Retail development is big business in Atlanta, with new towers, mixed-use projects, and even standalone commercial centers featuring new storefronts.
But this onslaught of development activity sometimes gives the impression there’s a lot more available retail than the city’s growth can sustain.
Enter Stephanie Cegielski, vice president of public relations at International Council of Shopping Centers (ICSC). Educated as a lawyer, Cegielski has spent the past year representing the organization, which itself represents tens of thousands of retail developers, including many in Atlanta.
Coincidentally, before her role with ICSC, she served as the communications director for a super PAC gunning for the election of a certain controversial real estate mogul, before a high-profile parting of ways.
For this installment of Field Note Fridays, we caught up with Cegielski to scratch the surface on what’s driving retail development in booming Atlanta.
Curbed Atlanta: What’s the role of the International Council of Shopping Centers?
Stephanie Cegielski: ICSC serves the global retail real estate industry. We provide our 70,000-plus member network in over 100 countries with invaluable resources, connections, and industry insights, and actively work together to shape public policy.
CA: The idea of the shopping center seems antiquated, as it evokes images of suburban sprawl. As Atlanta rapidly urbanizes, and mixed-use developments become de rigueur, are shopping centers and retail changing?
SC: Shopping centers are evolving to meet changing consumer needs; we see more mixed-use properties where nontraditional retail, such as an urgent care center, is next to a grocery store and a nail salon.
Atlanta is an example of the growth for retail real estate—as the city continues to grow, so too will the centers and tenants of the city and surrounding neighborhoods.
CA: And how is your organization keeping up with those changes?
SC: We work closely with our membership and industry leaders to understand the changes so we can help communicate and educate on the direction that retail and retail real estate are headed. The current shift in demographics and technology are leading factors in the changes taking place, so we try to understand the demands of the markets so we can support our members.
CA: The changes that are happening in Atlanta are clearly not isolated. Are other cities seeing the same growth trends, or is there anything unique about Atlanta?
SC: We are seeing growth in cities across the country. As demographics shift, so do consumer needs and desires, which leads to change and growth.
Millennials are helping to lead this growth, as they are now entering their prime consumption years and are looking to new experiences and brands to spend on. They are also a very entrepreneurial demographic, which means that many are starting their own brands, which is also helping to drive growth.
CA: What are some of the impacts we’re seeing in standalone retail with the rise of e-business?
SC: E-commerce is an opportunity for brands to better engage customers and to grow their business. Offering multiple channels for consumers to shop results in more sales.
Currently, less than 10 percent of all retail sales take place online. Consumers are still shopping at brick-and-mortar and online-only retailers are noticing. Companies like Warby Parker, Bonobos, and even Amazon are opening physical locations to help build brand awareness and increase their customer base.
CA: Often in urban developments, retail is being used around the base of towers to add vibrancy to the street, but often the spaces go underutilized for long periods of time. Is there a magic ratio for how much space should be devoted to retail?
SC: As with any development, it depends on what the community or consumer base wants and is willing to support. The demographics and desires vary from one location to another, so it’s important to focus on each development individually.
CA: Are some retail spaces in the city overvalued? Or what are the empty storefronts a symptom of?
SC: Retail spaces in urban environments certainly have their value as they’re highly visible among the workforce. Empty storefronts exist for a variety of reasons. They could be vacant due to rent, due to continued development in the surrounding area, and even due to businesses assessing whether or not they are the right fit for a particular market.
There will always be some level of vacancy due to the nature of businesses moving in and out as well as shifting demographics and leasing cycles.
CA: As things continue to change rapidly with regard to walkability and technology, what do you see retail doing in the future?
SC: I am bullish on the longterm health of retail. It is continuing to adapt and create an omnichannel experience that provides the best possible shopping offerings for consumers. Consumers still crave the experiences to go explore, shop, eat, or see a movie. The shopping center is really the community gathering place.
- Field Note Fridays archive [Curbed Atlanta]