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COCOWALK EPITOMIZES ENTERTAINMENT

By Joel Groover

Today the notion of mixing retail with leisure uses like cinemas, bars and restaurants in an open-air environment is a no-brainer among developers. But when Yaromir Steiner was pitching the idea in the late 1980s, national tenants were skeptical. How, after all, would they keep all those diners, moviegoers and barhoppers from gobbling up the parking spaces?

Nonetheless, Steiner, then president of Miami-based Constructa U.S., a subsidiary of French developer Constructa, pushed forward with CocoWalk. The three-level center opened in Coconut Grove, Fla., in November 1990 with 31 tenants arrayed in a horseshoe setting around a large courtyard. The roughly 200,000-square-foot center’s shade trees, ample outdoor seating and Mediterranean architecture, along with its entertainment-heavy tenant mix, encouraged shoppers to hang out rather than hustle back to their cars.

“It had at least four restaurants, one bar, one comedy club, a nightclub and a cinema,” said Steiner, CEO and founder of the Columbus, Ohio-based Steiner + Associates development firm. “All this not only in the proximity of retail but on top of it, around it, under it, everywhere.”

The net effect on CocoWalk’s bottom line was unmistakable, says Steiner. “I still remember how the Limited Express store, which was about 10,000 square feet, was doing $700 a square foot a year and a half after we opened,” he said. “The Banana Republic store, which was about 4,000 square feet, was doing $1,200 per square foot. In today’s numbers this would be like $1,000 per square foot for the Limited and $1,800 per square foot for Banana Republic. Those are Manhattan numbers.”

CocoWalk may not have single-handedly ushered in the craze for urban entertainment centers that marked the early 1990s (Steiner points to Horton Plaza, in San Diego, and Irvine [Calif.] Spectrum as examples of similar projects built around the same time), but those sales numbers definitely caused a stir.

The same could be said of D.I. Design and Architecture’s in-fill design, which earned the project the Urban Land Institute’s Architectural Innovation and ICSC’s Best Urban Mall awards, among others. CocoWalk was clearly the inspiration for such Florida centers as Bay Walk, in St. Petersburg, Steiner’s Centro Ybor, in Tampa, and The Gallery at Beach Place, in Fort Lauderdale, says Mia Stierheim, retail director at Colliers Abood Wood-Fay, a Coral Gables, Fla.-based commercial real estate services firm.

As Steiner sees it, CocoWalk contributed to the shopping center industry in three ways. First, it helped establish the fact that leisure uses are noble and need not be segregated from retail by, say, exiling them to an outparcel. Further, it led to widespread recognition that such uses must be part of a vibrant, truly open-air environment. And it proved that destination tenants could indeed be stacked atop retail. “You can go vertical,” Steiner said. “The cinema does not have to be on the ground.”

Since 1990 CocoWalk has drawn some 40 million visitors from 160 countries. Mandeville, La.-based PMAT Real Estate Investments acquired the property from Thor Equities last September for $87 million. PMAT, which was launched in 2004 by Bob Whelan, former CFO of Sizeler Property Investors, immediately put in $6 million to renovate CocoWalk. “We did a soup-to-nuts renovation,” Whelan said. “We tore out the old red-brick pavers and put in tumbled marble. We built planters, put in new landscaping, the whole thing. Now we’re in the process of re-tenanting the center.”

Despite a 10 percent vacancy rate and a clear need for a capital infusion, many of CocoWalk’s tenants were posting $700-$800 in sales per square foot at the time of the acquisition, says Whelan. Today CocoWalk’s 36-retailer lineup includes an AMC cinema, Cheesecake Factory and Victoria’s Secret. Chili’s and Yogurbella are among the recently signed tenants.

“Fundamentally, we want to cater to the baby boomer crowd,” Whelan said. “We know they’re not going to come here if we don’t provide them with the mix of high-end restaurants, retail and entertainment they demand.”

That mix surely would sound familiar to Steiner. Even as they look to the future, then, CocoWalk’s new owners aren’t about to forget this center’s influential past.