As the costs of land, labor and construction rise, more developers are focusing on upgrades to existing properties than they are on seeking ground-up developments or value-added centers, executives said at a RECon panel discussion.
Conor Flynn and Laurie Mahowald at RECon
“It’s been hard to make deals economical if we can’t get the land for free,” said Conor Flynn, CEO of Kimco Realty Corp. “We haven’t been able to go out and find a site and make it work.”
So mixed-use has become a big push for the firm, Flynn said. “Our real estate is 80 percent parking lots and 20 percent single-story buildings,” he said, noting that Kimco has been busy doing entitlement work to find new ways to add density to existing properties. “We have 4,000 apartment units entitled so far.”
Kimco decides on a site-by-site basis, said Flynn, whether it is most profitable to sell those entitlement rights to a residential operator; to sell a ground-lease to a residential operator; or to form a joint venture with the operator.
Parking lots are ripe for development, but getting municipalities and anchor tenants on board is not always easy, Flynn said.
Target, for its part, is not ready to surrender its parking spaces too easily, said Laurie Mahowald, Target's vice president of real estate. “We will protect the convenience and the experience for our guests,” she said. Even so, Target has recognized that the growth of ridesharing has reduced the need for some large parking lots. “For the past six years," she said, "we’ve been selling outlots where the parking is no longer needed.”
By Brannon Boswell