The Midwest is considered the heartland of America, but it’s not necessarily the first region that comes to mind when people think about shopping destinations. Developers in St. Louis are attempting to change that, reminding retailers that there’s value outside of Los Angeles and New York.
City Foundry STL is a new mixed-use development in the heart of the city that brings together retail, food, and entertainment concepts to a city already bustling with new projects. The space officially opened in August 2021, but this year has started to fill out and now sits at 91% occupancy.
There’s a blend of local and national businesses that have set up shop at City Foundry, including Alamo Drafthouse, Sandbox VR, City Winery, Golden Gems, and May’s Place. There’s also a food hall inside that houses 18 restaurants.
Sam Adler is the managing director of development at New + Found, the development firm behind the project. He told Retail Brew that City Foundry took inspiration from New York’s Chelsea Market and Atlanta’s Ponce City Market—just on a smaller scale.
“The customer base of City Foundry is both those visiting for the first time as a destination, but also that weekly customer that’s coming back to visit their favorite local tenant or their favorite restaurant in the food hall,” Adler said. “That mix is really important to appease our customer base and keep our customer base diverse, and also give strong local tenants a platform through our property that they couldn’t get anywhere else.”
Mix it up: The key to City Foundry—and really any mixed-use development—is tenant curation, Adler said. The split between local and national tenants that occupy the development is roughly 50/50, and he explained that the team doesn’t just look at financials when determining the viability of bringing in new ones.
Alder said that assessing prospective tenants’ business models, which ideally pay attention to customer service and the customer experience, is much more important. He said a strong online presence and an experiential component are extremely valuable, which is why having entertainment operators like Alamo Drafthouse and Puttshack is worthwhile.
City Foundry has seen an 83% YoY increase in visitors: 2.1 million in the last 12 months.
Visitors spend an average of 91 minutes at City Foundry, and food halls have seen a 40% increase in YoY sales; while same store retail sales among those that have been open for the full two years have seen a 30% YoY bump.
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“We’re in a unique position where we can fill the remainder of the space correctly and keep that dynamic, unique environment, being one of the most desirable properties in town,” Adler said.
Glow up: City Foundry is just one story in the tale of St. Louis’s evolution as a retail destination. Like most major cities, St. Louis has dealt with offices shuttering or operating at a much lower capacity than before the pandemic.
Since the start of the year, the St. Louis office market has lost 114,000 square feet, giving the city a vacancy rate of 21.05%, according to a July Collier’s report.
The city has roughly 2 million square feet open for leasing, which includes six spaces that are more than 100,000 square feet. Colliers predicts that many of these spaces will remain unleased as hybrid and work-from-home models persist.
However, a couple projects in the pipeline might change the dynamics of the city as employers attempt to lure workers back to the office.
New + Found currently has 270 apartments under construction at the City Foundry campus that are slated to open next year.
A second Topgolf location is expected to open sometime later this year in the city’s Midtown region, which Adler described as being “on an exponential growth path” given its proximity to the city’s innovation district, a hub for tech and medical office spaces that draws in young professional talent, Adler said.
And as an added bonus, Major League Soccer expansion team St. Louis City SC started playing its home games at CityPark, a new soccer-specific stadium in the city’s Downtown West area.
“The developers here locally have had to be super creative and create dynamic projects like City Foundry to talk some of those national tests into even considering St. Louis as an [Metropolitan Statistical Area],” Adler said. “The retail environment here in general is very strong, the vacancy is very low, [and] I feel like Covid was weathered very well.”