Power center (retail) explained

A power center or big-box center (known in Canadian and Commonwealth English as power centre or big-box centre) is a shopping center with typically 250000square feet600000square feet of gross leasable area[1] that usually contains three or more big box anchor tenants and various smaller retailers,[2] where the anchors occupy 75–90% of the total area.[3] [4]

Origins and history

280 Metro Center in Colma, California is credited as the world's first power center.[5] [6] [7] [8] In 1986, local real estate developer Merritt Sher opened 280 Metro Center next to Interstate 280 as an open-air strip shopping center dominated by big-box stores and category killers.[9] As originally constructed, 280 Metro Center featured 363000square feet of gross leasable area on a 33-acre (13.3 ha) lot,[10] which was home to seven anchor tenants, 27 smaller shops, and a six-screen movie theater. The original seven anchors were Federated Electronics, The Home Depot, Herman's Sporting Goods, Marshalls, Nordstrom Rack, Pier 1, and The Wherehouse.

In news coverage at the time, the phrase "power center" was treated as yet another example of the 1980s fad of forming buzzwords based on the word "power", along with power suits, power ties, and power walking. It is not clear who coined the phrase, but Sher's real estate development company, Terranomics, was happy to take credit for the concept by trademarking the phrase "originator of the power center".

280 Metro Center was a revolutionary development at a time when retail shopping in North America was dominated by enclosed shopping malls.[11] Dissatisfied with long hikes through shopping malls to visit relatively small boutique tenants, American shoppers flocked to power centers where they could conveniently park directly in front of big-box stores.[12] Power centers usually have a parking area next to the entrance of each anchor and a high parking ratio, as high as six spaces per 1000square feet of gross leasable area.[13] Thanks to such generous and convenient parking, the average visit length as of 1993 for a typical power center visitor was only 45 minutes, compared to three hours in a regional mall and four hours in a super-regional mall.[14] Because their gigantic anchor tenants are each destinations in their own right, power center developers claim that 85 percent of their shoppers buy something on each visit, as opposed to 50 percent of mall shoppers.[15] Power center developers usually recruit national chain stores as anchors, and in turn, the steady flow of customers and revenue resulting from consumer familiarity with such brand names helps such developers secure financing.

American consumers also found much lower prices at the stores in power centers, due to their relatively simple design, low overhead, and cheap rent.[16] As of June 1995, a typical shopping mall tenant had to pay average monthly rent of $18 to $24 per square foot for their own space. Because it is far more difficult to build, decorate, maintain, and secure a multilevel shopping mall with skylights, lengthy interior corridors, and attached parking garages, mall tenants also had to pay an additional $8 to $12 in monthly common-area fees for each square foot of rented space. The comparable average monthly numbers per square foot for a typical power center tenant in the same timeframe were only $10 to $18 in rent and $3 in common-area fees, since a power center is merely a group of single-level warehouse-like structures gathered around a common open-air parking lot. Power centers have much lower costs than traditional enclosed regional malls for maintenance, heating, ventilation, and air conditioning (HVAC), electricity, and security for common areas.

These dual attractions of convenience and affordability drew American consumers by the millions to power centers during the 1990s. Shoppers from 51% of American households visited a power center in 1994, and for those households, the average number of power center visits that year was 19.5. By 1998, there were 313 power centers in the United States with a combined gross leasable area of 266000000square feet. Together they accounted for over 5% of national shopping center sales. The highest numbers of power centers were in the states of California and Florida. By January 2017, there were 2,258 power centers in the United States with a combined gross leasable area of 990416000square feet, which was 13% of the combined gross leasable area of all shopping centers in the United States.

Canada

In Canada, South Edmonton Common in Edmonton is the largest power centre, and one of the largest open-air retail developments in North America. Spread over 320acres, South Edmonton Common has more than 2300000square feet of gross leasable area.[17]

Repurposing malls as power centers

In recent years, it has become common for older, traditional shopping malls to:

Main Street theme

Some new power center developments have attempted, as have lifestyle centers and regional outdoor malls (e.g. Otay Ranch Town Center, Atlantic Station), to recreate the atmosphere of an old-town Main Street. Stores line streets where cars may drive and where there is limited parking, with much more parking in lots or garages in the back. The "main street" particularly serves to house the smaller stores and chain stores once typically found in malls. An example is Woodbury Lakes in Woodbury, Minnesota—where, according to urbanist website streets.mn, the developers "dispensed with the integrated anchors and instead plopped down 'Main Street' in the middle of what is otherwise a regional power center".[19]

Vertical power centers

Power centers are almost always in suburban areas, but occasionally redevelopment has brought them to densely populated urban areas. In environments where denser development is desirable, a power center may consist of multiple floors, with one or more big-box anchors on each floor, and floors of parking, all "stacked" vertically. Examples of such centers include:

