By this point, after two years of intermittent lockdowns and the ensuing impacts on businesses, we can all see it with our own eyes: retail is fickle. I’ve written about this more times than I can count, since the very onset of this blog, waaaaay back when the biggest issue I could see was that national chains like Walmart and Target liked to shutter their 1980s-era architectural prototypes, move to a more lucrative piece of land three miles away, and leave a giant vacant shell—a greyfield—to sit and decay. This still happens, but back in the early 2010s, I concerned myself more with economic outcomes of malls, trying to discern how some malls continued to flourish while others died on the vine. What halcyon days those were! Now, when even Chicago’s heavy-hitting Water Tower Place on Michigan Avenue (the famed “Magnificent Mile”) is ailing, it seems inevitable that most malls are going to meet their maker in the next decade or two. Retail is unequivocally hypersensitive, not just to income and population density, but subtle gradations in differences among location (location location location), which probably goes hand-in-hand with being fickle, just as those subtle traditions in location correlate strongly (but not exclusively) to income and population density.
And why is it so fickle and so hypersensitive? Because it can be. At least in the United States, there’s an almost comical surfeit of supply—of structures to house the retail—and not enough businesses that demand it. After all, not every business needs a dedicated brick-and-mortar, which has long been the case for service oriented businesses; the Internet is enough for executing many services (e.g. tax filing), while other services (e.g. auto repair) usually require the customer to show up at the business’s premises. However, as time advances, online services have become easier for the average person to engage, not only because it is more intuitive, but an ever-growing portion of the population has easy access to the Web and is sufficiently adept at using it. As long as the consumer is willing to wait the necessary shipping time, the brick-and-mortar aspect is increasingly superfluous; it devolves into little more than showcase room for merchandise. And leases, utilities, property taxes, et cetera are all pricey. Meanwhile, the the quantity of structures available to house the remaining retail-oriented businesses remains significant; there’s still a lot of potential bricks-and-mortar out there. While much of this vacant or underutilized space is falling into neglect, it isn’t decaying nearly as rapidly as the decline in demand for such space…or the businesses that used to house it. They now need warehouses more than showrooms. So the remaining retailers that still prefer physical structures can be very, very picky with the real estate portfolio that remains.
This leads to the latest predicament for developers/owners of retail properties. What type of building, if any, is a surefire bet for attracting a potential tenant? If the college town of College Park, Maryland is any evidence, there’s one more building we can strike off the list.
College Park is in some respects an unusual town. It hosts the University of Maryland’s flagship campus, with an enrollment of 40,000, making it the largest school within the Washington DC metro area. That’s right: College Park and the University of Maryland are actually closer to the nation’s capital than to the largest city in the state, Baltimore—though Baltimore isn’t far away either. But College Park is a mere two miles from the outer boundary of the District of Columbia, and approximately thirty miles from the Baltimore city limits. Situated at the northern reaches of Prince George’s County, College Park and UMD are in almost all respects a suburban campus, but it’s not really an automobile-oriented environment. The University of Maryland claimed the site back in 1856, when it began as agricultural college, a private institution. But the Civil War and an enrollment decline forced the fledgling school into bankruptcy. The state assumed half ownership, thereby making Maryland Agricultural College a de facto state school. Though successive presidents helped rescue the school from insolvency, it remained largely an agricultural institution until the late 1910s, when the state took full control and integrated it fully into the University of Maryland system.
The school’s slow ascendency into its major role within the state should offer ample evidence of its role and character at the time. Simply put, its location in Prince George’s County affirmed it as a rural campus in an agrarian setting. In fact, the town of College Park didn’t really begin to develop around the campus until the late 1880s, only achieving incorporation in 1945, by which time it had begun to proliferate, largely through Washington DC residents seeking a less urbanized setting. Between the 1950 and 2010 censuses, College Park tripled in population, and suburban communities burgeoned in the agricultural lands surrounding in all directions (all, that is, expect northwest of College Park, which hosted then as of now the Beltsville Agricultural Research Center, an oasis of pastoral landscapes amidst the otherwise intensely urbanized Prince George’s County, with a population nearing one million).
