Reimagining Retail
A quick glance reveals that the world of retail has undergone a transformation–from purely transactional spaces to environments that enthrall and engage. In 2023, experiential retail reemerged with a twist.
“I love the recent wave of innovators rethinking traditionally mundane experiences and making them enjoyable. It’s about transforming the everyday into something more compelling.”
Vanessa Mendoza, Senior Director of Leasing
We’ve seen practical uses like medspas and pet care centers reimagine their offerings. Clinics such as Bond Vet are now designed to provide a stress-free environment for both pets and owners, far beyond basic veterinary care. Similarly, beauty and wellness spots are blending their services with educational experiences, offering customers a holistic approach to self-care.
For landlords, the challenge of crafting such experiences through tenant mixes is considerable, yet when done well, the results often validate the effort.
Vanessa Mendoza, Senior Director of Leasing, remarks, “I love the recent wave of innovators rethinking traditionally mundane experiences and making them enjoyable. It’s about transforming the everyday into something more compelling.” She adds, “From a leasing standpoint, there is value in the fresh, exciting energy these brands bring to our centers. However, it does mean extensive research into new specialty categories. For instance, if we’re considering a medspa concept, we need to understand the nuances of that particular business model and how it plays in our market and with our existing mix of tenants. It’s a complex process, but when you get it right, you create neighborhoods and places that feel special; the results speak for themselves.”
From Short-Term Spots to Long-Term Goals
Specialty leasing is drawing attention for its renewed approach to space utilization. This trend is linked to the rise of pop-up retail which has transitioned from a novel concept to a cornerstone of the sector. According to Senior Vice President of Specialty Revenue, Mike Kelleher, there are two significant trends that have fueled the endurance of this movement in 2023: event-based leasing and short-term agreements.
He notes, “Through event-based leasing, we’re partnering with entertainment companies to create ticketed experiences.” These experiences are making the most of transitional spaces, transforming them into hubs of activity. Santa Monica’s BTS Experience and the sportive events at Assembly Row showcasing the potential of interactive and dynamic retail environments.
Moreover, Kelleher emphasizes the inherent strength of big brands utilizing short-term leasing. National tenants are seizing on opportunities to sign brief tenures in prime locations, viewing this as a fool-proof steppingstone toward making a long-term commitment. “These stores are fully branded and built out with an eye towards entering a new market and converting to a permanent store. Previously, national tenants rarely tested their concepts this way,” Kelleher explains. He predicts an uptick in this strategy, stating, “Based on the current environment, I expect this trend to grow, with a forecast of 2 or 3 more conversions in 2024 as we continue to work closely with our national leasing team.”
“Based on the current environment, I expect this trend to grow with another 2 or 3 to convert in 2024 as we continue [working with] our national leasing team.”
Mike Kelleher, Senior Vice President of Specialty Revenue
Intelligent Design Meets Effortless Convenience
Incorporating good design to attract customers and employees back into physical spaces has been another significant trend that resonated in 2023. Federal’s Vice President of Creative Planning and Development, Geoff Sharpe, believes in the power of design to connect and transform spaces, taking cues from the hospitality world to enhance both retail and mixed-use environments.
“Good design has become the language through which we communicate the value of a space. It’s not just form or function, but the story it tells and the community it builds,” Geoff shares. He further explains, “People today expect so much more; they want to choose their surroundings, not just occupy them. Take the café at Bloomies, for example, with that simple change they’ve introduced the comforts of home into a shopping experience.”
“Good design has become the language through which we communicate the value of a space.”
Geoff Sharpe, Vice President of Creative Planning and Development
Marketing to the Self-Aware Consumer
In San Jose, where the pulse of wellness culture beats as strongly as that of Silicon Valley’s innovation, Collette Navarrette, Federal’s Senior Director of West Coast Marketing, champions the importance of staying nimble in the face of rapidly emerging ideas. Here, the concept of the “quantifiable self” is not only a trend, but a lifestyle that informs our marketing strategies.
“Staying ahead of the curve is always crucial, and 2023 was a standout year for marketing to leverage groundbreaking trends. Our customers embrace the ‘quantifiable self’ movement, prioritizing wellness and actively tracking their lifestyles.” Collette says, “We echo this commitment by promoting wellness within our community. Through events and services, we cater to and celebrate this health-conscious mindset. This awareness sharpens our competitive edge and, in our industry, that’s vital.”
“Staying ahead of the curve is always crucial, and 2023 was a standout year for marketing to leverage groundbreaking trends.”
Collette Navarrette, Senior Director of West Coast Marketing
Wellness and healthy living concepts have been key influencers since 2023, reflecting the local community’s growing desire to measure and enhance every aspect of their lives. It’s this integration of personal betterment that continues to guide our forward-thinking decisions.
Forward Together
It’s clear that our journey into 2024 will be guided by innovation, community focus, and a commitment to stay ahead in the CRE industry. Stay tuned for more as we continue to shape the future of real estate.
