From axe throwing and bowling to gaming lounges and escape rooms, entertainment users that feature competitive activities are rapidly expanding into traditional retail centers. A recent study by JLL coined the term “competitive socializing” to describe this class of new leisure tenants and how they are driving foot traffic to suburban shopping centers and poised for stronger growth. Eatertainment concepts, another term used to describe these concepts which blend an arcade experience with food and beverage offerings, comprise 22.6 percent of the competitive socializing market share and have proven to be a successful addition to our properties as we execute our redevelopment strategy.
At CBL Properties, we are transforming traditional, enclosed malls into suburban town centers that have more streamlined retail footprints and a diversity of uses that add energy and value to the center. Customers want to do more than just shop at our properties, and competitive socializing tenants are helping us deliver the experiences that today’s consumers crave.
A recent spike in department store closures offered an opportunity to revisit our leasing strategy and add innovative uses that generate additional traffic for our existing retailers and new experiences for our shoppers. CBL Properties has backfilled or secured commitments for over half of its recent anchor store vacancies, with 24 vacancies filled or committed since January 2018. Many of our former department stores are being replaced with concepts that combine entertainment, food and beverage, as they require larger blocks of square footage, which anchor spaces can easily accommodate. We are adding national users such as Dave & Buster’s, Round1, Main Event and Tilt as well as strong regionals as part of most of our anchor redevelopment projects.
For example, at Hamilton Place in Chattanooga, Tennessee, construction on a former Sears location is currently underway with the addition of new-to-market Dave & Buster’s, and at Milwaukee’s Brookfield Square, WhirlyBall will open on the former Sears parcel in fall 2019. Last year, we opened Round1 at Jefferson Mall in Louisville, Kentucky, in the lower level of a former Macy’s. Meridian Mall near Lansing, Michigan, is set to welcome High Caliber Karting and Entertainment, an indoor go-kart track that will also offer arcade games, axe throwing, and a bar and bistro menu. This attraction will occupy approximately 80,000 square feet of a former Younkers building.
Competitive socializing concepts are also ushering in a new crop of consumers that linger longer and visit other retailers after the racing, axe-throwing and gaming ends. This domino effect has boosted overall property sales and has been instrumental in attracting other new concepts. For example, our redevelopment of a former Sears building at CoolSprings Galleria in Nashville, which included the addition of King’s Bowl & Entertainment, dining and other retail uses, benefitted the entire property, increasing small shop sales per square foot by 30 percent since 2013.
The influx of competitive socializing concepts has allowed our team to broadly diversify our tenant mix. In 2018, 67 percent of our new leasing activity was with non-apparel tenants, as we added uses that will contribute relevancy and vibrancy to our retail centers, and direct steadier traffic to retailers that are already onsite. This trend accelerated in the first quarter of 2019, with nearly 80 percent of new leases executed with non-apparel tenants.
Retail is going through its latest state of transition, and both winners and losers are emerging. By re-merchandising our properties with innovative concepts that are unique and offer entertaining experiences, our properties will strengthen their foothold as dominant town centers for the communities they serve. Competitive socializing concepts are just one way we are diversifying our offerings. As we continue to actively redevelop our centers, we look forward to creating environments that will thrive for many years to come.
— By Stephen Lebovitz, CEO of CBL Properties