Alternative anchors, who are they and where can you find them?

With vacancies rising and dark space becoming harder to fill, a concept that many may not be familiar with is beginning to come to the forefront. That is of using restaurants to replace anchors and draw traffic.

I first was introduced to this concept in 2005 during my time with Casto Lifestyle Properties in Florida. I had the privilege of working with/for Mr. Brett Hutchens (President) who was one of the pioneers of this concept.

Brett brought the concept into existence during a total makeover of the old Winter Park Mall, in Winter Park, FL. For those unfamiliar with the mall, this is one of the first malls in which the term "Lifestyle Center" was borne from. The old enclosed mall became what is now Winter Park Village, a collection of office, retail and residential components. Winter Park Village hosts a complimentary mix of entertainment, shopping, dining, living and grocery anchors which were way ahead of their time.

The tenant mix includes Regal Cinema's, Cheesecake Factory, Albertson's (Now Publix), The Loft's at Winter Park Village (53 loft style apartments), Brio Italian Restaurant, P.F.Chang's, Border's books, Ruth's Chris Steakhouse and other national and local retailers.

Mr. Hutchens outside the box thinking and ability to exploit opportunity where few could imagine allow this center to continue to thrive even in this economic climate.

Hutchens ability to view high end, sit down restaurants as drawing cards made people stand up and take notice. He realized then that people would pay for an "experience". A place to see and be seen in their local community.

In my view, what Hutchens did was play to certain truths based in economic reality. Regardless of economic times, people will go out to eat and they want to be entertained. He put the restaurants in position to be the anchors then in-filled around them.

While the restaurants alone may have been enough to insure survival, the addition of several other key components cannot be overlooked.

First are the office tenants. Those tenants allowed the restaurants and small shops to maintain balance. Having a captive audience in close proximity during lunch hour five days a week (and even dinner) boosted foot traffic throughout the week which in turn drove sales through slow periods. Second, the incorporation of a sub-market of residential units by converting the second floor of an old Dillard's store into Loft Apartments allowed not only traffic, but an ingenius use of former big box space.

While that would seem to be good enough for many, he went one step further and placed a 50,000 sf. grocery anchor within the center which further strengthened the center's ability to keep everything "in-house".

When you combine the above factors with an on-site cinema there is no real reason to "leave home".

Having experience in this concept it is my opinion that higher-end, sit down restaurants are a better option than using big box operators to fill space. Alternatively, using that same big box space to your advantage by creating something unique within the market offers incredible opportunity as well.

I think Hutchens only real risk on the project was that of Regal Cinema's. As some of you may recall, there was a time pre-2005 that movie houses were limping along and many had shut their doors. I think in this case he had hedged his bets by again using the restaurants to fuel the theater, where the two actually compliment each other. The overall "lifestyle" concept was certainly worth the risk.

My main concern with big box retail or cinema's has always been what is your alternative strategy should they fail?

Fortunately, I think Hutchens may have already given us the answer.

I'm fortunate to have learned from some of the best and brightest entrepreneurs in the real estate business. I place Brett Hutchens at the top of that list not just for his entrepreneurial ability, but he was always honest and genuine in all of his dealings as well as with me on a personal level.

So, if you are looking for viable alternatives to fill big box space or add life to your center, food and entertainment are clearly the choice to weather this economic storm.