Off to a Great Start in 2024: Beyond Place-Making, It's About Community Building

2024 has begun positively. In recent years, a compelling recurring focus in our client work has focused on community and neighborhood building. This encompasses various settings such as urban core, suburbs, rural, and exurban areas, involving new development, redevelopment, and adaptive reuse. Thus far, this emphasis persists in 2024.

At the core of our services lies the examination of market viability and feasibility for developments incorporating various uses, and the holistic integration of these uses in community building. Without getting too deep-in-the-weeds, our analytics tackle inquiries pertaining to land use, site design, planning, development, phasing, execution, and project management. When assessing the economic aspects of incorporating multiple uses in a town center, village, or town square (e.g., combining multifamily residences above ground-floor commercial spaces, upscale lifestyle branded hotels, breweries, boutique apparel stores, personal services, etc.) within a master plan, several questions arise: How many lots are designated for single-family homes? What is the pre-sale rate of lots before proceeding with the town center? How many multifamily units are situated in the town center, what is their composition, and what are the anticipated rental revenues?

Currently, our client work encompasses diverse projects, including a 165-acre site near Kahului Airport on Maui, a 600-acre development along the Florida Turnpike in Groveland within the northwest growth corridor of the Orlando MSA, multiple sites in Santa Ana, CA, approximately 4 acres of urban infill in the Westwood neighborhood west of Country Club Plaza in Kansas City, and a forthcoming project in Gunnison County, CO. We'll report back as these efforts progress.

In their extensive global survey on lifestyle changes titled "Building a Future-Ready City," ThoughtLab revealed several significant findings. Notably, respondents expressed intentions to shop and dine close to where they live, support smaller local businesses, and prioritize living in areas conducive to walking, biking, or scootering within their city. (ThoughtLab 2023)

We wholeheartedly agree. In fact, we perceive our work within this wider framework of community building.

Feel free to share your thoughts and current projects with us. You can connect with Jerry, Dan, or Jeff for further discussion.

Celebrating Client Achievements in 2023: Success in Real Estate, It's a Long Game

Showcasing specific client achievements in 2023 is difficult due to the fact that all our clients experienced varying degrees of success during this past year.

In 4th quarter 2023, the Derby, KS, Planning Commission and City Council approved Wichita, KS-based Garvey Ventures plan to build Greenwood Village, mixed-use development on 154-acres in this Wichita suburb. The plans are to develop a walkable, master planned mixed-use community that align with the Vision Derby 2024 Comprehensive Plan. We conducted analysis on the market supportability of the mixed-use project and prepared a set of development strategies based on the findings. Congratulations to the team, and thank you, Tim, for involving us at the very beginning of this project. (Read more in this Wichita Business Journal article.)

In July 2023, Colorado-based LiveForward Development and Texas-based Stayble Real Estate were preparing to go before the Planning Commission and City Council for the City of Louisville in Boulder County, CO, to seek rezoning of about 2.5 acres within the Highway 42 Urban Renewal area. We provided the mixed-use market supportability analysis used in the rezoning application package. The Planning Commission approved the rezoning at their September 14, 2023, public hearing. Congratulations to Tim and Scott Kilkenny, Partners of LiveForward Development, and Hunter Floyd and Nick Coker, Partners of Stayble Real Estate. Thank you for involving us on your team! (Read about the project on the City of Louisville website.)

In 2023, CIM Group and Centennial Yards saw significant progress toward this major mixed-use development of 50-acres off of Downtown Atlanta, known as “The Gulch”, and adjacent to the Mercedes Benz Stadium and State Farm Arena. New residential, luxury hotel properties were delivered as well as strong demand by retailers and restaurants to sign leases ahead of the 2026 FIFA World Cup. Our contribution was an extensive demand analysis of consumer spending potential that is being used by the leasing team. Much continued success to the team and investors involved in this significant development! Thank you Nick Garzia and Brian McGowan for the opportunity. (Read more about Centennial Yards in this Bloomberg article.)

We have been working with Cincinnati-based North American Properties on the Riverton mixed-use master planned development in Sayreville, NJ, since 2017. In December 2023, the New Jersey Economic Development Authority awarded $400 million in tax credits for this $2.5 billion project. We provided the economic impact analysis and other tailored market reports used in the application to the Aspire program. Congratulations to Kevin Polston, North American Properties, and the entire team involved in this major event. Thank you, Kevin, for our involvement on the team! (Read more in this Home News Tribune article.)

Our collaboration with Omaha-based Jasper Stone Partners on Avenue One, a 200-acre mixed-use master planned neighborhood in West Omaha, began in 2015. In September 2023 a development partnership was formed between Jasper Stone and Memphis-based Poag Development and JLL, the leasing partner. Together this partnership will create a lifestyle retail mixed-use development on about 80-acres at the SEC of West Dodge and 192nd. We led this process for Jasper Stone Partners to identify a retail development partner and could not be more pleased with the outcome. Congratulations to the Jasper Stone, Poag Development, and JLL team! And thank you Curt Hofer, Jeff Hofer, Dakoda Kilzer, D.J. Hinman, Josh Poag, and Greg Whitney for our involvement on the team. (Read more in the JLL press release.)