At present, just as during the time of its founding, the City of College Park exists as the residential and commercial district serving the University of Maryland, though its proximity to the District of Columbia has made it a fortuitous location for other important federal subunits, serving the Food and Drug Administration (FDA), the National Oceanic and Atmospheric Administration (NOAA), and the National Archives. This proximity also makes it, for all intents and purposes, an “inner ring suburb” that enjoys a partly walkable character, and becoming more so with the construction of these high-rise apartment buildings. Even though the main arterial is auto oriented, the school and residential campus still operate at a walkable scale. College Park is also fully accessible by not one but two prominent commuter rail lines: both WMATA Yellow/Green Line (the DC Metro system) and the MARC (Maryland Area Regional Commuter) Camden Line that connects Washington DC and Baltimore. Perhaps most importantly, the fact that the city is home to a significant portion of the 40,000 students (those who aren’t commuters) means that it has a built-in demographic base housed in these high density settings: dormitories and multi-family apartment buildings like the one in the original photograph. All things considered, College Park should be a gold mine for various retailers—restaurants, specialty shops, watering holes (coffee, not booze!)—that serve the student population.
Cue the inevitable use of the great nullifying conjunction: BUT….
In terms of retail health, College Park isn’t quite the equivalent of gasoline splashed on turf grass. But it’s not what one might expect, despite numerous efforts to densify the commercial center through multi-family residential projects, most of which look like they date from the last fifteen years or so. I’ll feature two prominent buildings along Baltimore Avenue (US 1), the main arterial that essentially bisects this city of a mere 5.5 square miles, whose largest undeveloped parcel is the UMD Golf Course.
The Varsity College Park apartment building has room for 897 residents across a hulking structure with two courtyards (a figure-eight shape). Featured in my first photo on this article (with Vigilante Coffee in the foreground), it sits less than 200 feet from some of the main engineering buildings at one edge of campus. From the archived history on Google Streetview, it looks like the construction of Varsity completed sometime around 2011; prior to that point, land uses were considerably more low-slung and automobile friendly.
The entire first floor is retail, and, during my visit, it certainly wasn’t dead, and at least one or two of the tenants appeared well patronized. But it still looked about half-vacant, which surprised me given not just the population density nearby, but the tendency for these apartment dwellers to navigate the area by foot. What was the deal?
For reasons entirely unclear to me, the developers of Varsity choose to elevate the first-floor retail a good ten feet above street level. The previous image shows the primary walkway for accessing the retail, but that’s all it is: a walkway. It requires ascending a staircase for access.
For those who might immediately question (as I did) about wheelchair access, the opportunities are immediately adjacent to the stairs and are clearly visible.
That’s great and all, but it still means that the storefronts are only accessible at key stairwell locations: the north end depicted in these photos…
…one point in the middle of the block-long structure…
…and the south end.
I also spotted a vehicular entrance to the more southern of the two courtyards, providing parking and an entrance to the massive Looney’s Pub that stretches across the entire southern side of the building.
The placement of storefronts across both the entirety of the façade fronting Baltimore Avenue as well as the south side of the building (which directly abuts the UMD campus), is a generous retail provision that one might expect for a campus filled with students that love to swipe their parents’ credit cards at fast-food restaurants, convenience stores, and coffee shops (but never ever bars; most of them are still under 21, so the thought never occurs to them to purchase alcohol). That said, the fortuitously located retail at Varsity apartments doesn’t really work. In the grand scheme of things, the image walking along the main sidewalk adjacent to Baltimore Avenue looks like this:
Peering in both directions, its virtually impossible to see any of the retail tenants. It’s just a mass of hydrangeas. I like hydrangeas, but they’re not exactly as stimulating to the eye as a storefront window, and from the standpoint of real estate development pro forma, they’re a sunk cost. I guess they’re better than a blank wall, but they only exist to conceal it.
