The Project Renovation Paradox

When times are good, property owners don't want to impact revenues by embarking on a renovation project; causing site disruptions which impact tenants, visitors and shoppers. Paradoxically, today, poorly performing properties in need of a facelift lack the necessary revenue to do anything about it.

Alas, a Catch-22: If your property is making money, you don't feel the need to renovate. But when sales and rents are down and you feel the need, you don't have the money to renovate.
So, when is a good time to renovate?

John F. Kennedy once said, "The time to fix the roof is when the sun is shining." In terms of the economic climate, these are cloudy times at best (even stormy, in many locations). So, what can a property owner do today who is strapped for cash?

Find some money. Invest in capital expenditures and make decisions with an eye on ROI.

The most obvious advantage of renovating in this environment is cost savings. Now is the first time in the 30 years that construction costs have actually come down. Historically, they have gone up steadily, if not sharply. Today, in many parts of the world, costs are down by over 10% from just six months ago. According to statistics compiled by Rider Levett Buchnall (http://www.americas.rlb.com/documents/cost/reports/2009_q2_qcr.pdf), construction costs in cities like Denver and Seattle declined by as much as 8% in the first quarter of 2009 alone.

A second advantage: When business is slow and there are vacanies, there is less disruption to guests and less impact on cash flow from operations. On top of that, construction can proceed more quickly, and property owners and managers can get the word out that their property is newly renovated and open for business.

Properties that have been newly renovated will be in the best position to restore and/or raise rents and increase occupancies. Properties that defer needed maintenance and refurbishment and wait until times are better will miss being able to take full advantage of the inevitable upturn. When thinking about where to shop or go see a movie families most often go to the ones that are either new or newly renovated. Research data from a recent study conducted by STR shows that, over a five-year period, revenues for renovated properties increase at three-and-a-half times the rate of un-renovated properties.

Bottom line: Hard times are good times to prepare for better times.

Images courtesy of: Global Graphica, Mission Viejo Life

Some Text Courtesy of: WATG

Vision for Future Developement

Although most of Southern California is not as urban as many of the metropolitan areas, as time goes by we may be seeing Southern California becoming more dense. This is the type of thinking for future development that will provide smart growth.

Retail + Workforce Housing + Transit Oriented Development + Sustainable Design x Green Technology = Wilson Yard’s Vision for the Future



What the developer requested: a mixed-use development on a wedge-shaped former rail yard site, including a vertical urban Target store, affordable and senior housing, new Aldi store, ground-floor retail and offices on upper floors.

What the design team responded with is not just Transit-Oriented Development-based mixed use integrated urban shopping, nor only a new Target store anchoring an environmentally-friendly, multi-use development project – through admittedly it is both of these. What they created – with shopping and a little political finagling – is nothing short of a complete transformation of a tired neighborhood into a thriving, living, breathing community.

What they created is Wilson Yard.


With Wilson Yard the future isn’t tomorrow or next year – the future is now. To evidence this you need not look any further than the Transit-Oriented Development: a vibrant, livable, compact and walkable shopping environment centered on high-quality train and bus systems – all perfectly attuned to our times.

Wilson Yard works on many levels. By incorporating the best tenets and practices of urban planning and design, sustainable design, affordable workforce housing and green technology, the project achieves something more, beyond the realization of a well-designed retail project. The development ultimately completes and heals the site, neighborhood and community where it resides. It’s a case of the universal in the particular. By providing exactly what is needed at the right time and in the right place you end up envisioning the shopping environment of the future.



Covering a full city block, the resulting project is a veritable Rubik’s cube offering shoppers and pedestrians a continuous, seamless shopping environment of integrated interlocking components.
Future-looking without being futuristic, Wilson Yard is an out-of-the-Big-Box, innovative idea that progresses everyone’s current understanding of what the shopping experience can ultimately be.

Anchor: The retail anchor, a new 180,000 square-foot two level Target store with an energy-saving green roof.

The Matrix: 25,000 square feet of additional retail – forming the proverbial simple line of outwardly facing stores and office space – here marrying the project’s anchor with the residences along an attractive new streetscape.

Urban Density: Two rental buildings with affordable units including a mixed-income building accommodating 84 families in one-, two-, and three-bedroom apartments and an accompanying seniors complex with 99 affordable one-bedroom unites.

Green Technology: In keeping with Mayor Daley’s ongoing commitment to make Chicago a showpiece city for green technology, the Wilson Yard project will be certified LEED SILVER, the nationally accepted benchmark for the design, construction, and operation of green buildings by the U.S. Green Building Council. The project’s sustainable components include green roofs and a solar-reflective roofing system for the residential buildings, collection of storm water and controlled release of waste water, a new green space to serve as the outdoor campus for a neighboring elementary school, and reclaimed parking space beneath the CTA ‘L’ tracks.

Our futuristic vision of the retail real estate industry? It’s being built right here today.


The above project is currently being developed and was designed by FitzGerald Associates based in Chicago.