The organizations at the forefront of these initiatives, much like all of our clients, exemplify the timeless wisdom that building wealth in real estate, as in life, is a journey that requires patience. Wishing everyone the achievement of significant milestones on this path!

NJ awards $400M tax break in Riverton Raritan Bay development project

We have been working with Kevin Polston and his exceptional team at North American Properties on Riverton since 2017. This is a huge milestone for this transformative project that will positively influence the community of Sayreville and this Northern New Jersey economy. Read more about this project in this article.

Our contribution taken on various shapes over these years. Initial focus was on getting the 300+ acres entitled and zoned as a mixed-use development. That included 2M SF of new residential and commercial space, including 1,300 new residential units, and a major lifestyle retail, restaurant, and entertainment component. The strategies, marketing, and presentation materials used information from our highest-and-best uses and feasibility analysis.

Once the entitlement and zoning was accomplished, our scope shifted to the economic and market impact analysis required of applicants to the New Jersey Economic Development Authority’s Aspire program, originally known as the Economic Redevelopment and Growth Grant.

We also conducted bespoke economic and market reports that addressed unique circumstances associated with the project during the pandemic of 2022, and various nuanced requirements of the Aspire program.

We are very grateful to Kevin and North American Properties for the opportunity to serve on the Riverton team!

No better way to describe what we do for clients than to show results.

A Holistic Place-Making Framework: 7 Types of Capital for Real Estate Development

The U.S. Federal Reserve Bank started its first of 10 rate increases on March 16, 2022, in an effort to return the inflation rate from a year-over-year high of 9% in June 2022 to the fed’s target rate of 2% (BLS All Items).

Today, there is no doubt that the rate range of 5% to 5.25% has impacted the capital markets, home prices, construction activity, and various others aspects of the macroeconomy. The YOY inflation rate stood at 4% for all items in the BLS basket as of May 2023.

We will address the macroeconomic impacts on residential and commercial real estate investment, acquisition, and development activity in a future post. The purpose here is to take this opportunity to present seven types of capital that form a holistic framework for master planning, programming, and development.

This is an adaptation of community development research by Cornelia and Jan Flora at the University of Iowa. (Citation: Flora and Flora 2008)

• Natural Capital: This includes the environment, rivers, lakes, wetlands, wildlife, etc.

• Cultural Capital: Ethnic festivals, multi-lingual population, traditions, heritage, and strong work ethic. Cultural capital influences how creativity and innovation emerge and is nurtured.

• Human Capital: The skills and abilities of residents as well as the capacity to access outside resources and knowledge to increase understanding and to identify promising practices (e.g., life sciences, biotech, adtech, software-as-a-service, etc.).

• Social Capital: The connections among people and organizations or the social glue that makes things happen.

• Political Capital: The ability to influence standards, rules, regulations, entitlements, zoning, and enforcement.

• Financial Capital: The financial resources available to invest in economic and community capacity building, underwrite the development of businesses and real estate properties, support civic and social entrepreneurship, and accumulate wealth.

• Built Capital: The infrastructure that supports the community, such as telecommunications, industrial parks, main streets, water and sewer systems, roads, etc.

The practical application to commercial real estate development is the capacity to create, curate, and cultivate businesses and industry clusters that support growth in and development of residential housing, tenants in office spaces, customers in grocery stores, specialty food businesses, restaurants, and specialty retail shops, guests in hotels, museum-goers, and other amenities that together form a sense of place.

Implication: Those type of outcomes yield better returns on capital investment in residential and commercial real estate development.

Mare Island: How the Synergy of People, Innovative Ideas, and Resources are Creating a Hip Place

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Let’s head to Mare Island in Solano County, CA, for an example of what place-making in-the-making looks like.

Mare Island Naval Shipyard was one of the oldest and most distinguished shipyards in the United States. Established in 1854, Mare Island served as a crucial naval base for over 140 years before being closed in 1996.

Dave Phinney — the guy wearing the blue polo, front-left, in this photo — founded Orin Swift Cellars brand, which includes the “cult wine” called The Prisoner, and started Mare Island-based Savage & Cooke distillery and restaurant. He and Memphis-based Gaylon Lawrence, Jr., formed a partnership, The Nimitz Group, which bought Mare Island from Lennar and became master developer in 2019.

In 2020, the Nimitz Group hired Nashville-based Southern Land Company as their developer. SLC is a real estate development company that crafts beautiful homes, multifamily properties, and master-planned neighborhoods. In 2022, the Mare Island Company was formed by The Nimitz Group and SLC. To give credit where it is due, check out their website. Read their vision for Mare Island, review the comprehensive master development and site plan, and explore development updates and community workshop events. It is an extraordinary undertaking!

