The Charlotte MSA continues to experience a high level of retail activity as we go into the last quarter of 2015. With a regional inventory of 62 million square feet of retail space, the MSA has seen more than 8 million square feet of new development proposed. Vacancy rates are holding steady in the 8 to 9 percent range, and average rents have remained stable.
Grocers Setting the Pace
Retail development activity in the Charlotte area remains driven by grocery store expansion. Publix has opened units in Ballantyne, Matthews, Southeast Charlotte and, most recently, South End, with several new stores approved and in various stages of development. Some of the Publix activity has resulted from conversions of units it acquired from Bi-Lo, while the Ballantyne, Fort Mill and South End stores were new construction projects. Publix will open five more stores in the market in the coming year, bringing its MSA store count to 16. This will include Publix’s first stores in the Cabarrus County and Gaston County markets.
Perennial market leader Harris Teeter remains the dominant traditional grocer in Charlotte with a 20 percent market share, which places it, Walmart and Food Lion in close proximity. Harris Teeter, which was acquired by Kroger in January 2014, has announced expansions and renovations at several area stores, including its flagship Cotswold location. New stores are planned for Gastonia, Berewick in Southwest Charlotte, Harrisburg and Fort Mill, and a new mixed-use development announced by Marsh Properties and Aston Properties in the Sedgefield/South End submarket, which will heat up an already competitive situation there.
Chris Thomas, Childress Klein
Marsh Properties also plans a redevelopment of its Strawberry Hill project in south Charlotte, which is anchored by The Fresh Market. Across Providence Road from Strawberry Hill, Levine Properties and Raley Miller Properties are seeking approval for a mixed-use redevelopment that could include up to 100,000 square feet of retail space.
The Fresh Market has been especially active in Charlotte. Its new store at Dilworth Gardens on East Boulevard will be the specialty chain’s sixth location in the MSA.
Whole Foods Market has likewise stepped up its investment locally with a new 40,000-square-foot store under construction at Waverly, a 90-acre multi-use project being developed by Crosland Southeast and Childress Klein on Providence Road just south of I-485. Whole Foods is also slated to be a part of Crescent Communities’ recently announced mixed-use project on Stonewall Street at Caldwell Street in the Center City.
Elsewhere in town, an ongoing redevelopment of EDENS’ Park Road Shopping Center is transforming that landmark project. EDENS is also working on plans to bring more retail venues to join Anthropologie at the historic Atherton Mill complex in South End.
Significant Projects
SouthPark is another center of significant activity, with Simon Property Group commencing interior and exterior improvements to the market-leading super regional mall. Just north on Sharon Road is the site of the proposed mixed-use redevelopment of the 27-acre Colony Apartments site by a joint venture between Synco Properties and Schlosser Development. Childress Klein is working on a plan to create an innovative mixed-use project on seven acres owned by Sharon United Methodist Church just across Sharon Road from the mall. The church would remain on the site in a new facility as part of the plan.
The Providence/I-485 interchange is one of the most attractive suburban opportunities for new retail growth in Charlotte. In addition to the 235,000-square-foot Whole Foods- and Ulta Beauty-anchored retail piece of the Waverly development, the Charlotte City Council has approved the redevelopment of a 188-acre site owned by the Rea Family known as the Charlotte Golf Links property. Lincoln Harris has partnered with the Rea Family in planning a multi-use development including up to 250,000 square feet of retail space. Crescent Communities has proposed a more limited retail and hospitality component as part of its plan to develop the 66-acre Star City site adjacent to Waverly, with a zoning decision pending as of this writing.
Southwest Charlotte has seen the completion of Childress Klein’s 150,000-square-foot Shops at RiverGate South, anchored by Gander Mountain, Home Goods and Michael’s. Cabela’s has opened its 100,000-square-foot full-line unit at the I-77/Carowinds Boulevard interchange, and T.J. Maxx will anchor Childress Klein’s 40,000-square-foot expansion of Steele Creek Crossing, slated to open in mid-2016. Top Golf recently announced a plan to come to the market in the coming year at the I-485/Arrowood Road interchange near Charlotte Premium Outlets.
Looking ahead, we expect infill and redevelopment activity to continue to be strong in Charlotte, fueled by the previously mentioned grocers in addition to newcomers Lidl, Sprouts and the aggressively expanding Walmart Neighborhood Market. With significant job growth and an attractive quality of life, Charlotte should continue to be the pacesetter retail market in the Carolinas.
— By Chris Thomas, Partner – Retail, Childress Klein. This article originally appeared in the November 2015 issue of Southeast Real Estate Business.