How One Retail Center Is Evolving With The Changing Times

With the popularity of malls waning and the online retail industry thriving, developers and property owners are looking for unique ways to liven up their retail centers. One such way is by creating a destination where people gather, which Ellis Partners plans to do through its renovations to The Pruneyard in Campbell.

The developer just broke ground on much-needed renovations of the 27-acre mixed-use shopping center.

Ellis Partners bought the property on East Campbell and South Bascon avenues in 2014 for $280M. The mixed-use property includes 365k SF of Class-A office, 235k SF of retail and restaurants and a 170-room DoubleTree Hotel by Hilton. The last time The Pruneyard was renovated was nearly 20 years ago.

“We saw a lot of potentional in Pruneyard to transform it, make it more of a community asset and resource,” Ellis Partners co-founder and managing principal Jim Ellis said.

Ellis said his firm specializes in acquiring and repositioning older retail mixed-use properties that may require a lot of creative attention, and the renovation process isn’t necessarily straightforward. Ellis Partners did similar transformations at Jack London Square in Oakland and Town and Country Village in Palo Alto.

Much of the renovation at The Pruneyard is driven by the changing demographics in the West Valley market, including Willow Glenn, Los Gatos and Campbell. While Baby Boomers and Generation Xers still make up a chunk of the population, more Millennials and tech employees are moving into the region. The developer saw this as an opportunity to better align the center with the demographic shift.

“Millennials have very different tastes and desires and demands of retail,” he said. “If shopping properties like this don’t evolve with that change, they will die.”

Ellis Partners partner and senior vice president of asset management Caroline Morris said the newest renovations will be a chance to improve the physical aspect of the center while increasing retail offerings. The merchant mix at Pruneyard has remained much the same over the last several years.

She said the owners of every other major shopping center, including Santana Row and Stanford Shopping Center, have done extensive renovations to keep up with the evolution of retail.

The renovations will include pedestrian walkways to improve accessibility throughout the center, office towers, hotel and parking. The developer will add new landscaping, improved wayfinding and monument signage, comfortable seating and gathering places throughout.

“Most important to us in the renovation is the creation of all these outdoor community areas that will be new areas within the shopping center to attract a lot more people to shop and to gather and hang out and attend special events,” Ellis said.

A multipurpose raised platform will be used for seating or entertainment, events and other programs. Ellis Partners will embrace the existing hacienda architecture and big-timber framing to give the center a more authentic and consistent hacienda design since it is currently a mishmash of previous renovations.

Ellis Partners also plans to add four new retail buildings with 35k SF to 50k SF of additional space, a 100k SF five-story office building and 680 additional parking spots.

With retail centers competing with the ease of shopping from home, the success of attracting people to these centers lies in creating an experience worthy of leaving home.

“That means smaller stores that engage the customer and create more of an experience,” Ellis said. “That applies to all categories of retail. It applied to food concepts, which are now becoming much more sophisticated and creating a better variety of higher-quality food.”

Among the newer restaurant tenants will be Burger Lounge’s first Northern California location and artisan sandwich shop Mendocino Farms. Family-run taqueria Lulu’s and Tin Pot Creamery, a small batch organic ice cream shop co-founded by former Facebook pastry chef Becky Sunseri, will open their first South Bay locations at Pruneyard. Asian Box will offer farm-to-box Asian street food. Peet’s Coffee & Tea will get a jewel-box building that will frame the central part of the property.

There are benefits to the online shopping trend for retailers. They don’t need as much space, they don’t have to have all their inventory on hand, and they are finding ways to capitalize on what the internet provides while focusing on improving the customer experience.

“Malls will continue to be relevant as long as they continue to provide gathering places. People don’t want to stay at home behind a computer. They still want to go into a store and have that experience,” Morris said.

New retailers include Blossom Nail Spa and Book Inc. Existing retailers and restaurants also are receiving updates and renovations. Trudy’s Brides & Special Occasions just underwent a 12-month extensive remodel to add more floor space and a spacious second floor. Camera 7 Cinemas will be refurbished with leather recliner seating and a new restaurant and bar to offer in-theater dining. Trader Joe’s plans to remodel and expand its long-standing store by 15%.

Recently completed renovations at the DoubleTree enhanced the interior and added new guest amenities such as a remodeled lobby, refreshed corridors, PY Kitchen & Wine Bar (a new restaurant) and a 1,700 SF fitness center. The renovation also included new landscaping, updated plazas and public spaces and furnishings around the pool, a new roof and paint.

The shopping center renovations are expected to be completed by the Christmas shopping season this year with the new retail buildings expected by late 2018. No start date has been set for the new office development. Cushman & Wakefield is pre-leasing the office space while Bockman Rock will lease the retail space.