Phantom Of The Mall
For 3rd Works, being behind the scenes is the best possible way to create the best possible project.
Randall Shearin

All senior 3rd Works managers boast flagship project experience, from San Diego’s Horton Plaza and Cleveland’s Legacy Village, to the recently opened Pier at Caesars destination retail project in Atlantic City, New Jersey, shown above.

Though you may have seen its bright orange logo at industry events, 3rd Works is one company in the shopping center industry focused on keeping a silent profile. The company counts among its clients some of the largest developers in the business — General Growth Properties, Forest City Enterprises and Forum Development, among the 40-plus developers it works with, many on a repeat basis. Founded in 2000, 3rd Works is a company that specializes in tenant coordination, but offers a host of retail development services to clients.

Seamlessly integrating its services with its clients’ projects and teams has made 3rd Works a success, but it wasn’t always an easy road for the company. Initially founded under another name by R. Scott Aishton in 1991, in the midst of a down cycle for real estate, Aishton originally focused on local retail development projects, having made his name as the principal architect for Ernie Hahn on San Diego’s award-winning Horton Plaza. The company’s big break came in 1994, when Lend Lease hired it to work on the $110 million renovation and expansion of San Diego’s Fashion Valley. Aishton, former West Coast head of Canada-based Pan Pacific Development, brought on two financial partners in 2000, and changed the name of the company to 3rd Works.

Shopping Center Business recently spoke with 3rd Works’ President Aishton from the firm’s San Diego headquarters, as well as Vice President and Co-founding Manager Gregory R. Gunter from Denver; Tampa-based Vice President Kenneth A. Adams; and Senior Vice President Bradley N. Sanders from the firm’s Cleveland office. New San Diego Vice President Brad Clark was traveling and unavailable.

Many of the nation’s premier retailers, from Harry Winston to Carolina Herrera, are opened each year by 3rd Works field teams, as with its 2004 work with Simon Property Group on Las Vegas’ Forum Shops expansion.

After changing its name in 2000, when Gunter joined the firm, 3rd Works began to focus more nationally than regionally.

“The outreach was a combination of taking advantage of business relationships that both Greg and I had in the industry at the time and looking at a trend towards outsourcing that was just developing,” says Aishton. “To our surprise, there were a lot of large companies that had the skills that we offered, but still had the demand to augment their staffs since their development growth was so large.”

In 2002, Brad Sanders merged his Cleveland-based firm with 3rd Works, providing an Ohio base for regional and east coast projects, and laid the groundwork for the firm’s subsequent rapid expansion. Now, with four regional offices nationwide, the company provides region-specific management and offers their field personnel opportunities to work on projects within a reasonable boundary of their home base. It allows these employees to have a personal life, as well as a rewarding career, since many of them live their work week on-site for over half the year.

The services 3rd Works provide vary from client to client. Each developer has its own perspective on how to best take advantage of outsourced services. 3rd Works offers everything from site acquisition and entitlement, to design and construction management, all the way through tenant coordination and field services. It stresses with clients, however, that its greatest value is in joining a development team during pre-construction, when the company can draw on its pooled knowledge of opening over 1,500 tenants annually, assisting a project’s leasing team with tenants’ construction-exhibit negotiation.

The Mercato, a New Urbanism project in Naples, Florida, anchored by Whole Foods, is one example of 3rd Works’ management of a project’s full scope, from predevelopment and project management through tenant coordination.

“Depending upon the need of the client, we’re very particular about focusing our services to reflect their needs,” says Aishton. “Equally important is the challenge we face in recognizing that we are playing a role that embeds our team into the culture of our clients’ organizations in a stronger manner than other consultants.”

As such, the right team from 3rd Works must be assigned to the right project. The firm stresses its team chemistry as a key point distinguishing it from other firms — all but the newest of 3rd Works’ field personnel have worked together on multiple projects, all having been trained specifically in the firm’s reporting structures and proprietary project management tools. Rather than brokering independent contract agents, 3rd Works’ clients receive an entire team, both in the field and behind the scenes. Client service coordinators from each regional office provide long distance support, as does the firm’s IT department. And, as Gunter notes, the firm specializes only in retail, a development niche it not only knows best, but also favors.

To assist clients further, when on-site for tenant build-out, 3rd Works employees take on the persona of the developer. Business cards and letterhead reflect that of the developer’s project name, and the employees project themselves as an extension of the client.

“When our employees are dealing with tenants on behalf of a client, they are not dealing with them as 3rd Works, they are dealing with them as Forest City, Westfield, Poag & McEwen, or whoever the client may be,” says Gunter. “We’ve found that our clients prefer the continuity it provides the tenants while engendering a cohesive project team.”

3rd Works’ founding managers Gregory R. Gunter, far left, and President R. Scott Aishton, center left, are joined by Cleveland Sr. Vice President Bradley N. Sanders and Tampa Vice President Kenneth A. Adams.

At any given time, 70 to 80 people are working on projects for clients around the country. The company historically has upwards of 12 projects going during the course of a year, although its current project count is double that. The company’s busiest time is leading up to fall, when most grand openings happen. Usually, the company is less busy in November and December, and can schedule work for the coming year.

