A primer on retail types and urban centers

New Urban News Article, 9/1/2007

Developing and managing retail centers remains one of the most risky of all real estate categories. Retailers must respond to ever-changing consumer trends and demands, while constantly fending off new competition. As a result, the retail industry relies upon proven methods and techniques to minimize the risk and to earn a market rate of return on investment. This risk is more acute in mixed-use urban developments, where vacant store fronts or undesirable retailers can significantly disrupt the surrounding residential and office quality of life.

Most shopping centers fall into one of six primary proven types. Each type of center appeals to distinct market segments and has specific sizes, tenants, location criteria and site plan standards. Although there are always exceptions to these commercial center types, centers that deviate from these industry standards and sizes are often considered risky and difficult to finance or lease.

These primary shopping center types are: The corner store, convenience center, neighborhood center, community center, regional center, and the lifestyle (town) center. In addition, each of these center types can be “supersized” or increased by 30 to 50 percent.