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Developer Lowe has launched a new retail platform, Retail reVision. The platform is a strategic initiative to assess and reposition retail properties. Lowe has named Joel K. Mayer as EVP to lead the new initiative.
“Retail reVision looks at the available retail space and devises solutions that add value to properties and communities that solve the retail problem with non-retail options. We are in the middle of a large shakeout in retail that will leave many well-located retail properties, such as malls, community, lifestyle and power centers, in urban and suburban infill markets poised to benefit from repositioning and redevelopment with a variety of new uses that enhance neighborhoods while creating a new customer base for the existing retail,” Mayer tells GlobeSt.com.
There has been a shift in retail over the last several years, now accelerated by the pandemic, but Mayer asserts that the changes to retail go beyond the increase in ecommerce shopping. “While we are all keenly aware of the changes in retail over the past several years that have occurred as a result of online shopping, there have also been many other changes that have propelled a reduced demand for retail space, particularly for apparel businesses, when compared with what had been the status quo,” he says. “Beyond ecommerce, we have had an evolution in workplace apparel that has eliminated the need for two or more wardrobes. In the past we had work clothes and casual clothes, today people have a more all-purpose wardrobe.”
While Lowe had been working toward launching a retail platform, the pandemic accelerated the trends that they were already seeing in the market. In many ways, the market disruption made this an ideal time to launch the platform. “The pandemic simply accelerated the trends we had already seen,” he says. “Changes were in motion already so, if anything, it provides a bit more clarity as to what will be happening. Lowe has decades of experience in real estate, including multifamily, office and hotel properties, and we view this as an opportune time to deploy our multi-disciplined skills to re-envisioning and redeveloping well located, but underutilized and underperforming retail real estate.”
Although Lowe hasn’t changed its retail strategy, it is proceeding with caution as a result of the pandemic. “In the current environment we are even more careful in our evaluation of retailers and their balance sheets. Part of our process is an assessment of an existing retail property’s current tenant base, what is working, what we might attract and what is likely to fail,” says Mayer. “Understanding the retail is key to ensuring that it is attractive to the existing community and also to the potential new customers that we might bring with new development such as residential or office. Retail isn’t going away, there will always be stores and restaurants and spaces for socialization, but we think a different, more edited approach will serve the consumer demand much better.”
Lowe is targeting a diverse geographic region, with target markets including California, the Pacific Northwest and Mid-Atlantic regions, the greater Denver and Phoenix metropolitan areas and the Carolinas. It is launching the platform without investment goals. “We do not have specific goals, but will invest in and develop the projects that can provide the best results for each community and that meet our investment hurdles,” says Mayer. “We are targeting projects that range from $50 to $250 million.”