Trends and Demographics to Drive Changes to Northbrook Court

Trends and Demographics to Drive Changes to Northbrook Court

Changing demographics, new shopping patterns including the way different generations approach the shopping experience, and the demand for new types of stores are providing challenges for the owners of Northbrook Court. Already talks have begun with Village officials about how to address the future development of the mall, the largest retail shopping center in the Village and a renown North Shore shopping destination. At a recent joint meeting with the Village’s economic advisory panels, the Industrial Commercial Development Commission (ICDC) and Economic Development Committee (EDC), two development officials from GGP, which owns Northbrook Court, shared their research about changing shopping patterns and trends. Adam Tritt, GGP VP of Development, and Ben Freeman, Senior Director of Development, explained that the process has already begun to re-evaluate some of the tenant spaces in the center, particularly with underperforming anchor stores and over 10% of leases up for renewal this year. They emphasized that they see new opportunities and are optimistic about the future of the center, which is an important part of their high quality portfolio.

“The old model of the mall of the ’70s and ’80s (very formulaic) is giving way to more free flowing experiential form of real estate,” stated Tritt. “Whereas once malls from the early 2000s were built, they didn’t change their form, now with changes in shopping demands, the form also needs to change.” They noted that malls with fashion -based anchors worked for a long time. “Now you’re seeing what drives people out of the house — out of the office at lunch time — is more diverse,” commented Tritt. “We are seeing a higher demand for restaurants, interest in grocery stores, entertainment, movies, as well as service businesses.”

Despite talk in the marketplace about the massive growth in on-line retail sales, they cited statistics that showed that the Internet actually drives shoppers to brick and mortar stores. According to their research, 93% of all retail sales can be entirely or partially attributed to brick and mortar stores and 91% of all retail sales are conducted in a brick and mortar store. “The only thing the Internet killed was catalogue sales,” they pointed out. Using Apple as an example, they noted that many retailers have figured out the relationship between the efficient purchase of goods and the experience at their stores. “Retailers themselves realize that existing only on the Internet will only get them so far,” commented Tritt. “They, too, have to exist in both spaces.” Brick and mortar stores which offer the opportunity for returns and pick-ups of Internet purchases often generate additional sales they pointed out.

Looking at millennials (ages 25 – 34), who have the highest propensity to shop, research shows the demand for experiences is significantly higher than other generations. However, many of the uses they seek (entertainment, big box, grocery, hotels) are prohibited by Northbrook’s Zoning Code, which presents GGP’s biggest challenge. Other challenges include the center’s location. Unlike other malls which have 360-degree access, Northbrook Court drives all of its traffic off a single street — Lake Cook Road.

Village President Sandy Frum commented at the meeting that the Village has already begun conversations with GGP regarding Northbrook Court. However, she pointed out that Northbrook has a culture of control. “Our codes are relatively restrictive,” she commented. “We’re really good at reacting when someone asks us to change something, but often are not good at giving someone the leeway to negotiate a new idea. We need to figure out how to work together so GGP has an opportunity to make changes,” she added.
Freeman and Tritt encouraged the Village to be open to new and different uses in the mall and to be flexible with zoning and development regulations to give them the freedom to respond to the changing retail environment. “The status quo has the potential to be disruptive,” commented Tritt. ” If we do nothing then we risk catastrophic loss.”

The two indicated that GGP has already redeveloped 91 of their 95 vacant anchor department stores, which has been tremendously successful. In addition, they both see changing energy and dynamics in a market that was previously static, offering new opportunities. “Retail is alive and changing,” commented Tritt. “That’s really the story we believe in and know to be true going forward.”

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