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CAROLINA TRIANGLE AREA
As the construction of Interstate 540 encircles Raleigh, developers are discovering a retail gold mine along the new outer beltline. The current trend is to construct retail centers along the newly formed exits, which benefit from heavy traffic and new residential developments geared toward easy highway access. “The opening of I-540 has spurred a great deal of growth,” says Don Traflet, associate vice president of Anthony & Co. with offices in Raleigh and Durham. “We had some negative absorption, but tied fourth place in the nation for the most growth in the retail market in the country.” Raleigh’s vacancy rate is 6.5 percent, as opposed to 6.2 percent in the first quarter of 2007, and the city has the highest level of proposed space on the boards since 2000.
The Western Wake area of Cary and Morrisville is experiencing tremendous growth as I-540 extends through its corridor, which is undeniably the most active area in city’s retail market. Indianapolis-based Kite Realty is planning Parkside Town Commons, a 750,000-square-foot mixed-use development that will include big box retailers, as well as restaurants and entertainment venues in Cary. The project is slated for a spring 2009 opening.
In Morrisville, Casto Lifestyle Properties and 1st Carolina Properties will break ground this spring on Park West Village, a 1 million-square-foot, 95-acre mixed-use development featuring 750,000 square feet of retail space. Located at the intersection of Cary Pkwy. and Chapel Hill Rd., the project will be the only one of its size and scale in the local market. More than 20 retail tenants have signed leases for the project, tentatively scheduled for a fall 2009 opening.
Casto will also develop Renaissance Village, opening in Durham this summer. The retail and office development will feature 300,000 square feet, which includes a 30,000 expansion of the existing center. Casto has nailed down SuperTarget, HomeGoods, Michaels and Petco as tenants.
Atlanta-based Cypress Equities, retail and acquisition affiliate of Staubach, completed Plantation Point last December. Located in the North Raleigh submarket at the intersection of I-540 and Capital Blvd., the 388,318-square-foot, Class A shopping center is situated on a 52-acre site across the street from the Triangle Town Center Mall. The property is anchored by a Circuit City, Petco, Marshalls and a 115,000-square-foot BJ’s Wholesale Club.
Charlotte, N.C.-based Faison Enterprises is developing Alexander Place Crossing in the Brier Creek area of northwest Raleigh. The shopping center will feature 107,000 square feet of retail space, inclusive of a 30,000-square-foot Best Buy. The first phase will deliver in October, and the second phase will complete in spring 2009.
In Raleigh’s affluent midtown area, the neo-urban North Hills mixed-use community is undergoing a 1.3 million-square foot expansion effort, inclusive of 145,000 square feet of retail space. Additional office, hotel, and residential space, along with a senior living community are planned. The retail mecca attracted more than 8.4 million visitors last year, and it is currently constructing a 48,200-square-foot Harris Teeter and offices for CapTrust, Ogletree Deakins and CB Richard Ellis. Current anchors include Target, JC Penney, Regal Cinemas, Gold’s Gym and REI. Developed by Raleigh-based Kane Realty, the second phase is projected for completion in 2010. An additional 105,000 square feet of retail will be developed in future phases, and upon completion in 2015, North Hills will boast 1 million square feet of retail.
Many of Raleigh’s retail centers are experiencing a facelift as developers rehab older properties and re-position existing tenants. Town North, located near the Creedmoor Road and I-540 exit in North Raleigh, is a 103,473-square-foot center that was rehabbed by Hunter & Associates. The property is now anchored by a Kroger and Kerr Drugs. “We are seeing [redevelopment] all over town,” says Joaquin Canals, a broker with NAI Carolantic. “People are taking advantage of a good business climate and rehabbing existing centers in order to compete. You’re going to see that trend in 2008.”
According to Grubb & Ellis’ market forecast, two new retailers entered the Triangle market. Golfsmith’s leased a 60,000-square-foot space at Pleasant Valley Promenade on Glenwood Ave., and hhgregg opened stores on Capital Blvd. and at Alexander Place. Whole Foods is redeveloping an existing store in Cary. Also this past year, Hecht’s department stores were rebranded as Macy’s.
Regency Centers recently leased space in the Cameron Village shopping center at Oberlin Road and Clark Avenue in Raleigh for the first Best Buy Mobile store positioned outside of Manhattan. Several other Best Buy Mobile stores are slated to open in North Carolina in the next few months. Cameron Village will also welcome a 6,000-square-foot, two-story Chick-fil-A restaurant in early 2009. The restaurant will be the first of its kind to open in the country.
Downtown Raleigh has seen a tremendous amount of redevelopment, including the reopening of Fayetteville Street, once closed off for use as a pedestrian mall. Condominiums, office buildings, a new Marriott hotel and a convention center set to open in 2008 are altering the downtown skyline, and local retailers are getting in on the action. “Most retailers going downtown are smaller regional retailers,” Traflet says. “There has been some discussion of a Harris Teeter coming down with a metro store. With all the units of condos coming in, that’s the key thing we need to sustain permanent living downtown.”
As I-540 circumvents its way around Raleigh, new opportunities for the retail market will emerge as a by-product of new interchanges and exits. This trend will bode well for Raleigh’s economic growth this year. “As the interstate creeps along and creates new pockets in outlying areas, you’re going to see additional developments coming out of the ground,” Canals says. “Small neighborhood centers will continue to pop up as the population increases, and towns that are 20 or 30 miles away from Raleigh are becoming bedroom communities.”
©©2008 France Publications, Inc.
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Jia Gayles
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