Retail is an essential component of vibrant urban environments, and for much of the past decade, retailers and retail investors have ridden an urbanization wave to reach shoppers in the city centers where they live, work and play. Now, high asking prices and premium rents in these fully developed communities constitute barriers to entry for many retailers and investors. As an alternative, some secondary markets are just beginning to densify, creating lower-cost opportunities with strong growth potential.
Up-and-coming markets need physical and social infrastructure if they are going to develop into urban hubs with a thriving retail component. Look for these indicators to help identify neighborhoods on track to capture that downtown feel and become the next live/work/play communities.
- Accessibility. Proximity to commuter lines or major freeways connecting residents to employment centers can be the lynchpin of an urban hub.
- Density. More people means more potential shoppers, diners and entertainment customers to support retailers and other businesses.
- Walking appeal. Pedestrian-friendly streets and sidewalks draw people out of their homes, workplaces and transit stations to shop, dine, seek entertainment and explore the area, supporting local retailers and other businesses in the process.
- Experiences. Communities that organize festivals, live music, movies in the park and similar group activities nurture the sense of community that draws crowds to local businesses.
- Infrastructure and safety. A town or district intent upon urbanization will invest in good lighting and well-maintained streets and walkways, making residents and visitors feel safe enjoying the community well into the evening hours.
- Enterprise zones, public/private partnerships. Great things can happen when state or local governments meet businesses part way. The availability of tax breaks, expedited permit review, tax increment reinvestment programs that generate funds for community improvements, and similar programs can accelerate growth and help new businesses make a strong start.
Examples of established urban cores dot the map from coast to coast, and they share the necessary ingredients of transportation access, walkable streets and mixed-use activity. Growth plans that call for offices, residential and other multistory buildings create the ground-floor retail opportunities that give communities their identity. Vibrancy comes from retail, and communities rediscovering their urban natures need retailers and retail investors to make their redevelopments succeed. The challenge, both for communities and for retail businesses and investors, is to find the right match.
– By Rick Rizzuto, Vice President, Florham Park, NJ.