The retail market in the Raleigh-Durham-Chapel Hill MSA (“The Triangle”) is steadily improving. Retail vacancy dropped to 8.39 percent within the Triangle as of the third quarter — the result approximately 525,000 square feet in absorption over the past 12 months. Investors and retailers alike continue to be attracted to the region because of its sustainable economy fueled by the state government, Research Triangle Park and the University system.
Several new anchor retailers entered the Triangle market during 2010, absorbing the majority of available boxes abandoned by Circuit City and Linens ‘N Things. Nordstrom Rack filled the former Linens ‘N Things space at CBL’s Renaissance Center at Southpoint in Durham; Ollie’s Bargain Outlet opened at York Properties’ Cary Village Square in Cary; The Container Storemade its Triangle debut in the former Circuit City location on Glenwood Avenue across from Crabtree Valley Mall in Raleigh; and buybuy BABY opened its first Triangle location at Kimco’s New Hope Commons in Durham.
Only a small amount of new retail development was completed in 2010. Kane Realty delivered the only anchored retail project at North Hills East, which is situated at Six Forks Road and Interstate 440 — Raleigh’s “Beltline”. Anchored by Harris Teeter and Sparians Bowling Boutique and Bistro, the 96,400-square-foot neighborhood center is 95 percent leased and occupied.
However, increased development activity is expected in 2011 with four new retail centers slated for completion. All of these projects were planned prior to the economic recession and are currently under construction.
Developed by Regency Centers and Welcor Development, The Market at Colonnade will feature the first newly constructed Whole Foodsin North Carolina. The 57,000-square-foot neighborhood center is located in the heart of North Raleigh at the intersection of Six Forks and Strickland roads. Upon its completion in early 2011, the development will be the city’s only LEED-certified retail project. The development duo is also completing Harris Crossing, a 52,000-square-foot neighborhood center anchored by Harris Teeter. Located in Wake Forest, NC; the shopping center is slated to open in February.
Phase I of Park West Village is also under construction. Developed by Casto and 1st Carolina Properties, the 304,000-square-foot retail center is expected to feature Target, TJ Maxx and buybuy BABY. Situated at Cary Parkway and Highway 54 in Morrisville, the 100-acre, mixed-use, lifestyle development will include retail, residential, office and entertainment components. Also developed by Casto, Fairview Shopping Center, a Food Lion-anchored neighborhood center is slated to open in January in Cary.
Western Wake County is the next frontier for retail in the Triangle, primarily due to the construction of Interstate 540, Raleigh’s “Outer Loop,” which will go from Research Triangle Park to Highway 55 in Apex. This 12-mile stretch, known as the “Western Wake Expressway,” will improve regional access to Research Triangle Park as well as Raleigh-Durham International Airport for residents of western and southwestern Wake County. Slated for completion in 2012, the improved infrastructure will perpetuate additional demand for community and regional shopping destinations along the Highway 55 corridor.
The Triangle will continue to improve as retailer demand outpaces supply. Inevitably, this demand will pressure developers to deliver new product in 2011 and beyond.
— Abbitt Goodwin manages the Raleigh office for The Shopping Center Group’s Carolinas Division. He focuses on anchor leasing, tenant representation and land assemblage in the Carolinas.