I have a feeling that the developers, if prodded with my annoying questions, could easily provide a construction based justification for why they raised the building ten feet off of street level. Perhaps there’s a structural issue and these walls hide parking, and the excavation costs prevented them from building the parking underground.
Perhaps they wanted the entrances to have a built-in pedestrian shelter from Maryland’s notoriously soggy spring days. Perhaps the noise and exhaust from this busy arterial made the idea of al fresco dining unappealing, and the developers wanted to accommodate restaurant tenants. (This third explanation isn’t very likely, since the passageway is only wide enough to host a few deuce tables.) Regardless, it’s not inviting. And I’ll concede that, in an era of easy online searches and Google Maps to find specialty stores, this visual “obscurity” is less of an issue every day. But the lack of a real street presence makes these tenants less likely to capture impulse purchases, and students (the biggest target demographic) are notoriously impulsive. This probably explains why, over the years, at least one gourmet burger joint and two yogurt/smoothie places have closed. And the spaces remain vacant for months, if not years.
Additionally, the fact that the retail entrances are both elevated and recessed onto this grade-separated walkway means the doors and interior lights sit within shadows, as evidenced from this Street View. A vehicle driving by, even if at congestion-induced slow speeds, cannot easily peer in, so the occupancy status remains a mystery. The only thing to go by are the exterior signs, above that shadowy “arcade”.
The building to the north of Varsity College Park, University View apartments, seems to date from about the same period, and, prior to its development, the land appeared completely unused: nothing but grass and a handful of scrappy trees. University View features a much smaller building footprint but is considerably taller, with twelve stories to Varsity’s six. The unit count is probably similar, even if the capacity to provide first-floor retail is less. But, like Varsity, it creates extra complications by offering yet another grade-separated first floor.
It’s less of an extreme grade change than Varsity, but University View still creates a situation where accessibility can only occur at key points where the necessary four stairs exists. (A handicapped ramp is on the opposite end of the building, just out of view from these photos.)
Again, it’s not a deal-breaker: but University View’s retail is also about half-vacant. I fail to see how this condition improves the desirability of the retail space, because it again discourages impromptu decisions. It would even be better if the protective railings on the upper level had gaps, so a skinny person could sidle on through if they want something mid-block. This is a bit of a rhetorical stretch on my part, I know—we can only speculate how much business is lost because of the grade change, and it’s probably negligible with University View (certainly when compared to the more extreme Varsity). But it doesn’t make it more appealing for a prospective tenant.
I’ll concede that these pictures are two and a half years old, the equivalent of a generation in commercial real estate cycles. Conditions may have improved. At the very least, a bubble tea place appears to have opened in Varsity—quite an achievement given the campus restrictions imposed by COVID-19—while a Chinese restaurant in University View closed. Incidentally, these slightly elevated structures seem to be the status quo for new construction in College Park. And the retail vacancies seem persistently high, given that the buildings (hotels or student-friendly apartments) are relatively new, high-density, mixed-use, and a stone’s throw from a major college campus. But the biggest irony of all sits directly across the street from the Varsity building:
It’s a holdover from College Park’s days when it was a lesser suburb, hosting a university in which commuters comprised a sizable share of the student population. Far more students seek to live in or near campus in the 2020s, rendering a parking-centric strip mall like this quaint, if not obsolete. And the Campus Village Shoppes (more clearly seen here) is certainly run-of-the-mill: old, ordinary, sparsely landscaped, ugly…and consistently over 80% occupied! Often over 90%! I’m sure the leasing rates for space at this strip mall are far lower than the first floor of the Varsity or University View. But the fact remains that prospective tenants have a choice. And far too many are opting for the humdrum 1980s-style shopping center, despite newer and hipper options across the street. Maybe the aforementioned design defects are holding the Varsity and University View back. Whatever the reason, as long as developers keep building these high-density mega-projects, retail tenants are just going to get increasingly finicky. And these conditions share one common thread: retail has no choice but to be choosy in site selection, because it is under pressure to innovate the delivery of its goods. It may be a long time before College Park sees any churn on its most precious real estate: the strip mall.