitment. The five-year-old chain linked a deal with the MP 1291 Trust to occupy ground-level space at 1291 Lexington Ave.
"...Toll Brothers, one of the country’s largest residential developers, has two condo buildings opening in the coming months: the Touraine, a 22-unit structure at 132 East 65th Street with prices from $1 million to $15 million, and 205 Water Street, in the Dumbo section of Brooklyn.
The latter, in a cobblestoned part of the neighborhood dominated by converted factories and warehouses, has 65 units. Prices will be around $850 per square foot, according to David Von Spreckelsen, the president of the Toll Brothers City Living division.
The building, designed by GreenbergFarrow, is seeking LEED Gold certification for environmental sustainability, and has apartments ranging from 550-square-foot studios to a 2,300-square-foot penthouse, Mr. Von Spreckelsen said. The list of potential buyers, he added, is more than 1,100 names long..."
Completed March 2011, GreenbergFarrow’s design of the new 40,122 square-feet North Raleigh Whole Foods Store attained the U.S. Green Building Council’s LEED® Commercial Interiors (v2.0) Gold Certification in April 2012, scoring 33 out of a possible 57 points. The attached video presents the store’s design and some of its key “green” features.
In addition, the store achieved the following percentages that contributed to its Gold certification:
81.83% reduced water 91.93% Energy Star compliant equipment and appliances 91.59% construction waste diverted from landfill 100% electrical usage offset by renewable energy credits
The 57,763 square-feet shopping center, developed by Regency Centers, attained LEED® Core & Shell (v2.0) Silver Certification.