Among the retail development industry, project management and tenant coordination roles are challenging to fill, due partly to the migratory nature of the work. It is hard for developers to find employees who want to move every time a project is finished and a new one is started. Secondary to retail development experience, 3rd Works looks for people who enjoy the challenge of an annual new project and enjoy a cross-country lifestyle.

Vertical mixed-use retail projects comprise 3rd Works’ largest growth sector, with projects like Summerlin, Nevada’s Village at Queensridge, Atlanta’s Buckhead Avenues, and Baton Rouge, Louisiana’s Perkins Rowe, shown here.

“We are very cognizant of the need to accommodate the personal lives of our field personnel because they have a challenging environment as projects get toward that grand opening date,” says Aishton. “We devote a fair amount of time to training everyone within our group to utilize the management tools and systems that we have in place so that we streamline the mundane and the mechanical to allow our people more time to communicate with our clients and the tenants.”

The company currently has a little over 10 million square feet of projects under construction through its four offices. Although vertical centers and mixed-use projects represent the largest growth sector among its projects, the company provides services on everything from regional mall redevelopments and expansions, mixed-use and town center projects to new lifestyle centers.

“For our public clients, the advantage is that we become a project expense and not a corporate overhead,” says Aishton. “The skill sets that are necessary in project management and tenant coordination are far more sophisticated than they were as little as 5 years ago. The transactional relationship between the tenants and the landlords is a complicated process that creates a level of conscientiousness and professionalism that, by necessity, has evolved substantially. Because of that, it makes it difficult for developers — unless they have a lot of work in their pipeline — to sustain the kind of talent necessary for those skillsets.”

For 3rd Works, one of the rewards of working for so many different clients is that the company is working on some of the most cutting edge retail projects in the country.

“By dealing with a variety of clients, we are constantly learning how to better the ways in which we tackle assignments,” says Aishton. “After every project, we bring to the next one a much broader spectrum of experience and exposure.”

Forest City’s “green initiative” for Denver’s Northfield Stapleton included LEED-certified parameters for retail tenants, which were enforced by 3rd Works’ field team for the project’s 2006 grand opening.

3rd Works has been involved in every Poag & McEwen Lifestyle Centers project since 2000. The company was first hired by Poag & McEwen to handle project management and tenant coordination for Aspen Grove, a Littleton, Colorado, lifestyle center co-developed with Developers Diversified Realty. Since 2000, 3rd Works has gone on to complete five other projects for Poag & McEwen. In fall 2006, 3rd Works opened two Poag & McEwen projects, in Allentown, Pennsylvania, and in Corona, California. The combined 180 tenants at the two projects all opened within 2 weeks of each other.

“It’s been an evolutionary relationship for us because both 3rd Works and Poag & McEwen experienced a tremendous amount of growth and industry-wide recognition during the last 7 years,” says Sanders, whose Cleveland office managed the Allentown project. “We’ve learned from them and had the opportunity to contribute to their process and product.”

3rd Works also enjoys longstanding client relationships with repeat clients like Forest City Enterprises and Simon Property Group. Simon invites 3rd Works to participate on a lot of high-end projects, including the most recent expansion of The Forum Shops in Las Vegas and this year’s opening of The Domain in Austin, Texas. 3rd Works is currently providing field tenant coordination for Atlanta’s Lenox Square expansion. While not as large as an entire ground-up development project, it is broadening 3rd Works’ experience with premier tenants and flagship stores. The Lenox Square expansion, for instance, involves three new European retailers and a flagship, three-story Polo Ralph Lauren store, while the Forum Shops expansion introduced rare storefront presentations for top-drawer retailers like Harry Winston and Carolina Herrera. Because 3rd Works staffers boast broad exposure to a variety of tenants — from P.F. Chang’s to a unique Todd English restaurant — they enjoy the advantage of consulting each other on historical tenant deals.

“We’ve had the chance to work with a lot of high-end tenants that most developers don’t get a chance to open,” says Gunter. “We’ve had enough experience with these specialty tenants to know what their demands and wishes might be, and how to efficiently provide them what they need. Our developer clients appreciate that we can draw upon our relationships with the retailers, their architects and contractors, to better serve them.”

Because of its work with so many clients, on so many different projects, 3rd Works is able to see a lot of trends on the horizon for developers and retailers.

“Tenants are getting more sophisticated,” says Sanders. “We see that in-line retailers are taking lessons from big box retailers by insisting that the landlord use the tenant’s lease. Overall, retailers now are holding the landlords much more accountable to deliver exactly what they promised.”

When putting together employees for a hybrid or mixed-use project, 3rd Works puts in place a team with targeted expertise. For Forest City’s recently opened Northfield Stapleton main street project in Denver, a 3rd Works project manager experienced with big-box retailers managed that specific portion of the project’s scope while another 3rd Works team specializing in in-line tenant coordination handled the main street retailers. 3rd Works also has a number of staffers whose specialty is restaurants, a service that is more and more in demand these days.

“3rd Works credits our name to sociologist Ray Oldenburg,” says Gunter. “Oldenburg talked about the ‘third place in society’ — after home and work—where people like to meet and mingle in an informal environment, like the coffee shop, the pub or the park. 3rd Works is dedicated to helping create those ‘third places’ and making them the best they can be for our developer clients.”