By Alexa Epitropoulos | aepitropoulo[email protected]
Two executives spearheading commercial real estate company Asana Partners’ acquisition of 21 Old Town storefronts offered more insight into their strategy for the properties at the Alexandria Chamber’s annual meeting on Tuesday.
Asana Director of Development Reed Kracke and Director of Merchandising & Leasing Kate Grissom talked about a range of issues during a panel moderated by Avison Young Principal Nick Gregorios. The discussion formed the keynote portion of the meeting.
The path that brought Asana, based in Charlotte, North Carolina, to Alexandria runs through the retail development firm Edens. The three executives that founded Asana in January 2016 — Terry Brown, Jason Tompkins and Sam Judd – all previously worked for Edens when that firm began work on redeveloping the site of the former Giant in North Old Town. Kracke was also a part of Edens at that time before joining Asana.
In his capacity at Edens, he worked on the North Old Town project for three years. Though he now lives in Charlotte, he formerly lived in the D.C. area for 11 years.
“I got to know Old Town,” Kracke said. “I learned what was going on here.”
As Asana closed on $500 million in equity commitments in 2016, Old Town’s potential was always in the back of Kracke’s mind. The Old Town environment fits into Asana’s strategy, Kracke said, which focuses on acquiring existing buildings rather than building something from the ground up.
In particular, Asana’s leaders were drawn to Old Town because its profile was already established in the region and beyond.
“It already has a critical mass. We didn’t have to create that,” Kracke said. “The purchasing power and the consumer base are already there. The number of people who don’t know Old Town is low … We’re dealing with a known commodity.”
With that in mind, Asana subsequently began buying Old Town storefronts last December. In the 12 months since, the firm has acquired 21 properties. Kracke said his company can provide Old Town with resources that many individual building owners don’t have. He said, in particular, the company has the capital to invest in properties, as well as a regional presence that can help when recruiting new retailers as tenants. Asana has made investments in 11 major markets thus far, among them Charlotte, Dallas, Texas and Atlanta, Georgia.
Grissom said Asana is looking to provide a pathway for retailers who have been looking to enter the Old Town market.
“Alexandria already has great local retailers,” Grissom said. “Some specialty retailers have said they wanted to be [in Old Town], but couldn’t.”
Specifically, Grissom brought up Madewell, a store that specializes in denim, accessories and shoes, as one of those would-be Old Town retailers who haven’t been able to enter the market.
“We think there are deals that have been lost that could add value,” Grissom said.
Grissom said Old Town faces unique challenges in comparison to other markets Asana has entered, including the age of its buildings and its relatively low vacancy rate.
“The best and worst thing about King Street is its old buildings,” Grissom said, explaining
that many retailers are looking for a mall-like format in areas where it’s simply not possible to provide that.
“That’s not something you can create,” Grissom said.
Grissom caveated, though, that the tide is shifting and that certain retailers, including Warby Parker and J. Crew, are starting to realize the need to go into markets that can’t provide mall-like spaces.
Kracke said there’s also potential for Old Town to recruit retailers who have, in the past, overlooked investing in Alexandria in favor of other markets in the D.C. metro area.
He brought up the example of outdoor clothing retailer Patagonia, which he said Asana had talked to about the possibility of moving its Georgetown location to Old Town.
“There are retailers who haven’t understood or haven’t had access to owners who can answer the question ‘why Old Town?’” Kracke said.
Kracke said Old Town has all the elements retailers are looking for, but that the potential could be explained more effectively.
“There are things about Old Town that need to be articulated a little more,” Kracke said. “There’s a story to tell there.”
Kracke and Grissom also said there’s a strategy to be tapped into surrounding attracting millennials to – and keeping them in – Old Town.
“Young people are moving to Old Town. Many are spending their weekends in D.C. There’s
a reason why there’s a water taxi,” Kracke said. “We want to keep people here. We want to have an ‘18 hour a day environment.’” Grissom said part of Asana’s strategy is to push the momentum from the waterfront to upper King Street. She used the example of Sweetgreen in the 800 block of King Street as an example of a business drawing millennial clientele. She said she’d like to see Asana build that momentum up to the 1100
block of King Street.
“We want to create something that makes you want to stay,” Grissom said. “We want to ask the question ‘what’s going to keep you coming back?’” “You’ll really see it grow in the next five years. Old Town already has the character and the charm. It’s just how to get young people to realize this is the place for them,” Grissom said.