Experience Matters: Drawing Diverse Crowds To CRE Projects
Whether going to work, hanging out in their apartments or shopping and dining, people are seeking experiences, and commercial real estate developers are trying to figure out ways to create places that appeal to them.
That was the consensus among panelists at Bisnow’s State of the Market event Wednesday at the Four Seasons Hotel Denver.
“The way we live, the way we work and the way we shop is all changing, and we need to move along with it,” Continuum Partners Chief Investment Officer Jenny Robinson said. “You have to have some sort of a draw that brings them there. You have to have an experience.”
Robinson pointed to Tavernetta, the upscale Italian eatery near Denver Union Station, as an example of a dining experience that keeps its customers coming back.
“The service sets the bar,” Robinson said. “It’s that experience that needs to parlay into every aspect of real estate — multifamily, retail and office — and coworking is showing up in apartments now.”
Though he was not involved in the project, Stantec principal Larry Weeks held Dairy Block up as a prime example of how to draw people into a property. The project, developed by McWhinney and Sage Hospitality, includes office space, the Maven Hotel, Frank Bonanno’s Milk Market food hall and an alleyway that is filled with local retailers.
“I love the way that the Maven blurs the boundaries between what’s public and what’s private,” Weeks said. “It’s an offering to the city. It’s a public place. The office lobby blends with the food hall and the food hall blends with the hotel lobby.”
Stantec is part of the team that is developing McGregor Square, a mixed-use project on what was a parking lot west of Coors Field. The 655K SF project includes a hotel, restaurants, residences, retail offices, entertainment spaces and open spaces. Rather than building property line to property line, the development will have what Weeks referred to as “street rooms” — interesting spaces that allow people to congregate outside. Stantec’s goal is to build a project that will draw a diverse crowd.
“Quality places are places that engage every walk of life,” he said. “Those are the places that last. Inclusivity is fundamental.”
Sage Hospitality co-founder, President and CEO Walter Isenberg said when the Union Station project started, the first and most critical component was finding the right mix of tenants and retailers and then focusing on the economics. With that in mind, the team approached Tattered Cover owner Joyce Meskis about opening shop in the transit hub.
“She said, ‘Are you paying attention? Bookstores are closing, not opening,’” Isenberg said. “But we wanted Tattered Cover. There’s no fixed rent, just straight percentage rent, and it’s doing extremely well five years later. We were focused more on this idea of getting a mix of tenants that would bring people and the economics would follow.”
McWhinney co-founder and CEO Chad McWhinney said looking at a project in its entirety rather than worrying about whether a tenant has the right credit is more likely to lead to a successful development. He recalled comments from billionaire businessman Phil Anschutz who said the challenge with the real estate industry today is it has become very institutionalized. Great places are created by families and individuals who have a passion for their communities — not Wall Street.
“If you have someone sitting in New York looking at a spreadsheet, you will get a very different project,” McWhinney said.
Zeppelin Development President Mickey Zeppelin, a Colorado native, said Denver has spent its time and effort on building a great economy but has largely forgotten how to serve the people who live here.
“If you look at the things that are missing, they’re the needs of the people — the parks, connecting transportation and urban design,” he said.