Last month I said that the logical progression for retail developers was to strive to keep guests on the premises not just for a few hours, but for or a few days. How do you make places so indispensable that patrons want to live there? 

To start, we don’t believe that landlords can depend on tenants to attract guests anymore. We don’t believe that you can just maintain the roof and collect rent checks.  We believe that real estate success requires constant effort and attention: create a brand and spend money to acquire and keep customers.  Organize events, tell a story, be hospitable, create human interaction, serve drinks, host gatherings, have sleepovers, give patrons multiple reasons and places to visit and linger. Amid the current retail chaos, you have to run it like a hotel (at least, the way they ran them 150 years ago):

“[In the late 1800s] American hotelkeepers made ends meet by leasing floor space for newsstands, barbershops, ticket offices, cigar stands, banks, telegraph offices, retail stores and other concerns in addition to their offerings of ballrooms, assembly halls, private meetings chambers, commercial display rooms and lounges. All these facilities were patronized as much by the local community as by travelers, and as a result, hotels constantly played host to a bustling and often free-spending public whose patronage was essential to keeping their hotel lobbies, barrooms and restaurants full.” Hotel: An American History. Sandoval-Strausz

How does this apply to retail today? Food halls are a good starting point (I promise I’ll write more about those in another note). A Krog-style food hall is really a giant business run by the building owner. It has employees with benefits and supplies and hours of operation and profit-sharing and P&Ls. It’s a business. 

We didn’t put power outlets at Krog because we didn’t want it to become co-working. But if you have the space we think that you really do want your common spaces to be free co-working. We think you also need for-profit co-working.  You want guests to linger, like those old hotel lobbies. That was the thought at Atlanta Dairies: an all-day place for people to congregate without shopping as the central idea. If you can get someone to spend a day at your property, I guarantee you they’ll spend a dollar on something (wasn’t that the whole idea behind the mall in the first place??)

As more and more uses get crammed into less and less space, someone has to be in charge. Someone has to host and guide and direct guests. So to answer the question, old hotels are a good starting point for new retail because we think that one answer to the evolution of retail is hospitality. Specifically, social clubs, both private and public. Not necessarily as a replacement for shopping centers, but as a critical component. Clubs are nothing new nor are we the first to talk about their reinvention. Modern iterations — The Jane Club, Oxford Exchange, Mortimer House—come in all shapes and sizes but share more than one of the following critical components under one roof:

Places to conduct business

Places to shop

Places for events (weddings, conferences, pop-up retail, classes).

Places to live, especially for only a few nights

Places to eat (and drink)

Places to entertain others and to be entertained

Places to congregate informally and without time constraints, in large and small numbers
 

In this, retail plays a significant part. Maketto in D.C is a wonderful example. In the front it is a streetwear store. Behind that a coffee shop and bar. Behind that is an outdoor event space, and behind that is the kitchen and additional restaurant tables. Add some hotel rooms a la Longman & Eagle and you’re cooking.

The future of retail is not simply in owning real estate. The future of retail is owning the real estate and running the business. Be the host. Be hospitable.

What we’re working on: Go figure: social clubs, among other things. In Charlotte and Atlanta we are in pre-development of club spaces that will combine offices, event spaces, F+B, furnished apartments, permanent and rotating retail, all largely open to the public but with perks and special access for paying members. 

We always want to try new spots if you have any recommendations. On our list:

Call Your Mother. Wood-fired bagels in Park View

Sospreso. All-day cafe on H Street

Thip Khao: Laotian street food in Columbia Heights

Brothers and Sisters: Erik Bruner-Yang’s Asian-American restaurant at The Line Hotel 

Maydan: North African/Middle Eastern near U Street

Red Hen: Italian-American in Bloomingdale

Let us know if you’ll be in D.C. next month and want to connect. We’ve got a couple of open seats left at a few late-night dinner reservations: come join!

 Cheers,

 G