Auto retailing is in the midst of a construction boom fueled by favorable cash flow, upgrades after ownership changes and the pent-up demand for facility updates to keep up with customers and serve them efficiently. To review current construction and design trends, we talked with Joe Pella, head of National Commercial Real Estate at Truist, Jason W. Smith, head of Dealer Commercial Services at Truist, and Ryan Stancill, Principal at architecture and multidisciplinary design firm PRAXIS3. How has the rise of mixed-use development in major metro markets affected the way dealers approach the best use of their property? Smith: As urban sprawl extends to dealerships that were once on the outskirts, developers have started approaching dealers about their valuable real estate. Dealers often sit on large, contiguous pieces of land in densely populated areas. With vehicle inventory projected to remain at lower levels, this opens dealership space for redevelopment. For dealers with the population density and location attractiveness to support it, why not monetize the excess land and bring in more retail traffic, integrating the dealership into the community at the same time? Rethinking how much land you need and how that land can be used can point you to opportunities to unlock additional value, whether you develop the property yourself, partner with a developer, or sell a portion of your land. Stancill: We’re seeing a lot of mixed-use projects being discussed, and it’s often the municipality pushing dealers in that direction. We’ve studied several projects where a mixed-use component was a requirement for project approval. Mixed-use developments can bring resources and amenities closer together to create a more sustainable and walkable community. With these developments, dealerships can maintain a central presence in the community while blending residential, retail and commercial uses to fit site and local market needs. Also, if you want to put valuable land to its best and highest use, you might consider vertical development along with mixed-use instead of a freestanding, dealeronly facility. Pella: Given the increased density of their surrounding areas, dealerships can remake how they utilize their existing footprint by consolidating their dealer operations and creating available land to build commercial real estate. They’re sited next to existing infrastructure with roads, utilities and, in many cases, public transportation. As a dealer, you’ve got the opportunity to think about how your dealership can become part of today’s lifestyle while tying into the surrounding community. Consider experiential retail: people shopping, sitting outside, having a meal, enjoying live music — a place where things are happening. Experiential retail recognizes that the most successful mixed-use developments are fully activated spaces that provide a variety of amenities. Smith: As land gets more valuable and density becomes a requirement, Manhattan may be the place to look for models of what dealerships can look like. BRAM Group’s Toyota and Lexus of Manhattan have a high-rise presence with new cars on the fourth floor, used cars on the roof and a second lot in New Jersey to hold additional inventory. On the West Coast, Toyota of Hollywood has partnered with Houston-based Hines and announced its plans for a mixed-use project, including a high-rise residential tower, a residential village, an office building and a public plaza with green space along with retail and dining. Dealership Facility DESIGN ADAPTS TO SHIFTS IN AUTO RETAILING By Jason W. Smith, Head of Truist Dealer Services, and Joe Pella, head of National Commercial Real Estate at Truist. Written in partnership with Ryan Stancill, Principal at Praxis3 Architecture Design Firm. WVADA News 24
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