2007-02-07, 09:47

A survey says lifestyle centers are not overbuilt

By: Jonathan Groner
REBusiness Online has just completed an unscientific online survey of its readers, asking the question: Is there a surplus of lifestyle centers?

Of the respondents, 53.6 percent said there is not a surplus and that the industry is not in danger of overbuilding this product type. Another 19.8 percent agreed that there is not a surplus but said overbuilding is quite possible. That's a total of about 74 percent who said there is no surplus. The remainder -- 26.6 percent of respondents -- said there is indeed a surplus.

Another survey question was: How should developers approach lifestyle development in the future? The online magazine received some interesting answers to that question. A few of them follow:

"Not all developments marketed as 'lifestyle centers' meet the definition for such centers. ULI developed a standard definition of such centers several years ago; only those centers that meet that definition — those including a mix of uses, retail, office and residential — should be called 'lifestyle centers.' Many 'lifestyle centers' are called that because the developer has included restaurants with retail and made the center open-air rather than enclosed or a strip center; those are not 'lifestyle centers' and should not be so labeled."

"I find parking to be my biggest concern, as the general layout of a lifestyle center does not allow for large parking fields near the tenant areas that require the greatest number of spaces."

"Not every new development needs to be 'lifestyle.' There are not that many tenants to fill all the expected development. There will be significant fallout in these centers due to tenant-oriented co-tenancy clauses that will begin to kick in as consumer demand and sales volumes retreat in the next few years, and if an expected turn in the real estate cycle comes to fruition. When these events occur, lifestyle centers will undergo some fundamental changes."

These are thoughtful comments.

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