Our involvement occurred in 2020, and focused on the economic modeling for the Connolly Street Corridor and the Napa River waterfront. By that I mean we created a redevelopment framework and set of actionable strategies that were informed by demand-and-supply market trend forecasts, economic viability analysis, and sales forecasting for the multifamily residential, office, retail, food, and beverage components to the corridor and the waterfront specific plan. The findings from our residential and mixed-use analysis were used by the Nimitz Group and Southern Land Company to successfully get approval of an updated master plan and entitlements from the City of Vallejo, CA; and to further the programming and development phases.

Fast-forward to today. It is rewarding to read an article by Thrillist, 6 Reasons to Make Mare Island Your Next Weekend Trip.

This is definitely one of the most mind-blowing projects I have worked on and with an exceptionally brilliant team. A huge “thank you” to the catalysts of Mare Island for involving us in the effort!

We Need to Go Beyond "Mixed-Use": A Development Framework for the Economics of Integrating Uses for Place-Making

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Unique cultural-social-commercial experiences can be found around the world (e.g., Atlanta’s Ponce City Market, Chelsea Market in NYC, Quebec City’s Public Market, or Monastiraki Square in Athens, Greece), of course. You can also explore your own neighborhood or city where the market is evolving well beyond the idea of a “mixed-use” development and toward the authentic integration of uses that make a place an experience.

For example, the warehouse district of the late 1800’s that is morphing into a place for entrepreneurs and start-up businesses with new apartments, condominiums, and a vibrant local food scene. The beef-packing plant of the early 1900’s that is now a food hall surrounded by residential, hospitality, and commercial properties integrated in a walkable streetscape. Or the shopping mall from the 1960’s or 1990’s that once served as the center of department store shopping and is changing into a new style of urban village in the suburbs.

This is part of a process that can be thought of as place-making — a synergy involving how people live, work, shop, socialize, and visit. That process is part of a natural economic evolution that runs parallel to every new generation.

Here is a development framework to move beyond “mixed-use” to the economics of integrating uses for place-making in markets of any size across the globe.

• Vision: Begin with story telling about the meaningful ways that people think, feel, and create enduring connections.

• Model the Economics of Place: A more recognizable term is “highest-and-best-uses” feasibility analysis. This addresses issues such as demand-and-supply market trends, economic viability, uses and product types, land values, rents and price points, sales forecasts, costs, and market timing for the residential, hospitality, restaurants, entertainment venues, retail, public realm, and other potential features.

• Conceptual Master Development and Site Plans: This flows from the economic modeling and include design charrettes. That is, intensive planning workshops or sessions involving collaboration among designers, architects, local communities of interest, city planners, and civic-social leaders. This process delivers a conceptual master development and site plans that imagine how the uses are integrated in such a way as to create a place.

• Strategic and Executable Plan: The old proverb applies here - “A vision without a plan is just a dream. A plan without a vision is just drudgery. But a vision with a plan can change the world.” Make sure the plan is flexible and open. Does not need to be perfect. Just have one and use it.

We are in the midst of a renaissance of sorts. Residential and commercial real estate owners, developers, and professionals in the U.S. and around the world are adopting more holistic, place-making approaches that integrate uses for people to create authentic connections and memories. To live well and lead a vibrant lifestyle.

Would love to hear your thoughts on this framework. More importantly, please share what you and your colleagues are working on.

Diverse housing mix, good for home ownership and place creation

We have been working in Atlanta, Austin, La Jolla and Laguna Niguel (CA), and areas of Northern New Jersey. These are residential and mixed-use development projects, mainly.

An interesting opportunity has presented itself in the for-sale housing market. Mortgage rate increases in the past year has tapped-down demand for homeownership. In most markets, the number of listings is down, days on market are longer, and price appreciation is at a smaller rate of growth. However, supply of existing homes remains tight and it is still a sellers market. That pushes buyer demand toward new home construction.

Take the Austin housing market as an example. Single-family detached homes were listed for-sale on average 34 days in March 2022 and 87 days in March 2023. For-sale listed townhomes spent 26 days and 37 days, respectively. Despite the impact on median list price for single-family homes due to rising mortgage rates, the sales velocity for townhomes remains relatively strong.

The opportunity is to introduce townhomes, cottages, and duplexes especially as new construction in a neighborhood setting that is rich in commercial and public space amenities (e.g., restaurants, coffee shops, fitness, personal and financial services, pocket parks, etc.).

Daniel Parolek of Opticos Design coined the term for this opportunity in 2010: the “missing middle”. Check out what he designed for Omaha-based residential developer, Jerry Reimer of Urban Waters: Bungalows On The Lake at Prairie Queen. The continued redevelopment of Mueller airport in Austin is another great example, which was started by a partnership between the City of Austin and Catellus Development Corp.

Given the trajectory of the for-sale housing market and the growth in new residential and mixed-use development projects, incorporating a diverse housing mix addresses two key goals: increase homeownership opportunities and create a walkable neighborhood-level place.

Front & York: Integration of a new residential mixed-use building into the urban fabric of DUMBO Brooklyn

While working with CIM Group on Front & York in DUMBO (Down Under the Manhattan Bridge Overpass) Brooklyn, most of my time was spent walking neighborhoods around urban pocket parks like Brooklyn Ferry Park, Brooklyn Bridge Park, Cadman Plaza Park, and Whitman Park. This is another 15-minute urban village and it is best experienced on foot, by bike, and by using the nearby York Street metro subway station that leads to Manhattan.

