Fresh concepts in the urban core

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JLL's Mark Newman

JLL’s Mark Newman

Last October when Gables Residential announced that its new development in Uptown would be anchored by a Whole Foods Market, it probably surprised and thrilled the 20-somethings living in the trendy neighborhood. But it doesn’t take long to figure out why the Austin-based grocer would move into our urban core, engage street level foot-traffic along McKinney Avenue and gain market share. This is a trend we’re seeing across brands in cities coast to coast. Even Detroit, which remains one of America’s hardest hit urban centers.

Empty nesters and millennials are returning to the urban core and paying premiums to be in the middle of everything. The area offers a vibrant mix of museums, restaurants, bars, walking/biking trails, urban green spaces – and all of that right outside their doorstep. But a basic need has always seemed to be missing. Where are the grocery stores? Organic or not, everyone has to eat.

The recent and on-going surge of population in the urban core has forced the supermarket industry to reevaluate how it can serve customers in an urban environment without the traditional surface parking options.

By 2040 nearly 10.5 million people will live in and around Dallas-Fort Worth, making our region the fastest growing U.S. metro in the country.

As mixed-use projects in neighborhood pockets proliferate, market share will be absorbed by grocers who are able to adapt to the urban style in creative ways while also improving their product offerings to meet the tastes and demands of the urban resident.

Safeway has proven experience with urban designs on the coasts and is poised to take advantage of that. Whole Foods and, surprisingly to some, Wal-Mart, have both shown a commitment to structured parking and the foot-traffic profile of urban retail. In most of our minds, when we talk about urban supermarkets we picture a smaller, specialty format. But, it’s the grocer who can provide the traditional supermarket experience in a dense neighborhood that will benefit the most.

We’ve already seen the success of several projects that have figured out the delicate balance between designer produce and demographics. Look at The Shops at Park Lane where structured parking has been embraced; or how Central Market at Preston and Royal scaled back its footprint to seamlessly slip into the Preston Hollow strip center; and the Trader Joe’s on Lower Greenville that has flourished in the counter-culture pedestrian-heavy streetscape.

As Dallas continues to boom and evolve into an increasingly dense urban environment, changes will have to happen. Grocers will need to figure out how to orient to the sidewalk rather than the parking lot. Consumers will increasingly embrace mass transit, leaving their SUVs at home in favor of ride on the trolley.

For more information, contact Senior Vice President Mark Newman.

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