When a new real estate project is in development, there are a ton of moving parts: architects, strategists, analysts, brokers, design firms, planners. Bruce Leonard pulled all of these moving parts together in Streetsense, a strategy and design collective with a focus on brands and places.
Leonard is a managing principal for architecture and planning at Streetsense. The collective employs 200 people from various backgrounds and expertise. Together the company builds brands and places where consumers want to be. In addition to new developments and corridors, Streetsense also revitalizes brands and failing real estate with its data-driven approach.
“I would say almost 50 percent of the work I’m working on right now is failing real estate, where you need to come up with a strategy to reposition it in the market and stabilize it,” said Leonard. “It’s not just the design problem today, it’s not just a leasing problem today. You really have to look at it comprehensively.”
These properties come with a variety of reasons they could be failing, which is what Streetsense examines. Think of a brand losing touch with the market and needed to reengage, tired real estate that needs to be upgraded. Leonard said part of the process is understanding the market, how a brand fits in to the competitive landscape, and how a piece of real estate is perceived or will be perceived. “Real estate is about experience,” he said.
Leonard and Streetsense build these experiences and keep themselves relevant by differentiating themselves from other development groups and changing the way tenants are chosen to fill projects.
“What we have on staff are retail strategists. The reason why that works in today’s market is that a lot of the projects we work on, retail is a small part of the NOI. There’s this pressure to really get the transaction done and get tenants in place,” he said. “The problem you have in mixed use is often you need a location. It’s often not just about getting the deal done, it’s about getting the right deal done.”
That’s where the retail consulting comes in. Streetsense is able to plug in an experienced retail strategist and a broker that’s not facing the pressure of a commission. The broker can take time and do the right deal. Leonard said moving brokers away from a commission-based model to salary will get better tenants.
“Always retail has had this human component to it, it’s really based in psychology and how people perceive places. Often it’s an unconscious perception—they’re really not analyzing why we like an environment,” said Leonard. “Today it’s all about specificity and context. Every project we work on today is totally unique and requires a different sense of sensibilities given the market. We’re definitely in an era of place and location and you really have to pay attention to that if you want to be successful.”
What else makes for a successful developer? Experience. There are no child prodigies in real estate, and Leonard has been in the business for 25 years. “It’s all about risk management and you only gain that by being on a project, having it go south on you, and lessons learned from that,” he said. The longer you’re in the industry, the more you’ve seen and the more you can anticipate. “I think the challenge today is the pace of change.”