A bodega on nearly every street corner like Wholesome Farms Market, Bridge Fresh, Peas & Pickles, and DUMBO Market (opened in 2019). Cool specialty stores like POWERHOUSE Bookstore and M Collection Home. And, of course, a plethora of really good specialty food places like Bread & Spread and Lassen & Hennigs.

In fact, there are about 25 food and beverage stores, 7 furniture and home furnishing stores, 20 health and personal care stores, and 107 sit-down restaurants in a 5-minute walk around Front & York. The 30,000 and some residents in this area spend an annual $81M for groceries and $55M at restaurants, which is 14% more than the U.S. average consumer. Ironically, the estimated number of cars per household in this 5-minute walk area is 0.34! So this urban economic habitat is characterized by residents that support neighborhood businesses.

I mention these places because the challenge and opportunity with Front & York was to integrate a new residential mixed-use building into the urban fabric of DUMBO Brooklyn. You can read about the 408 for-sale condominium units and 320 rental units at Front & York in articles published by New York YIMBY and the three-level Life Time. Read about some of the tenants in this New York Times article, too.

Appears that the integration, while not necessarily without notice, is moving right along. Nicely done CIM! Visit Front & York and have lunch in the neighborhood on your next trip to Brooklyn.

Lake Nona: Clustering 3 key components makes it a "15-minute" city of tomorrow, today

When our friend Andy Odenbach, former President of Lake Nona Realty at Tavistock, invited us to tour Lake Nona, a 10,000 acre mixed-use planned community in Orlando, I expected to be inundated with Walt Disney World and Universal Orlando. What I found, instead, was a sophisticated display of Carlos Moreno’s “15-minute city”, an urban planning model idea from 2016.

Truly, a 15-minute bike ride from Boxi Park and Lake Nona Town Center gets you to the U.S. Tennis Association National Campus, KPMG Lakehouse - a $430M corporate training campus, Laureate Park Aquatic Center, Laureate Park Elementary School, Nona Adventure Park, and a multitude of neighborhoods. Adjacent to the Town Center is Nemours Children’s Hospital, Lake Nona Medical City (30,000 employees), University of Central Florida Hospital, VA Medical Center, and University of Florida Research & Academic Center.

In my observation, there are three key clustering components that make Lake Nona a city of tomorrow, today:

• Family-Centric:Lake Nona is tailor-made for families. Good public schools within walking and biking distance from home. While academics are a priority, so is having fun as evident in the plethora of family-focused places like the aquatic center.

• Health & Wellness: The layout of Lake Nona favors an active outdoor lifestyle. People out walking, cycling, jogging, swimming, playing tennis, and interacting with neighbors.

• Innovation/Knowledge Creation: No better way to describe this cluster except by an example. Lilium is one of the key employers at Lake Nona. A German aviation company, Lilium is working on building a 6-seater electric air taxi capable of vertical take-off and landing. Lilium has located its first U.S. “vertiport” hub at Lake Nona. Add Cisco, GE, Hitachi, Signet, Siemens, and others and Lake Nona offers a strong concentration of occupations in medical, technology, and professional business services.

Here are some intriguing statistics about Lake Nona: 41% Hispanic and 59% Non-Hispanic residents, $165,000 average household income versus $96,000 for Orlando, and 57% have a Bachelor’s degree or higher versus 33% for Orlando.

That translates to $445,000 median home value at Lake Nona versus $300,500 for Orlando; and average multifamily rents enjoy a 17% premium over Orlando ($2,105/unit versus $1,804/unit, respectively).

There is too much to cover with a brief post. Suffice to say, spend some time with a real estate agent at Lake Nona on your next trip to Orlando!

Top markets for residential and commercial development in the U.S.: What is missing and what are you doing?

We are often asked, “Where should we look for real estate acquisition and development opportunities?” A conversation on long-term strategies and actionable steps is guided by putting a large map like this on the wall.

This map visualizes broad areas that are forecasted to increase in population by 5% or more by 2027. The denser growth areas appear in whiter shade. Yes, population forecasts are just a single data point. However, taken in consideration of other neighborhood-level data points means that this is a starting point for building a long-term real estate development pipeline.

Summary take-aways:

• DFW-Austin-San Antonio-Houston: This tech, health care, and energy corridor remains one of the most economically productive areas in the U.S.

• Silicon Slopes of Ogden-Salt Lake City-Sandy: This branding began over 10 years ago and represents extensive public-private effort to recruit innovative companies and grow local companies from an entrepreneurial ecosystem. Companies with significant employment based in the area include Adobe, Ancestry.com, eBay, Garmin, Google, Microsoft, and Oracle.

• Raleigh-Durham: The thriving tech and life sciences industries make this one of the fastest-growing and most affluent cities in the Southeast.

• Nashville-Franklin-Murfreesboro: This has been one of the nation’s top performers in terms of job and population growth since 2010.

