POWERS Podcast Episode #388

Guest: Mark Toro (CVO, Toro Development Co.)
Host: Chris Powers
Title: Developing Generational Mixed Use “Fortresses”
Date: June 17, 2025

Episode Overview

In this episode, Chris Powers has a wide-ranging, deep-dive conversation with Mark Toro, Chief Vision Officer of Toro Development Co., about building world-class, generational mixed-use developments—or "fortresses." Toro unpacks the unique challenges of creating experience-driven, highly integrated communities, shares lessons from decades in the industry, and details why these mixed-use “one of one” projects are so difficult and valuable. The discussion is packed with timeless principles spanning site selection, placemaking, the “software” of real estate, tenant curation, office leasing transformations, and the importance of community engagement.

Main Discussion Points & Insights

1. Origin Story: From Power Centers to Placemaking

[03:40–08:00]

• Pivot during the Great Financial Crisis:
  • Mark Toro recounts having to "sit on the couch" during the GFC, pondering the future of retail and real estate.
  • Inspirations came from books—Retail Revival, The Great Reset, and The Experience Economy. These forecasted the death of "middle" retail, the rise of experience-based consumer spending, and a new renter class.

“It was no longer about collecting rents, sweeping the parking lot, and maximizing NOI...we became more about service and hospitality than about real estate.”
— Mark Toro [07:22]

• Atlantic Station as Incubator:
  • Turned around a near-dead Atlanta mixed-use asset using service and hospitality, focusing on “soft skills” instead of large CapEx.
  • "We replaced all of the software and none of the hardware, didn't lay a single brick, but bought it for $74 million, put $26 in it, sold it for $200." [07:26]

2. Why the "Middle" Died and the Fortress Emerged

[08:00–09:55]

• The regional mall segment (e.g., Sears, department stores) was gutted—too little experience/entertainment, threatened by E-commerce.
• Only two ends of the spectrum thrive: "most animated" (Apple Store) and "most automated" (Walmart).

3. Blueprint for Building a Fortress: Site, Demographics, & Scale

[09:55–18:54]

• Location and Demographics are Non-Negotiable:

  • "The location is the only place to start. And it's all about demographics." [09:55]
  • Looks for very high income, high-density suburbs (example: $200k average HH income at Johns Creek, Atlanta).
  • Cites the short list of comparable projects nationally (Avalon, Santana Row, Domain Northside, etc.).

• Scale & Entitlement Challenges:

  • Mixed-use deals require significant tract size (e.g., 40–80+ acres), zoning flexibility, and municipality buy-in—difficult in areas used to traditional suburban formats.

"Our entire mantra is get them out of their car and get them on the street on foot. And that is the magic of this model..."
— Mark Toro [12:45]

• Investment Complexity:
  • Each use (retail, office, residential, hotel, SFH) must pencil individually AND holistically.
  • Projects are often at risk—Medley lost its institutional investor a week before closing; capital had to be “restacked.” [17:40]

4. The Secret Sauce: Seamless, Multilayered Integration

[18:54–25:43]

• Not Just "Multi-Use":
  • True fortress projects are “vertically integrated mixed use.” Retail below, office/hotel/residential above, and everything interwoven operationally, financially, and socially.
  • All users (except retail) pay an “experience fee” that funds community engagement, events, and amenities.
  • Five pillars of integration: Physical, financial, operational, social, and now, technological (e.g., seamless WiFi from apartment to plaza at Medley) [23:09].

"That's the difference...seamless integration vertically, residential office, hotel over retail...financial integration...operational integration...social integration...technological integration."
— Mark Toro [20:23]

• Unified Branding:
  • Every asset feels like part of a singular place.
  • Lessons learned: At Avalon, not front-loading F&B on the plaza was a mistake corrected at Medley. [24:56]

5. Curating Tenants & “Betting on the Jockeys”

[26:11–35:53]

• Traction Starts with Demographics:

  • Lead with proof of high-income consumer base.
  • Early tenants ("first-movers") are critical; often chef-driven, local restaurants or best-in-class service providers.

• Bet the Farm:

  • Large TI packages ($200–$250/sq ft), sometimes exceeding historical norms, require trusting the operator as much as the concept.
  • “We're essentially putting them in business and then promoting them like crazy through events and social media and PR and all that and build a crescendo up to opening day.”
    — [31:29]

• Opening Day as D-Day:

  • Once date is chosen, countdown clocks are set. “You don't ever miss the date. I don't care if it rains, snow, sleet, or hail, you are going to hit that date.” [32:20]

6. Office Leasing: A Surprising Strength in Fortress Projects

[35:51–41:29]

• Despite office headwinds, fortress-style communities can attract premium tenants because returning to experience-rich, vibrant environments helps recruit/retain talent and gets workers back in person.

"He recognized his brain trust is his largest investment and he needs to get them in the office or at least have them in a workplace...not acceptable to step outside into a sea of asphalt."
— Mark Toro [39:17]

• Office leasing in these developments can outpace the market (e.g. Avalon leased its office during construction).

7. The Hospitality Layer: Secret Sauce “Software”

[41:29–45:36]

• Real Estate Company + Hospitality Company:

  • The owner hires a management company (like North American Properties at Avalon) to deliver hospitality and experience, not standard property management.
  • Hospitality DNA is a must; former mall GMs failed in this environment.
  • All employees, from concierges to housekeepers, receive hospitality training (e.g., Ritz Carlton Leadership Center). [42:57]

• Management Fee vs. Performance:

  • Management fee is structured with G&A, but many costs are directly funded by the project itself.
  • The complexity—akin to running a hotel or Disney property—makes seamless, authentic experience delivery a “labor of love.”

