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Source: Facebook | Goodwill

Will Goodwill Build Good Will With Mixed-Use Retail And Housing Project?

Goodwill in Washington, D.C, in a move meant to lend a big helping hand to one of the communities it serves, is partnering to build affordable housing and a childcare facility as part of the same complex as one of its stores.

The deal, which is being handled with Arlington County-based affordable housing and mixed-income rental apartment company AHC, Inc., is a first for Goodwill, according to local Virginia news affiliate ARL Now. The layout of the complex will consist of a Goodwill storefront and childcare center on the first floor, a processing center on the second and 128 apartment units above that.

Goodwill has historically appealed to lower-income, value-driven shoppers as a non-profit organization with a donation-based thrift store acting as its retail front end.

While the D.C. project is Goodwill’s first foray into providing mixed-use offerings that could be helpful to its core shopper, it is not the only retailer to envision itself as part of a mixed-use community environment.

In the same county where the new Goodwill location is planned, albeit catering to a customer on the opposite side of the economic spectrum, is Pentagon Centre, a mixed-use complex featuring luxury apartments alongside such retailers as Best Buy, Nordstrom Rack, Marshalls and Costco, Urban Land reports.

The Pentagon Centre development is only one example of the trend of developers adding residential living space to what was once retail-only real estate. This is sometimes accomplished by building apartments directly adjacent to existing retail and sometimes by replacing shopping malls entirely with new mixed-use developments. Such real estate space is often already conveniently located.

Mixed-use retail anchored by a grocery store is also becoming a more common sight throughout the U.S.

A 2021 report by Ziegler Cooper suggests that putting a first-floor grocery store in an apartment complex allows grocers a unique opportunity to gain a foothold in urban neighborhoods. It also cites data that first-floor grocers drive rental premiums and accelerate rent growth.

In the case of one mixed-use H-E-B location, the apartments that the grocery store anchored experienced positive rent growth during lockdowns at the start of the novel coronavirus pandemic, while other comparable apartments experienced losses.

BrainTrust

"The Goodwill mixed-use concept in Arlington is a win-win-win. "

Ken Morris

Managing Partner Cambridge Retail Advisors


"This is the best, most human idea i’ve seen in a long time, and it makes perfect brand sense. Hopefully this really works and hopefully they get to San Francisco quick!"

Lee Peterson

EVP Thought Leadership, Marketing, WD Partners


"So many positives from both business and social perspectives. Goodwill will win big as will the greater human community which Goodwill continues to serve so well."

Allison McCabe

Director Retail Technology, enVista


Discussion Questions

DISCUSSION QUESTIONS: How important a role will mixed-use developments play in where retailers locate stores over the next decade? Do you see retailers actively planning and/or developing mixed-use projects?

Poll

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Mark Ryski
Noble Member
10 months ago

Proximity to consumers has always been a critical factor in store location, and mixed-use developments that tightly integrate services and retail will play an even larger role in the future. The Goodwill initiative is an excellent example of how planning and developing intentionally for mixed-use can be successful. Store location decisions are among the first, most important retailers make, and I see great opportunity for retailers to work closely with developers to plan and create mixed-use projects.

Nikki Baird
Active Member
10 months ago

This is interesting to me, because it does seem like there is more demand for mixed-use – the whole “15-minute city” thing, where people should be able to find work, services, leisure, and shopping all within basically a 15 minute walk from where they live. This is potentially a huge disruptor for retail, but the longer that city centers sit empty and WFH persists, the more that retailers of all stripes will feel the pressure to face structural changes to where they locate stores.

As for Goodwill, good for them! They’re putting their money behind their mission – and with the rise of resale, I think they’re pulling from a much wider (younger) demographic these days than just low income shoppers. If ever there was a moment for charity shops like Goodwill, this is it!

Dr. Stephen Needel
Active Member
Reply to  Nikki Baird
10 months ago

Nikki – this idea was the hot one for urban planning and environmental psychologists in the 1970s. It failed, and every time someone tries to revive it, it fails again. It still sounds like a great idea but nobody has ever made the whole concept work.

Peter Charness
Trusted Member
Reply to  Dr. Stephen Needel
10 months ago

as a positive for Portland OR…..we live in a “local neighborhood”. If we never wanted to get into a car, we can find everything we need within a 15 minute walk, groceries, medical, restaurants, and of course half a dozen coffee shops. The surround includes single family dwellings, apartments, and lower income housing. There are lots of little “city centers” like this in Portland, and I can’t imagine wy anyone would want to have to get into a car to get anything. Good for Goodwill to encourage this.