• Fort Collins-Broomfield-Denver-Castle Rock: The Denver metroplex is a bona fide tech market like Austin, Raleigh, and the emerging nature of the Salt Lake City MSA.

• Atlanta-Sandy Springs-Roswell: Atlanta contines to benefit from strong job growth. A handful of large corporations are set to add thousands of high-paying jobs over the next few years, such as Microsoft, Google, Norfolk Southern, and Thyssenkrupp.

Strategies for sizing-up market and financial return opportunities are informed on sound market insights on the highest-and-best uses of real estate.

This is what we do, soup-to-nuts: from residential and commercial real estate strategy to execution.

The questions for you are: What markets are missing, why, and what are you doing?

Meadowbrook Park, Kansas City: From Fairway to Live, Work, and Play

Meadowbrook Park is one of the most creative projects I've been a part of.

Kansas City-bsaed VanTrust Real Estate converted 136-acres of the former Meadowbrook Country Club in Prairie Village, KS, into an idyllic neighborhood on 56-acres seamlessly embedded in Meadowbrook Park on the remaining 80-acres. Language will not do justice to this beautiful development. Short of visiting Meadowbrook, look at the photo and video gallery.

I had the privilege of working on the Inn at Meadowbrook, a 54-room luxury boutique hotel that sits in the center of the development. Verbena is an upscale restaurant at The Inn, which won the Wine Spectator Award of Excellence in 2022. Their sister restaurant, The Market, offers seasonal small plates for coffee, breakfast, lunch, and dinner.

A pedestrian trail throughout Meadowbrook Park ties together the luxury single-family homes, twin villas, senior housing, and The Kessler multifamily residences with the water and park features.

Meadowbrook is a charming, welcoming place in the heart of Kansas City. Check it out on your next visit. Better yet, enjoy a stay at The Inn.

Thank you, VanTrust team, for the opportunity to work with you on this project.

Omaha, NE: Attention, This is Not Fly-Over Country

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Omaha, NE, is one market that is not typically on the radar of too many national residential and commercial real estate developers. It should be.

Start first with Fortune 500 companies - Berkshire Hathaway (#3), Aflac (#137), Union Pacific (#141), Pacific Life (#313), Peter Kiewit Son’s (#339), and Mutual of Omaha (#337). Layer in TD Ameritrade (now Charles Schwab), Gavilon, Valmont, Gallup, the University of Nebraska Medical Center, Creighton University, Methodist Hospital System, CHI Health System, and Boys Town National Research Hospital.

What this yields is an economic engine that drives growth and development of this regional midwestern city in excess of 1.0 million people. An economy that weathers downturns better and recovers more quickly from those downturns than most coastal U.S. cities.

Pick your spot and there is an opportunity for development from urban infill in and around Downtown Omaha, along the Dodge Street corridor, all the way west toward Elkorn. For example, the subarea between 180th and 204th and West Dodge ranks 28th out of 2,332 submarkets tracked by CoStar in multifamily projects under construction as a percent of total inventory — 60%. And with multifamily properties trading at 5.5% cap rates, it is one of the best places for residential development in the U.S. And we all know what follows rooftops — retail stores, grocery stores, restaurants, hotels, office buildings, etc.

Omaha must be on your radar. It will not disappoint!

Bishop Arts District: 40 Years of Authentic Place-Making

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In April 2022 I was working on a project in the Wynnewood North area of Dallas. During my visit to Dallas, I reached out to my friend David Levine at Urban Partners. David and his business partner, Robert Bagwell, developed the West Village District in Dallas, among other cool projects in Atlanta, Austin, Boston, Denver, and elsewhere.

David gave a driving tour of the amazing development projects in and around Downtown Dallas. The tour ended with a walking tour of the Bishop Arts District in the North Oak Cliff neighborhood just south of Downtown Dallas and dinner at the Italian restaurant, Paradiso.

There is a lot of history in The District. Especially interesting is the seed of revitalization as an art district that was planted by the “Oak Cliff Four” — George T. Green, Jack Mims, Jim Roche, and Robert “Daddy-O” Wade in the late 1970’s. The “Texas Funk” art movement is attributed these four artists.

The Bishop Arts District today reflects the vision of Dallas developers Jim Lake, Sr., and Jim Lake, Jr. In the 1980’s the father started buying up the old buildings with an eye toward neighborhood revitalization. His son, through Jim Lake Companies, carried forward that vision in the 2000’s and continues to curate The District to this day. Fabulous work!

Check out the Bishop Arts District on your next trip to Dallas. It is a national model for authentic place-making. Thank you, David, for the introduction to this place!

The Granary District: Community-in-the-Making in Salt Lake City

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My first visit to the River North Art District in Denver was in 2015. I was meeting with colleagues at studioINSITE. Their office was, and still is, in the really funky Taxi Campus designed and developed by Denver-based Zeppelin Development in the late 1990’s. It blew my mind —how a once unsafe industrial area was going through a transition to a modern day cosmopolitan place.

