FEATURE ARTICLE, MAY 2004

Casto’s New Mixed-Use Concentration
Casto Southeast branches out with a new name and a new focus.
Randall Shearin and Jaime Lackey

Casto Southeast, an affiliate of the Columbus, Ohio-based Casto Organization, is charting a new course and will focus its energies and talents on the development of mixed-use lifestyle projects. The company has been renamed Casto Lifestyle Properties, effective May 1, to emphasize its new focus.

The decision to concentrate on lifestyle projects is the result of the company’s success with such projects over the last few years. An example of Casto Southeast’s success in lifestyle projects is its redevelopment of the 524,000-square-foot Winter Park Village in Winter Park, Florida.

Brett Hutchens President & CEO Casto Lifestyle Properties

Brett Hutchens, President and CEO of Sarasota, Florida-based Casto Lifestyle Properties (CLP) says the company has acquired a clear understanding of mixed-use projects and how to maximize the synergy of uses. In an effort to prepare for the completion of current projects as well as taking on new projects, Hutchens and Drew Smith, executive vice president, have expanded the company’s development and construction department to include personnel specializing in mixed uses including office and residential space.

CLP has also taken steps to expand its specialty retail leasing coverage by contracting with Strategic Retail Advisors (SRA) to merchandise and lease the specialty retail space in CLP projects. Hutchens explains, “Leasing to lifestyle tenants requires considerable experience and constant monitoring of the trends in the specialty retail tenant groups and we feel SRA, because of its narrow focus, is well equipped to perform this function for our company.”

Don Casto, chairman of the Casto Organization and CLP, says he is very excited about CLP and its opportunities. “Brett [Hutchens] and his team have shown us proven success in mixed-use lifestyle projects,” Casto says. “Our company is 75 years old and although we are careful in doing so, we have remained nimble enough to change course a few times in our history in order to take advantage of new opportunities and trends. CLP has the commitment from the entire Casto Organization.”

Currently, Casto Lifestyle Properties is developing the Whole Foods Market Centre in downtown Sarasota; Main Street at Lakewood Ranch, part of the 28,000-acre Lakewood Ranch master-planned development located in Sarasota and Manatee counties in Florida; and Lakeside Village in Lakeland, Florida.

In a public/private partnership with the city of Sarasota, Florida, Casto Lifestyle Properties is developing the Whole Foods Market Centre. It will include a 36,000-square-foot Whole Foods Market, 24,000 square feet of ancillary retail space and 95 luxury condominiums.

The Whole Foods Market Centre is anchored by a 36,000-square-foot Whole Foods Market that will open in October. It also includes 24,000 square feet of ancillary retail space and 95 luxury condominiums. The site will have a 684-space parking garage. “The project is literally one block of downtown Sarasota; it is very urban oriented,” Hutchens says.

Ninety-one of the 95 condominiums are sold, and the project just recently began to go vertical. According to Hutchens, 15 percent of the condos have been purchased for investment purposes. The rest have been purchased as primary or winter homes. The units range from 990-square-foot one-bedrooms to 7,700-square-foot penthouses, and prices range from $300,000 to $1.6 million. Michael Saunders & Company is the realtor.

Casto became involved in the downtown Sarasota site because it was working with Whole Foods to find a site in Sarasota. The retailer’s plans coincided with Sarasota’s master plan, which calls for a full-service grocery. As part of the development site is owned by the city, Casto Lifestyle Properties and the city of Sarasota formed a public/private partnership to develop the project.

Casto Lifestyle Properties is developing Main Street at Lakewood Ranch near Sarasota, Florida. The project will feature 120,000 square feet of retail space, 50,000 square feet of second floor office space and 55 condominiums.

Main Street at Lakewood Ranch is an interior site in a master-planned community near Sarasota. Within 1 mile of Casto Lifestyle Properties’ site — which broke ground March 10 — approximately 6,000 homes with an average household income of $95,000 have already been built and 1.7 million square feet of office is currently occupied. “We are having a very good leasing experience,” says Hutchens. CLP plans 120,000 square feet of upscale retail space, 50,000 square feet of second-floor office space and 55 condominiums. The site is slated for completion in July 2005. The master developer at Lakewood Ranch is Schroeder Manatee Ranch.

Rapid growth is forecast for the community. “At the end of 2007 there will be about 35,000 homes with an average of 2.8 people in each home. That is roughly 100,000 people at the end of 2007,” notes Hutchens.

In Lakeland, CLP is developing Lakeside Village, which will include 380,000 square feet of retail space, 80,000 square feet of office space and a hotel component. An 18-screen Cobb cinema, Belk, Kohl’s and Bed Bath & Beyond will anchor Lakeside Village. The project will be located on the south side of town — closer to the “higher demographic,” which will enable it to compete with the regional mall and retail offerings located on the north side of town, above Interstate 4.

Lakeland’s attractive demographics are related to business in the area: Publix and Discount Auto Parts have headquarters in Lakeland; Rooms-To-Go, Geico and Lockheed Martin each have a significant presence there.

“Lakeland is a different type of Florida community,” Hutchens explains. “There is more of a permanent population, less of a tourism population. And with its positioning directly between Tampa and Orlando, you find a lot of businesses that like to locate there.”

Casto Lifestyle Properties is also branching from its previous southeastern geographic limits. The company is currently considering a project in the Midwest, says Hutchens. “We’ve decided we are going to go outside the Southeast for the right project and if the project is large enough to warrant an overhead staff on a local basis then it wouldn’t make any difference to us. Our preference is still Southeast, but we certainly are prepared to go out to other regions of the country.”

The company is showing its strengths across the lifestyle spectrum — a greenfield site at Lakeside Village, a mixed-use project in a master-planned community in Lakewood Ranch, a downtown development in Sarasota and the redevelopment of an old mall in Winter Park, Florida.

Hutchens credits the Winter Park project for much of the company’s success. The Winter Park project was started in 1996 and was completed in early 2003. The 524,000-square-foot development includes 115,000 square feet of office space, 58 loft apartments and 350,000 square feet of retail space. Both office and retail are 100 percent leased. “We leased up the office at a much faster rate than we anticipated and even faster than the retail,” Hutchens comments. The company is now considering a further residential addition to the Winter Park site as well as acquiring additional adjacent property.

The company learned about mixed uses from the Winter Park development. “We learned at Winter Park that second-floor office does work in these mixed-use projects if you provide enough of an attractive base of amenities to make it convenient for workers on site in terms of restaurants and other entertainment activities and shopping,” Hutchens says. “And we’ve found the value creation is superior to a normal shopping center. It is a lot harder, a lot more complex, and it takes a lot longer, but I think these projects will have a longer life and usually the communities embrace them rather than fight them.”

Casto Lifestyle Properties is trying to meet the demand for more urbanized and mixed-use projects. “There are probably as many different definitions of lifestyle centers as there are developers. Our niche seems to be mixed-use,” Hutchens says.

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