Site Centers was meeting with potential national tenants and investors at the ICSC conference in Las Vegas on the same day it reported that it had struck a big deal: Selling a portfolio of six shopping centers for $495 million in cash.

David Lukes, president and CEO of the Cleveland-based retail landlord, discussed the pending transaction with CoStar News at his firm's booth on the conference floor. The real estate investment trust said in a securities filing on Monday that it had a sale agreement with Pine Tree, an institutional investor, for the half-dozen properties for cash.

Site reported that Pine Tree was acquiring its interests in Arrowhead Crossing in Phoenix; Easton Market in Columbus, Ohio; The Fountains in Plantation, Florida; Kenwood Square in Cincinnati; Polaris Towne Center in Columbus, Ohio; and Tanasbourne Town Center in Portland, Oregon.

Site is in the process of spinning off its strip malls, what Lukes described as "convenience retail" or "unanchored strip" locations, into a standalone public company called Curbline Properties. It plans to include about 65 convenience centers, namely properties without a big-box or grocery store to anchor them. The spinning off of the assets is expected to be completed in October.

As part of that process, Site has been selling many of its traditional shopping centers to focus on convenience. It sold off nearly $967 million of shopping centers throughout last year, and between the last quarter of 2023 and the early months of 2024 divested just shy of $819 million of retail properties from its portfolio.

One of the latest U.S. repurposings of a former big-box anchor has its challenges, according to the design firm on the project. A one-time JCPenney store at the Serramonte Center in Daly Center, California, is becoming Jagalchi, a Korean food market and restaurant, and Barry Bourbon, a principal at Gensler, talked about the process at ICSC.

Elaborating on the retail reimagining, Bourbon described Jagalchi as a bit like a Korean version of Eataly, comparing it to the upscale chain that combines Italian food halls and gourmet grocery offerings.

“This is a project with Regency Centers, and I think it’s just a fantastic example of bringing the new brand to life, and sort of celebrating a curated food experience, not only with groceries but with specialty foods that they are highlighting,” Bourbon said. “It has foods that are derived from the vegan Buddhists. It also has an emphasis on seafood and a high-end restaurant that’s going to have healthy creative offerings.”

He was part of a panel on Sunday called “The Retail Fit Out — Strategies for Navigating Store Design.” Putting a Korean food hall into a JCPenney space won't be an easy fit-out, according to Bourbon.

“You’ve got a lot of infrastructure issues to deal with because it [the former JCPenney] was built for apparel,” he said. “You’re adding a lot of different elements to the building. You’re going to have to add grease interceptors and venting and a whole different HVAC system. So those might not sound like you’re taking a big risk, but actually the landlord and the tenant are both investing in the future by backing a more flexible space that can serve perhaps entertainment or food and beverage.”

The biggest change unfolding across the retail market isn't the consumer, but rather an industry that is finally listening to those consumers, said Annmarie Plenge, the executive vice president of design for Pacific Retail Capital Partners.

"Everyone wants spaces to go to that have a curated collection of retail tenants," she said at an ICSC panel. "But retail doesn't just mean apparel anymore, and that's where the industry went wrong in the past. Now we have health and wellness, entertainment and other facets that correspond to what the consumer wants. The mall wants to be a social hub and has since day one, but the industry veered in the wrong path for many decades."

Now, with redevelopment projects rippled across the national market, landlords are taking the opportunity to make it right.

Most importantly, that means getting rid of the longtime formula of sandwiching a collection of tenants between two or more big-box anchors. Instead, Poag Development Group's Greg Whitney, the firm's senior vice president of development, said it now involves analyzing malls on a property-by-property basis to come up with specific ways that layer reasons for people to visit.

"The solution set for malls is much more varied," he said. "You'll have different solutions for each, and some malls are complete teardowns that you have to completely redesign. But they all mean creating a different experience that maybe includes more restaurants or public spaces or residential or office, at least in a market that can support an office environment."

With costs for retail construction “skyrocketing,” Cushman & Wakefield put together a “cost picture” for its clients, according to Joe Tocco, an executive account director for the brokerage based in St. Louis. The result of its effort was the brokerage publishing its first national retail cost guide.

“We created a 1,800-square-foot inline retail space,” Tocco said at ICSC, and then sent a template form to dozens of general contractors across every major U.S. metropolitan market.

“And what we got back was a treasure trove of data that was objective, that was easy to understand, coupled with an outlook from these general contractors as to where they think things are going to be in 12 months, relative to cost, relative to labor and a few additional things.”

With this research, Cushman was “able to get decent price-per-square-foot [for construction] in all these major metros,” Tocco said, providing retailers with “nice bench-marking opportunities.”

Northern California, the Pacific Northwest, the Southwest, New York and Chicago topped the list for average cost-per-square-foot for retail construction.

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