INDUSTRY, like Zeppelin, was the other catalyst to today’s blossoming RiNo area of Denver as evident by the volume of new development projects and skyrocketing land values.

INDUSTRY is now the catalyst to a parallel universe known as the Granary District in Salt Lake City. My intro to the District was by my friends Gregory Walker and Todd Johnson at SLC-based architecture and design firm WOW Atelier. It was 2021 and we were socializing a project that focused on the public realm as a design feature to first “build a there, there” and then add strong community-building amenities such as residential, hospitality, food, public markets, restaurants, maker space, services, etc.

Upon reflection, the Granary District is to Salt Lake City what RiNo is to Denver’s social fabric.

I encourage all my colleagues to closely examine this area. If you happen to have capital to deploy, then add this to your market due diligence as land values are rising rapidly.

Bottleworks District: Place-Making through Adaptive Reuse

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I was visiting Indianapolis in April 2022. We rented with friends an Airbnb for the weekend in the Broad Ripple Cultural District. While there, I paid a visit to a project that Hoffman Strategy Group worked on in 2016: the Bottleworks Hotel and the Bottleworks District.

This is an exceptionally well-done adaptive reuse of the former Coca-Cola Bottling Plant by Beloit, WI-based Hendricks Commercial Properties. The District sits just outside the northeast corner of Mile Square, Downtown Indy, on Massachusetts Avenue. Hendricks converted all the buildings in such a way as to preserve and enhance the art deco qualities from the 1930’s. Check out the pictures on the website and on Instagram, @BottleworksIndy.

Hoffman Strategy Group worked on the merchandise plan and strategy for the Bottleworks District. It is so exciting to see what reality looks like six years later: The Garage Food Hall, Blue Collar Coffee, The Fountain Room restaurant, Sundry & Vice bar, Living Room Theaters, Sandbox VR, Good Neighbor clothing, office spaces, and much more.

On your next visit to Indy, I recommend at a minimum that you enjoy a meal at any one of the restaurants in The District. Or, just go all out and spend the weekend at the Bottleworks Hotel. Leave the car behind. This is a very walkable area. Enjoy!

Markethalle Im Viadukt: An Innovative Farm-to-Table Neighborhood Market

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I have been wanting to share this marketplace since November 2022, however, it is in Europe, and I did not know how well it would be received to an American audience. So here it goes.

Let me introduce you to Markethalle Im Viadukt in Zürich, Switzerland. The English translation is simple: the market hall in the viaduct. Each of the 30 or so buildings are built into 36 bridge archways for a total floor area of about 215,000 ft.² to create a neighborhood shopping district. I was staying at the Storchen Hotel in Old Town Zürich, so it was an easy 15 minute ride on the #4 tram.

This place has the coolest little artisanal shops. Each cannot be any bigger than 500 ft.² to maybe 1,000 ft.². For example, check out Tritt Käse. This little cheese shop had the scent of cheeses so big that it hit my nose before stepping inside the building. Marvelous! Want some charcuterie with that cheese? Check out at Südhang am Markt.

Get outfitted for your hike in the Alps at Arc’teryx in viaduct #27. They claim to be the only brand store in Switzerland.

Just imagine preparing a meal for friends and family using ingredients purchased from these culinary geniuses located in one market and that market is in your neighborhood. Or having dinner at Restaurant Viaduct which has the following tagline: “Fine dining can also be a good deed: Eating at Restaurant Viadukt supports a good cause because the restaurant works with young people who are preparing themselves for their careers.”

Markethalle Im Viaduct reminds me of The LAB Anti-Mall (40K ft.²) in Costa Mesa, CA, Chelsea Market (1.2M ft.²) in the Meatpacking District of NYC, and Union Market District (25K ft.²) in Washington, D.C. The commonality is the philosophical approach to commercial real estate development: small, artisan shops, rooted to community.

What I especially like about Im Viadukt is that its footprint blends-in with the neighborhood. Noticeable but not in an intrusive way. A manageable place to shop. Dwell for an hour or more. Time goes by without notice. Exceptional guest engagement. The building is 100% occupied and my hunch is that the tenants stay long-term. Space is coveted.

If you find yourself in Zurich, then go visit. Otherwise, let’s find ways to create this type of authentic marketplace in the U.S.

The New Hawthorn in Vernon Hills has more in common with the Ancient City of Ur than you would think. Why does that matter?

In 2022, I was working on the revitalization efforts of the famous Restaurant Row in the northwest Chicago suburb of Wheeling, IL. Running along Milwaukee Avenue, this trade corridor is well-known in Chicagoland for its local dining establishments that date to the 1970’s.

This area is near the old Westfield Hawthorn Mall in Vernon Hills. I visited Hawthorn Mall, as it now called, to observe progress of its major redevelopment by Dallas-based owner Centennial. That work began with Focus, an innovative Chicago-based design, development, and construction group. Focus led the mixed-use redevelopment with a project called “Hawthorn Row”. Beginning in 2021, they started construction of an “open air Main Street-style retail center” that includes 311 luxury apartment units in space that once was occupied by Sears.

