Capital is a lifeblood of the real estate industry, but the decisions on where and how it’s allocated are driven by people and personalities. Who are they? What motivates them? What can we learn from their experiences?
The following is an excerpt from Nancy Lashine’s interview with EDENS’ CEO Jodie W. McLean for Park Madison Partners’ “Real Estate Capital” podcast.
Tune in here for the complete interview.
Nancy Lashine (NL):
As you see the growth in the Northwest in the COVID era, or a market like Denver in the COVID era, and you decide you want to be in those markets, do you have to develop a center today or can you generally acquire something and re-tenant it in a way that it becomes an EDENS quality place?
Jodie McLean (JWM):
Generally, we are acquiring and then doing a redevelopment. And that varies by what it looks like for us. Size matters because we really believe that what distinguishes our places is trips and dwell time. And so much trip and dwell time now is driven by common area space that is different than how it’s been in the past. 42% of shoppers want to see open spaces with lawns or greens in their centers. And this is an emotional feeling.
And there’s enough intellect, the data now to know customers have indicated willingness to pay something 8% to 12% more for goods and services at places with open green spaces. And why is that? I don’t think anybody’s connecting like, “Oh, I think I’ll go to this Publix that happens to have a park in a shopping center versus that one.” It’s more of an emotional connection of what happens during, it might’ve been a completely different trip.
You might’ve been there and you spent time in the green with a friend. You met somebody, you ate lunch out there, your kids are playing out in the park. But it’s an emotional connection. And once those emotional connections are made, the repeat trips are amazing. And what we watch are trips and dwell time because for every 1% of additional time people spend at our places, we get about 1.3% of additional wallet share.
Not just parallel paths of strangers or people of diverse backgrounds, but how can we cause intersections of these consequential strangers? Because that's also where a lot of emotional connections are made.
NL:
Right, right. So how do you think about heterogeneous … You talk a lot about community. And I am an urban person, you grew up in Chicago, I grew up in New York City, and I think about going anyplace in New York City, it’s really heterogeneous. It’s just everybody’s there. The suburbs tend to be much more homogeneous. So, when you pick a location and you think about creating these places, how do you think about community and the ability to bring different people together?
JWM:
We think about that a lot. We think about what inclusive prosperity looks like, and inclusive prosperity looks different in different places. But I can tell you without question, our most successful places, if you want to measure them ultimately by sales volume, so you can start wherever you want in getting there, that means you have great trips and dwell time, are those in which there are multi-generational. So more so than any other determining factor are those where multi-generations feel comfortable spending their time.
If we can think, and we think about every one of our centers has very different demographic dynamics. And when we think about that, we think about places where people, we have a saying here, consequential strangers. How can we cause intersections, not just parallel paths of strangers or people of diverse backgrounds, but how can we cause intersections of these consequential strangers? Because that’s also where a lot of emotional connections are made.
People very much, if you give them the reasons to interact with people who are diverse and different, really like because they receive content for their lives. So that’s what they talk about. They don’t talk about, “Oh, I was in Publix and I got my favorite peanut butter jar.” That’s not what they talk about. They’re like, “Oh, I was down the street at Publix, and you know what? I met this guy who’s an artist and he’s doing blah, blah, blah, blah, blah.” And they’re sharing these stories of the people they met. And the next time they need to run out someplace, they’re coming back to our centers because of these emotional connections.
So how do people make that? Maybe they make it in the aisles of the grocery store, but maybe it’s public art. Maybe it is what we call jewelry. We put a lot of jewelry, benches, chairs, seating areas out in our common areas, and we make them pleasant. We encourage people to sit. And next thing they know, they’re sitting next to a stranger and they’re having a conversation.
We give people empowerment throughout all of our places to talk to strangers. We were all raised, “Don’t talk to strangers.” But it’s those intersections and those connections that wind up being much more powerful in loyalty back to our places. So ultimately, we’re measuring everything in trips and dwell time, and that then rolls up to our retailer sales. But we also have an index.
Conversation