“It's almost like being at Disneyland a little bit...it doesn't feel goofy or forced, but it's just like this ongoing, natural, kind of always-on energy.”
— Chris Powers [44:49]

8. Behind the Scenes: Disney-Esque Execution

[45:36–49:14]

• Obsessive attention to cleanliness, maintenance, and atmosphere—music, events, hospitality staff, etc.
• Avalon learned from best-in-class mentors (e.g., Tom Miles from The Grove/Santana Row): immersive, coordinated attention to detail, visible and invisible.

9. Low-Hanging Fruit for Other Owners

[49:14–54:13]

• “First thing to do is keep it clean.” — [49:52]
• Second: Partner with tenants to create community, human connection, and memorable moments—even with limited budgets.
• Physical and social “soft skills” can elevate even a simple strip center.

“Our stock in trade is human energy. That's not something you say in the boardroom...unless and until you can monetize it.”
— Mark Toro [52:23]

• Mixed-use as a “generational investment” for long-term value creation, not merchant-build and flip.

10. The Experience Fee and Hotel Synergy

[54:13–57:58]

• Modern experience fee (not just traditional marketing fund) underwrites year-round events and hospitality programs for all users.
• Unique integration with on-site hotel/conference centers allows unparalleled cross-promotion and revenue synergy (i.e., buyout of entire restaurants for corporate events).
• “If you're a resident...you call concierge and ask them to deliver a pitcher of margaritas from Super Rica, it'll show up at your door.” [54:31]

11. Capital Stack and Scalability

[57:58–64:10]

• Usually one developer and (ideally) one manager for the fortress; capital stack may be multi-layered but must be coordinated for the “whole.”

• Not easily scalable; each project is “fine art, not meatball surgery.”

• “I haven't seen a developer scale it...I don't think you're going to see...somebody do 10 of these.” [59:25]

• Unique blend of community interest, demographic criteria, land availability, and city cooperation creates high barrier to entry.

12. Why "Getting It Right" Pays Off

[64:10–67:16]

• Properly executed fortresses breed higher rents, strongest tenant demand, and premium valuation ("exceeded everyone's expectations, especially our own" [66:21]).
• Legacies built on tight curation, integrated programming, and constant improvement (e.g., patios, seasonal activation).

13. The Art of Patios: People Attract People

[67:21–70:47]

• “An amazing patio can change your whole life.” — Eric Weatherholtz, cited by Chris Powers [67:47]
• The design must encourage friction/excitement between guests, servers, and pedestrians—both in vibe and practical comfort (e.g., heating, umbrellas, activity year-round).

“The true test of a great patio is, are there people there? ...The thing that attracts people is people.” — Mark Toro [70:31]

Memorable Moments & Quotes

• Countdown Clock Discipline:
  “There's a countdown clock that goes down to the tenth of a second in my conference room...to the grand opening of Medley...and we won't miss it.”
  — Mark Toro [32:21]

• Seamless Integration:
  “We can't really scale this business significantly, but I don't know that we want to. It's a matter of creating really special, highly valuable fortress positions...”
  — Mark Toro [07:40]

• Patio Wisdom:
  “We are at least an hour to two hours a week talking about umbrellas, radiant heating, fans, outdoor semi-conditioned space...The true test of a great patio is, are there people there?”
  — Mark Toro [68:11, 70:47]

• Tequila Groundbreaking Tradition:
  “Every time we build a project, everyone does a shot of El Herradura tequila as a blessing...I don't know if it's karma, but that’s the genesis of our success.”
  — Mark Toro [71:02]

• Human Energy as Currency:
  “Our stock in trade is human energy...that's what, you know, the institutional community now sees as another kind of fortress.”
  — Mark Toro [52:23]

Key Timestamps

• 03:40 — Mark Toro’s path from power centers to mixed-use fortresses
• 07:26 — Atlantic Station turnaround: “software over hardware”
• 09:55 — Site selection and the demographic imperative
• 18:54 — What true "seamless integration" means
• 24:56 — Lessons learned from past projects: Plaza activation & brand unity
• 26:11 — Winning tenants: Demographics-first, art and science of recruitment
• 32:01 — Opening day discipline; countdown clocks
• 35:51 — Office leasing in fortress projects
• 41:29 — Distinction between traditional management and hospitality-focused operations
• 45:36 — Disney methods: cleanliness, experience layering, music, and more
• 49:52 — Low hanging fruit: cleanliness and community building
• 54:31 — Experience fees and hotel synergies at Medley/Avalon
• 59:25 — Why fortress development can't be scaled
• 66:21 — Economic upside: surpassing all expectations
• 67:47 — The perfect patio (and people as people-magnets)
• 71:02 — The tequila bottle groundbreaking tradition

Conclusion

Mark Toro and Chris Powers deliver a comprehensive masterclass in what it takes to create “fortress” mixed-use developments that transcend traditional real estate. It’s about human energy, seamless integration, and a relentless pursuit of experience. This conversation is a blueprint for any developer seeking to move from the transactional to the transformational—and a reminder that the “software” of a place can prove just as valuable as the bricks.