Conceptually, the redevelopment effort of Hawthorn Mall is like the ancient City of Ur in Mesopotamia around 2000 B.C. You may well ask, Huh? Stay with me a second. The Sumerian’s, who built the City of Ur, had an ideogram for market - Y. It represented the idea that the market functioned at the intersection of commercial trade routes. And, therefore, people built the roots of a society, a place, at that intersection.

The shop-lined streets as shown in the new Hawthorn image (top) is akin to the earliest urban form of the open place market in Ur (bottom). Viewed more broadly, however, neither Hawthorn Row nor the Hawthorn Mall is about creating a new “mixed-use retail center” by building apartments in empty parking fields. It is about creating a place at the intersection of commercial trade and residential habitation.

Why this matters is because key lessons and concepts from the history of city-building and place-making throughout the world, and time, apply to residential and commercial real estate development in the 21st Century. This necessarily encompasses urban design, planning, and development and balances that with the economics of realizing accretive capital returns on real estate.

Hat’s off to Centennial, Focus, and their co-development partners!

Westside Provisions District, Atlanta: New Wine in Old Bottles, Creating a Vibrant Neighborhood from a Defunct 20th Century Meatpacking District

Source: Westside Provisions District Website

While in Atlanta recently working on Centennial Yards by the Mercedes Benz Stadium, I stayed at the Epicurean Autograph Collection across from the newly opened 19-story Google Millenniumin Midtown. Being so close, I had to visit Westside Provisions District.

It’s been around awhile. Michael Phillips, Kathleen Walker, and Arnie Silverman started this neighborhood-level adaptive reuse development around 1996 and finished in 2008, or so. It’s a development ahead of the times and endures today as a dense, walkable area that is anchored by the clustering of three core components.

The residential cluster is represented by nearly 4,000 multifamily units in mid-rise and hi-rise buildings, of which the oldest building is 2008. Another 560 units are under construction and 2,215 units are in final planning or proposed and going through the planning process. That will increase the density of an already dense space of about one mile.

In that same 1-mile area is the workplace component. There are 48 office buildings with 2.1 million square feet of space, a mix of new and old. Another 470,000 square feet currently under construction and 300,000 square feet is in final planning. The Interlocken is a good example of newly built office space. At 320,000, this 8-story building was built in 2021. Wework takes up 39,000 square feet, Slater Hospitality is 38,640 square feet, Airbnb is 37,960 square feet, Puttshack is 25,000 square feet on ground floor.

The third core is specialty retail, dining, and a design district. Aside from the 480,000 square foot IKEA store nearby, close to 1.0 million square feet of street retail and dining space are in the 1-mile area. I am calling it a “design district” because it reminds me of the Design District in Dallas. CB2, Design Within Reach, Room & Board, Brick + Mortar, Serena & Lily, and Framebridge home accessories are located at the Westside Provisions District. Layered in is Sid Mashburn men’s apparel, Anthropologie, Warby Parker, Lululemon, and a mix of good dining options.

What is fascinating about Westside Provisions District is how the clustering of these three core components has created an enduring vibrant neighborhood from an area that was home to a large-scale meatpacking plant, White Provisions Company, in operation from 1910 to 1963.

This adaptive reuse of an area and its buildings is the genius of Phillips, Walker, and Silverman, and later, in the 2000’s, Jamestown Properties. It continues to serve as analog to today’s urban mixed-use developments.

One Paseo: A Gorgeous Southern California Lifestyle

Source: TCA Architects Website (2023)

While in La Jolla, CA, recently working on a project near the University of California - San Diego, I paid a visit to Kilroy Realty’s One Paseo in the Northern San Diego community of Del Mar Heights. One Paseo delivered in 2019-2020 and is across the street from Donahue Schriber’s Del Mar Highlands Town Center (now owned by First Washington Realty). It is a great juxtaposition of two very different times for residential and commercial development.

The Town Center is a beautiful Ralphs-anchored power center built in 1989 and modernized in 2022. At its core, it is a shopping center and a really good one.

One Paseo’s brand, however, is “the best outdoor retail experience in North County.” Except, while the retail, food and beverage operators make up 96,000 SF, it is clustered with 286,000 SF of Class A office in two buildings and 608 luxury apartments. Of the 612,000 SF total, 84% of this development is in the office and apartment buildings. North Italia, Postino WineCafe, Tender Greens, CAVA, Le Macaron, Butchery, Serena & Lily, Pigment, Lululemon, Soulcycle, Drybar, and other very well-curated tenants make up 14% of the total square footage.

Therein lies an innovation in development. One Paseo’s conception and execution marks the dawn of a new era in residential and commercial real estate development. Hat’s off to TCA Architects (residential component), Ware Malcomb (retail component), and Gensler (two office buildings). This is about more than being the “best outdoor retail experience”. One Paseo is more than the sum-of-its-parts. It is about community-building.

Congratulations to Kilroy, TCA Architects, Ware Malcomb, Gensler, and the people involved in curating the tents. Well done!

Check out @onepaseo on Instagram.