European terminology

See main article: Retail park. In Europe, any shopping center with mostly what are called "retail warehouse units" (U.K.) or "big box stores" or "superstores" (U.S.), 5000sqm or larger, is a retail park, according to the leading real estate company Cushman & Wakefield.[21] [22] According to a 2003 UK book on retail property locations, the United Kingdom did not have any power centers, but "the nearest British equivalent to the power centre is the large retail park."[23]

According to ICSC, what in Europe is classified as a "retail park" would, in the U.S., be classified thus:

See also

References

  1. Web site: U.S. Shopping-Center Classification and Characteristics . International Council of Shopping Centers . January 2017. 2020-05-16.
  2. News: Garbarine . Rachelle . The New Goal at Retail Power Centers: Eye Appeal; Bowing to demands by towns to give more attention to design . The New York Times . August 15, 1999 . RE9 . live . https://web.archive.org/web/20170912054131/http://www.nytimes.com/1999/08/15/realestate/in-the-region-new-jersey-the-new-goal-at-retail-power-centers-eye-appeal.html . 2017-09-12 .
  3. News: Bennett. Jane. July 4, 2003. Gate plans retail. Jacksonville Business Journal. live. https://web.archive.org/web/20081118124838/http://www.bizjournals.com/jacksonville/stories/2003/07/07/story1.html. 2008-11-18.
  4. Web site: 2018. Commercial Real Estate Glossary. live. https://web.archive.org/web/20181030075122/http://www.rltinc.net/Commercial-Real-Estate-Resources/Glossary.html. 2018-10-30. R.L. Travers & Associates. Springfield, Virginia.
  5. News: Totty . Michael . 'Power' Centers Lure Shoppers by Mixing Elements From Big Malls and Small Plazas . The Wall Street Journal . Dow Jones & Company . December 27, 1988 . 1. Available through ProQuest Central.
  6. Book: O'Mara . W. Paul . Beyard . Michael D. . Casey . Dougal M. . Developing Power Centers . 1996 . Urban Land Institute . Washington, D.C. . 9780874207859 . 18 . 13 August 2022.
  7. Book: Laird . Gordon . The Price of a Bargain: The Quest for Cheap and the Death of Globalization . 2009 . McClelland & Stewart . Toronto . 9781551993287 . 68 . 28 October 2019.
  8. Book: Pacione . Michael . Urban Geography: A Global Perspective . 2009 . Routledge . Milton Park . 9780415462013 . 249 . 3rd . 28 October 2019.
  9. News: Smith . Chris . Merritt Sher, Healdsburg hotel developer, dies at 78 . 28 October 2019 . Santa Rosa Press-Democrat . 13 March 2018.
  10. Felgner . Brent H. . Power Centers Pack Punch In Mature Market . Marketing News . December 5, 1988 . 22 . 25 . 1, 10, 11. Available via ProQuest ABI/INFORM Collection.
  11. Book: Laird . Gordon . The Price of a Bargain: The Quest for Cheap and the Death of Globalization . 2009 . McClelland & Stewart . Toronto . 9781551993287 . 69 . 28 October 2019.
  12. News: Neuborne . Ellen . Power centers muscle in: Stores siphon shoppers from regional malls . USA Today . June 13, 1995 . 1B. Available via ProQuest.
  13. Book: Kyle . Robert C. . Baird . Floyd M. . Spodek . Marie S. . Property Management . 2000 . Dearborn Real Estate Education . Chicago . 9780793131174 . 354 . 6th . 6 October 2021.
  14. Rybczynski . Witold . Witold Rybczynski . The New Downtowns . The Atlantic Monthly . 271 . 5 . 98–106 . May 1993 . Available via ProQuest.
  15. Book: Donnellan . John . Merchandise Buying and Management . 2014 . Fairchild Books . New York . 9781609014902 . 63 . 4th . February 27, 2023.
  16. Book: Hartshorn . Truman Asa . Interpreting the City: An Urban Geography . 1992 . John Wiley & Sons . New York . 978-0-471-88750-8 . 387 . 2nd . 25 July 2023.
  17. Web site: About Us . South Edmonton Common . July 6, 2017 .
  18. Web site: Seven Corners Business Area . Fairfax County Economic Development Authority . dead . https://web.archive.org/web/20150924194852/http://www.fairfaxcountyeda.org/seven-corners-business-area . 2015-09-24 .
  19. News: Castleman . Monty . From shopping malls to lifestyle centers . June 27, 2020 . streets.mn . May 11, 2020.
  20. Web site: Gran Patio Santa Fe. www.stantec.com.
  21. European Retail Parks: What's Next . Summer 2019 . Cusman & Wakefield.
  22. https://www.across-magazine.com/development-retail-parks-accelerates-throughout-europe/ "DEVELOPMENT OF RETAIL PARKS ACCELERATES THROUGHOUT EUROPE", Across: the European Placemaking Magazine, August 23, 2016
  23. Book: Schiller . Russell . The Dynamics of Property Location: Value and the Factors which Drive the Location of Shops, Offices and Other Land Uses . 2001 . Spon Press . London and New York . 0-415-24645-8 . 77 . 14 November 2022.

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