It does work…..

Lee Peterson
Member
10 months ago

This is the best, most human idea i’ve seen in a long time, and it makes perfect brand sense. Hopefully this really works and hopefully they get to San Francisco quick!

Perry Kramer
Member
10 months ago

Mixed use will continue to be an important driver as the Mall footprint in the US stabilizes at a supportable level. The drive to mixed use will also be driven by local governments who often provide incentives and sometimes require a certain mix in order to get new developments approved. These incentives can result in making what might be a break even location a profitable one.

Ken Morris
Trusted Member
10 months ago

The Goodwill mixed-use concept in Arlington is a win-win-win. New construction of affordable housing is, unfortunately, a tough sell in many cities, so the retail and childcare centers at street level make for a logical combo. Let’s hope this does well and Goodwill rolls out the concept on a wider scale. I see this mixed-use approach as a growing trend and like the way Goodwill is thinking outside the box once again. They really care about the community they serve and their innovation in mixed-use real estate and technology with their eCommerce offerings demonstrates that commitment. 

Jeff Sward
Noble Member
10 months ago

It’s actually kind of amazing that mixed-use development has taken so long to get traction in the USA. I lived in China for a while not long ago and was quickly impressed by malls, and especially grocery stores, on the ground floor of apartment complexes. Given the population density, it was an obvious no-brainer. Mixed-use development is in its infancy. We can look forward to lots of creative ideas for both existing and new development in the future.

Gary Sankary
Noble Member
10 months ago

The demand for walkable neighborhoods is very strong. Residents like them; they are good for a city’s tax base, and they are good fo the environment. Mixed-use developments, both existing and new, are, by definition, how these neighborhoods are designed.

Allison McCabe
Active Member
10 months ago

Walking the walk. So many positives from both business and social perspectives. Goodwill will win big as will the greater human community which Goodwill continues to serve so well. While not all retail businesses have such a clear path, retailers would be well served to determine the potential benefits of mixed use developments as store footprints and consumer habits continue to evolve. Real estate has often been part of the mix of storied retailers. This could be an element of a new way forward.

Gene Detroyer
Noble Member
10 months ago

How about Whole Foods, two banks, other retailers, an elementary school, a high school, and 40 floors of apartments? I live in Manhattan, of course, and that building is down the block. Every apartment building offers one or two floors of retail/office space. This kind of development is normal for a city. The positive is that it adds vitality to the neighborhood. The city has encouraged thousands of housing units in the Financial Districts, historically a ghost town, at night and on the weekends.

In China, every shopping mall has business and residential floors above it. In the NY Metro area, a developer specializes in building complexes near
commuter rail stations. Their target residence is the millennial who wants to avoid owning a car. Their complexes include everything a resident would need.

While I don’t see retailers often involved in the development of mixed-use, they play a vital role in being part of this way of living.

Joan Treistman
Joan Treistman
Member
10 months ago

I’ll agree with all of the positive comments made thus far. And I’ll add the need for disabled individuals to have living space in mixed-use developments. My daughter can’t walk, is wheelchair bound, can’t drive and would be so much happier and independent with shopping adjacent to or in her apartment building.

Nicola Kinsella
Active Member
10 months ago

As someone who lived in a mixed use complex many years ago, I see so many advantages. It provides convenience. Reduces price pressure (because people are willing to pay a premium for something that is super convenient). Allows older people and those with disabilities (assuming accessible facilities) to maintain their independence and autonomy. And fosters a sense of community because you’re always bumping into the same people in your local stores. Love it.

Rachelle King
Rachelle King
Active Member
10 months ago

Finally, an emerging solution to ghosted real estate with defunct stores lapping up decent property. Smart move to integrate the one need we will always have, housing; with the one thing we will always want, accessible shopping. This is not a new concept in large cities like New York and Chicago but it’s good to see expansion with a purpose like Goodwill’s.

Mohamed Amer, PhD
Mohamed Amer, PhD
Active Member
10 months ago

Convenience and community creation are incredible results of well-thought-out mix-use retail and housing projects. The case of Goodwill aligns with its mission and philosophy and will become a model for others to emulate.