Market Analytics Aid in Parties Reaching Common Ground to Build A New Downtown for the City of Eastvale, CA

On May 11, 2022, the Eastvale City Council approved an ordinance that allows for a 20-year development agreement by and between the City of Eastvale, CA, and Irvine, CA-based The New Home Company that will result in creation of the new Downtown Eastvale as defined in the Leal Master Plan of 2022.

Many aspects of this project are unique. In brief: Eastvale, CA, part of Riverside County in the Inland Empire region of Southern California, was incorporated in 2010. That is 277 years after the first planned city in the U.S., Savannah, GA, was founded in 1733. For 176 years the land, about 495,000 acres, was used for farming and the dairy industry and was formerly known as the Leal Ranch Property. The City of Eastvale adopted the Leal Master Plan in 2017 to facilitate the development of the 153-acre Leal property. The Leal property boundaries are 58th Street, Hamner Avenue, Limonite Avenue, and Scholar Way. The master plan established the vision for a mixed-used downtown with public space, a civic center (i.e., city hall, library, police station), and a fire station. The New Home Company purchased the 153-acres in 2021 and the City Council approved amendments to the 2017 plan on May 25, 2022 allowing the plan to move forward.

The New Home Company builds beautifully designed homes in “progressive urban villages…surrounded by desirable community amenities, showcasing smart planning and providing easy access to the city’s” they build within. Check out their master plan communities, such as Russell Ranch in Folsom, CA, McKinley Village in East Sacramento, and The Cannery in Davis, CA. The Cannery is California’s first farm-to-table “new home community” that features parks, a recreation center, pools, boutique retail, and an urban farm. The New Home Company’s brand and urban style brought to the Leal property creates a transformative core to the City of Eastvale and the new downtown.

In July 2021, A.J. Jarvis, President of The New Home Company’s Southern California division, Matt Gibson, Corporate Vice President of Land Acquisition, and Peter Carlson, President of Carlson Strategic Land Solutions, brought to Hoffman Strategy Group an interesting problem to solve: Of the 153-acres, what is the optimal amount of land to set aside for market-supportable commercial uses for a future downtown core of Eastvale, CA?

Hoffman Strategy Group’s analytic framework modeled the supply-and-demand building blocks of a mixed-use center: residential, retail, commercial, and civic and public space. Quantitative and qualitative analysis was guided by four pillars in downtown development: create a “magical destination”, maximize energy and vitality, activate mobility, and build a core economic engine. The analysis considered the changing and evolving nature of brick-and-mortar retail, the existing 1.7 million SF of retail GLA in big-box power centers and grocery-anchored centers along the 2-mile corridor of Limonite Avenue and emphasized that significantly more rooftops are necessary to drive demand for retail and commercial activity.

The market analysis started with defining a geographic trade area for “Downtown Eastvale”. An extensive market tour, analysis of geo-spatial movement patterns of consumers using anonymized mobile device data, population and household growth forecasts at the neighborhood level, and identifying new commercial growth areas aided in determining trade area size. For that trade area, the demographic, economic, and psychographic characteristics of household consumers were analyzed for trends in spending potential on housing, retail, groceries, apparel, fast food restaurants, sit-down restaurants, and e-commerce and translating that potential to market-supportable businesses in Downtown Eastvale.

Moreover, Hoffman Strategy Group did a comparative economic analysis of the future Downtown Eastvale to Downtown Claremont, CA, and Downtown Temecula, CA. An element of this analysis focused on the supportable amount of retail, restaurants, and other commercial activity linked to foot traffic volumes generated from core civic uses like city hall, the library, public spaces, etc. in these two mature markets and the quantification of that activity in dollars spent by consumers in downtown businesses and reported business sales.

A development strategy was prepared from the market analysis over the period of July - September 2021. The New Home Company team used this information in their negotiations with the City of Eastvale’s city council and staff on the acreage allocation for Downtown Eastvale. The outcome as codified by the May 11, 2022, city council action on a 5-0 vote: development of a Downtown village core for Eastvale spanning 52 acres and featuring 595,000 SF of commercial space, 660 apartments, a civic center with a city hall, police station, and library, and surrounded by 87 acres for 2,500 single-family homes and townhomes. The 2,500 homes will generate 1,200 students in the Corona-Norco Unified School District. It has been reported that Eastvale has about $100 million to pay for the civic center, grading could begin in fall 2022, and construction could start in 2023.

A.J., Matt, and Peter: Thank you for the opportunity to work on this amazing project with your team.

HSG Services

Hoffman Strategy Group’s principals have over 85 years of collective experience in conducting market and financial feasibility analysis, and economic impact analysis on all types of residential, retail, and commercial real estate projects. We work in markets small-to-large across the U.S. Combining expertise and knowledge from analytics to master planning, development strategy, and execution of that strategy means that we work across multi-disciplinary teams from the C-suite to the project management team in on-site construction trailers.

 If you are interested to find out how we can help make your vision become a reality, send an email to Jerry Hoffman, Dan Sheridan, or Jeff Green. We look forward to talking about your real estate development project and finding ways to bring your vision to life.