The urban life is moving to the suburbs. People are getting priced out of the city or find it hard with kids to live downtown, but they, like many people today, still want that walkable city feel developers are bringing the city to the burbs.
Richard Florida, the professor who has been writing about the “Flight of the Creative Class” for sometime now, was early on the idea that the most attractive cities worldwide would fill up, partially by draining the most creative (as I read dynamic) people from less interesting parts of the world.
More locally in the USA, we see this happening most acutely in San Francisco (real estate prices May 2012 – May 2013 increased 25% to average selling price of 1M) and in New York. With this demand, prices for homes in attractive cities like SF, NYC, DC, LA, Seattle and Boston have risen strongly, pricing out many people. Furthermore, we have the issue of boomers downsizing to the city, increasing price competition on city properties which Gen Y can not compete with ( I wrote about this on the Walnut Hill Advisors site – Sorry Gen Y Grandma Wants Your Pad).
So if younger singles and younger families want walkable shopping and a social “downtown” center feel, what do they do? Downtown areas have been undergoing revitalizations for a while, but I also find interesting these outdoor shopping “districts” that are popping up. Bob Kraft tried to do this at Patriot Place in Foxboro, MA – next to the football stadium. More recently, a very nice shopping district opened in Lynnfield, MA called MarketStreet -Lynnfield.
Source: Boston Herald
This intrigues me because consumers around Lynnfield, an upscale MA town, have 2 classic style covered malls in the north and south directions (Burlington Mall and North Shore Shopping Center in Peabody) and I am wondering how much business will be taken from those malls.
The Downtown Feel is the Key
Village at Corte Madera (from Pankow.com)
MarketStreet is a shorter drive and the style is the outdoor, connected box store set up (See map HERE for layout). And with malls classically being the hangout of teenagers, and the renewed desire for fresh air development, I can see this type of development thriving. It also provides a bit of downtown feel. A mall feels like a mall. But people prefer (IMO) walking downtown and visiting stores, coffee shops, and restaurants while getting fresh air between locations. MarketStreet and developments like this – the Village at Corte Madera in Corte Madera CA comes to mind – accomplish this goal and save shoppers the 30 minute ride to the city (and the parking fees, tickets, traffic and annoyances). And George Carlin would be partially pleased as MarketStreet sits on top of an old golf course (he’d prefer alternate uses to a shopping center).
George Carlin on Golf Courses
The Village at Corte Madera is a very nice, relaxing place. For a development full of chain retail stores, it’s very relaxing (grabbing a Boudin’s bread-bowl soup doesn’t hurt either!)
Boudin’s Bread Bowl Soup!
The idea though is that the city is coming to the country. And more fun shopping areas like this will pop up. I wasn’t sure I’d see too many in my area due to the weather as they seem to be a better fit for places with year round nice weather. But towns like Framingham MA proved it could work, even when the layout isn’t that beautiful (I prefer Corte Madera’s set up – parking on outside, only walking in the store front area- as opposed to MarketPlace with parking in front and back, leaving me exposed to being run over by some crazy 5’4” blond stay at home mom in a Ford Excursion or Chevy Suburban, who is texting madly with 2 kids in the back jumping around).
Is This Investable?
Possibly. From a retail standpoint it’s the same stores – mostly. Due to the image they’re trying to create, they will let in Five Guys but not McDonalds (that is a big trend) for example. Whole Foods anchors MarketStreet – not Stop n Shop, Market Basket or Shaws (3 local standard grocery chains). So the image build can help investors in more upscale versions of consumer items like groceries and burgers.
The other and maybe better investment idea, if you do your research, is real estate. I’ve written many times about the flight of the boomers – how they are downsizing and their kids don’t want their big 5 bedroom house in that boring suburb. But some select burbs, maybe Burlington MA for example, will be the alternate to the city for families and those who work in the suburbs or are priced out of the city. In this case I can not point to a ticker, but I would point you to keep your eyes on development news and what’s happening in various real estate locales around you.
If you can think of other angles, feel free to drop a note!
Additional Reading – AOL – New Urban Centers Replace Suburbs
