The FORT Podcast: Developing Generational Mixed Use “Fortresses” – Mark Toro – CVO @ Toro Development Co.
Mark Toro is Chairman of the Board at North American Properties, a leader in mixed-use development known for creating vibrant, integrated communities that combine residential, retail, office, and hospitality components. With a career spanning several decades, Toro has been instrumental in redefining suburban retail by emphasizing experiential environments that attract affluent, discerning consumers. His approach balances social impact with financial performance, focusing on one-of-a-kind developments rather than scaling rapidly.
Chris Powers and Mark discuss the evolution of retail and real estate development post-recession, examining the shift toward mixed-use “fortress” properties anchored by experience-driven retail and lifestyle amenities. They delve into the critical factors for success, including demographic targeting, tenant curation, and seamless integration of diverse property types. Mark also shares operational insights into patio design, tenant relationships, and unique management models that drive community vitality.
They also cover:
- The demographic and site selection criteria essential for high-performing mixed-use developments
- Strategies for attracting and supporting tenant-operator partnerships in retail and food & beverage
- The role of outdoor spaces and curated experiences in enhancing property value and tenant success
- Challenges in scaling complex mixed-use projects while maintaining quality and uniqueness
- The symbolic traditions that foster team cohesion and project momentum throughout development phases
Listen on:
Spotify
Apple Podcasts
YouTube
Topics
(00:00:00) – Intro
(00:03:43) – Mark’s career and background
(00:08:03) – The gutted middle in retail
(00:09:38) – Site selection criteria for a “fortress”
(00:18:45) – Seamless Integration
(00:26:27) – The art of pitching tenants
(00:31:42) – Mark’s approach to “opening” dates
(00:33:28) – Betting the farm on Tenants
(00:35:46) – Office
(00:40:18) – Parking strategies
(00:41:51) – Hospitality vs. Real Estate
(00:42:23) – Being Disney-esque
(00:49:22) – Low-hanging fruit that properties can implement today
(00:54:17) – Marketing Funds
(00:57:55) – Equity partners
(00:58:56) – Why isn’t this model scalable?
(01:04:10) – How much more profitable can a fortress be than other mixed-use areas
(01:07:12) – Eric Weatherholtz & extending patio season
(01:10:49) – The Tequila story
Episode Summary
Mark Toro, Chairman of the Board at North American Properties, joined Chris Powers on the podcast to discuss his extensive experience in mixed-use developments, notably his work on projects like Avalon. Mark shared insights into the evolution of his career, starting from developing power centers before transitioning into mixed-use spaces during and after the global financial crisis. His approach focuses on creating integrated, vibrant communities that align with changing retail and consumer trends.
The conversation highlighted Mark’s analysis of retail trends that influenced his shift in strategy. He referenced industry forecasts that predicted the decline of middle-tier retail spaces such as regional malls and department stores, driven largely by e-commerce growth. Mark explained that post-recession, there was a surge in demand for experiential retail and mixed-use developments that blend apartments, office space, and hospitality with retail. His team identified factors critical for success, focusing on affluent suburban communities with high disposable incomes.
Mark emphasized the importance of location and demographic analysis when selecting sites for mixed-use developments. He noted the rarity of “fortress” properties: those that dominate their market by virtue of strong integration, curated retail tenants, and lifestyle offerings. He cited projects like Avalon, Santana Row, and Legacy West as exemplary mixed-use properties that have met or exceeded performance expectations through a combination of well-planned retail, office, residential, and hospitality components.
The podcast also explored the strategic leasing approach Mark and his team use to attract tenants. They prioritize high-quality retailers and restaurateurs who resonate with the target demographic. Mark shared examples of committing to local, up-and-coming restaurateurs with deep passion and operational expertise, acknowledging the significant investment required in tenant build-out and the importance of tenant-operator alignment to create a unique experience.
One operational detail Mark stressed was the critical role of outdoor spaces, especially patios, in driving tenant success and customer engagement. He has ongoing effort to perfecting patio design and amenities, such as heating, cooling, shading, and energy-efficient features. The outdoor experience is a crucial element for restaurateurs, impacting not only customer comfort but also profitability and foot traffic, which in turn supports the overall vitality of the property.
Discussion about managing these complex mixed-use developments revealed the need for seamless integration across various asset types. Mark described a hospitality-focused management model that goes well beyond traditional property management. This includes dedicated teams for marketing, maintenance, guest services, and events. Part of the model includes charging experience fees to certain uses like multifamily and office tenants, recognizing that the value of the curated retail and amenities boosts their rents and overall returns.
Mark acknowledged the challenges in scaling this type of development, pointing out that the nuanced coordination required for “one of a kind” projects makes replicating them at scale difficult. Developers who have succeeded at multiple flagship mixed-use properties, such as Federal Realty or Caruso, are few, and Mark’s own approach is to focus on creating a limited number of high-impact projects rather than expanding broadly.
The episode also touched on some cultural and symbolic practices the team uses to build project momentum, such as the tradition of celebrating with a bottle of Herradura Añejo tequila at groundbreaking and milestone events. This tradition, adopted consistently across projects, serves as a symbolic gesture underscoring commitment and team cohesion.
Mark Toro’s insights underscore the importance of adapting development strategies to new consumer behaviors and market dynamics, emphasizing experiential retail, demographic-driven site selection, and integrated, hospitality-oriented management models. His experience offers concrete lessons for real estate professionals aiming to create sustainable, vibrant mixed-use communities that deliver both social and financial value.
The FORT is produced by Johnny Podcasts