Real Estate News

Real Deals: Park West rethinks shopping center experience for digital age

To stroll along The District, the latest section to open in the Park West Village retail center, is to get a feel for how much the suburban mall experience has evolved in recent years.

A new 118-unit apartment community, District Lofts, sits above about 40,000 square feet of new retail space that will be dedicated to fashion retailers and local gift stores.

With its diverse mix of national, regional and local tenants, Park West these days offers something for even the most discerning mall patron.

“This is unique,” says Rich Roy, director of leasing for Casto, the Columbus, Ohio-based developer behind the project. “You typically don’t see this out in the suburbs.”

That is quickly changing. Fundamental shifts in the way people shop are upending the traditional playbook for retail centers, forcing them to offer customers an experience they can’t get elsewhere.

“A lot of it is about the experience and the entertainment aspect of shopping,” said David Connor, a senior vice president in Raleigh with commercial real estate firm Lincoln Harris. “Retailers are competing with Web-based retailing right now, and the mall business in particular has been hit hard because department stores have been hit hard by that.”

Since its first anchor store, Target, opened in October 2011, Park West has added more than 75 retailers and restaurants.

Few developments in the Triangle better exemplify the past and future of malls than Cary Towne Center and Park West.

While Cary Towne Center, an aging indoor mall that opened in 1979, is reeling from the loss of two of its anchor stores – Macy’s and Sears – Park West has become a destination for new retailing concepts looking to enter the Triangle market.

Since its first anchor store, Target, opened in October 2011, Park West has added more than 75 retailers and restaurants – an average of one to two openings a month. At least 10 of those stores were the first location to open either in the Triangle or the state.

Park West is also benefiting from the struggles of others. Three fashion retailers who had been at Cary Towne Center – Ann Taylor Loft, Soma and Chico’s – have moved or are in the process of moving to Park West.

Today, Park West’s roughly 600,000 square feet of retail space is 98 percent leased, not including the 40,000 square feet that just opened. Once it’s fully developed, the project will contain 550 apartments and 750,000 million square feet.

Park West’s current momentum is all the more impressive considering how long it took to get the project started.

Food is huge

Casto bought the land for Park West Village in 2006 and started developing the site in 2007, just before the economy descended into a deep recession. Tenants and lenders retreated from the project, and at one point Park West was best known for a giant mound of dirt that some called Mount Morrisville.

“We were patient,” Roy said of the delays. “We knew we had a good piece of real estate.”

98%Percentage of Park West Village’s 600,000 square feet of retail space that is leased

150,000 Number of homes within a 5-mile radius of Park West Village

Although Park West would never be confused with a project like North Hills in Raleigh, it too is essentially an infill site.

The 100-acre site was once home to the Andrx Pharmaceutical plant, and with the rapid growth in western Wake County, the center now has about 150,000 homes within a 5 mile radius.

“We didn’t have to wait for the rooftops,” notes Roy. “The demographics are very good.”

The demographics have only gotten better in recent years, thanks in part to the explosion in jobs in the Weston Parkway area of Cary, where MetLife recently built a new campus that employs more than 1,000 people.

“That whole Weston Parkway corridor has really helped Park West,” Roy said.

So has the mix of tenants, particularly the range of restaurants now open in the center. In the past, many retailers were hesitant to locate near restaurants in shopping centers for fear they would occupy all the nearby parking. No longer.

At Park West Village, dining options such as The Full Moon Oyster Bar, Blaze Pizza, BlackFinn Ameripub and Rise Biscuits and Donuts help draw in customers, who in turn spend money at other shops.

“We’ll get some national (retailers) that say, ‘Tell me who your restaurants are and where are they, what are their volumes,’ because they want to see what traffic is coming into the shopping center,” Roy said. “There’s a spillover effect.”

Roy describes Park West Village as a cross between Crossroads Plaza in Cary and North Hills in Raleigh, with big-box retailers sprinkled among pedestrian-friendly areas that feature dining and entertainment options.

Natural evolution

As for Cary Towne Center, its future remains uncertain.

Last week, Wegmans Food Markets, the highly regarded grocery chain, announced that it is looking to open its first store in North Carolina in a new development being planned just north of the mall.

Although some may view the new project as the latest threat to the mall’s survival, it could also turn out to be an enormous opportunity.

Connor, of Lincoln Harris, notes that part of Cary Towne Center’s struggles have resulted from the center of western Wake County shifting west because of growth patterns over the past few decades. That shift has benefited retail centers such as Park West Village, Waverly Place in Cary and Beaver Creek Commons in Apex.

A Wegmans-anchored retail center could be the catalyst to redevelop the entire area around Cary Towne Center, including the mall itself.

As Kane Realty has shown with North Hills, which was once a struggling indoor mall, there can be second acts for retail centers.

“You have 40-year-old buildings that have outlived their useful life,” Connor said. “I think really what you’re seeing with Cary Towne Center is kind of the natural evolution that happens with lots of real estate.”

David Bracken: 919-829-4548, @brackendavid