New owners consider fluff 'n' dust for Birkdale Village

Birkdale Village has been acquired by a large Cleveland-based Real Estate Investment Trust for an undisclosed amount. The new owners say they will enhance the successful mixed-use project in Huntersville with a handful of new, nationally known retailers.

"The changes will be very positive; [we are looking at] a few national tenants-retailers of similar quality to Williams-Sonoma, Talbots and Chico's," said Marc Hays, senior vice president of leasing for Developers Diversified Realty, one of the nation's largest owners and managers of shopping centers.

Developers Diversified acquired Inland Retail Real Estate Trust, the prior owner of Birkdale Village, on Feb. 27, for $6.2 billion. Inland purchased the 52-acre project from the original developer, Crosland. Crosland officials in Charlotte did not return phone calls.

It is not uncommon for local developers-particularly those that are not on a national scale-to sell large projects to big, national REITS, giving them the ability to cash out and move on to new projects.

With some 800 shopping centers in its portfolio, DDR targets the market-dominant community centers around the country.

Birkdale rode the crest of an early wave of "lifestyle" centers that combined retail, office and residential in one project. It's been a success since it opened, although, in a way, it was nothing new. Years ago, downtowns in small cities combined all three uses in communities where people lived and worked.

Calling Birkdale Village a "great property," Hays said it is the type of center that retailers are excited about. "The whole idea of live and work and play-it's the terminology you hear constantly in our industry."

Still, the company has shopping centers that produce a higher rate of return than Birkdale.

Hays said the "other thing we want to do is be proactive in our approach," more so than Inland. Developers Diversified is willing to invest more in the property to attract the best tenants. "We will spend the appropriate money to nurture the center," Hays explained.

One method will be to congregate empty spaces so that a larger national tenant can join Birkdale's upscale mix. "We may need to do a little remerchandising at the center" for tenants who aren't doing as well as they could be doing, Hays said.

He is happy with the Charlotte market, an enormous contrast from markets like Cleveland which are flat, at best. Hays said, "Charlotte as a whole is clearly an appealing market, a fairly young city, vibrant, lots of young families, set for a lot of future growth which is critical to us."

The North Charlotte market, which he routed along Interstate 77, is equally appealing.

He noted development around Lake Norman, as well as rising property values, have been "astounding" over the past several years. "That's the customer that Birkdale is trying to serve. It is exciting to us. We want to serve that customer even a little bit better," Hays said.

He was unaware of plans announced a month ago by Carlsen Douglas Development of Huntersville and Arizona-based Bromont Development to build a Birkdale Village-like mixed-use project about a mile away on Highway 21 in Cornelius-only three times larger. No news has been forthcoming since that announcement.

"With the aging population, and more emphasis on warmer climates, [the Charlotte area] will benefit on some level because of that. There are a lot of new jobs being created in Charlotte, which is critical, including Bank of America or a Wachovia. Those new jobs will help to create long-term growth for the marketplace," says Hays, a graduate of John Carroll University in Cleveland.

Brenda Murray is the new manager of Birkdale Village. Developers Diversified's owns or manages 162 million square feet in over 800 shopping centers in 45 states, Puerto Rico and Brazil.