“Infill, redevelopment and reuse” are the mantras in the city of Richmond and even in some suburbs, where new construction continues to follow residential growth in nearly all the surrounding counties, with Chesterfield and Henrico being the most active. The municipalities themselves play key roles as well. Costs for land and construction continue to escalate, so creativity is key no matter what avenue pursued in the retail world. And like most of the United States, Richmond’s developers and property owners are getting creative to keep their centers relevant.
Short Pump Town Center, Richmond’s darling mall that is owned by a partnership of Brookfield Properties, QIC and local developer Pruitt Cos., is not immune to closures and felt the pain when Nordstrom announced it was not reopening after shuttering the store during the height of the COVID-19 pandemic. However, with the strength of the retail market in Short Pump, the mall and the surrounding market continue to perform. The Container Store and an expanded Arhaus backfilled a vacant hhgregg, and the mall has recently announced deals with Fabletics and Warby Parker.
Connie Jordan Nielsen, Cushman & Wakefield | Thalhimer
ShopCore Properties, which owns West Broad Village anchored by Whole Foods Market, REI and HomeGoods, struggled for years with vacancy and recently pivoted to office to backfill some challenged space. That center is now seeing a ton of activity on its vacant restaurant spaces. New construction is continuing west of the mall with several new mixed-use projects, including Rebkee’s West Village and Eagle’s Greengate. Along with retailers Wegmans, Cabela’s, Lidl and SoulCycle, all parties will benefit from the planned interchange at Interstate 64 and Gayton Road.
In-town, Rebkee and TRP joined forces in the redevelopment of Regency Square Mall, now known simply as Regency. The team has spent the last five years rezoning the property to urban mixed-use, reworking the road system and acquiring vacant anchors. The former Sears is under construction for the first phase of 1,200 approved residential units, while former Macy’s boxes have had floors removed to accommodate Surge Adventure Park and NOVA Aquatics. Panera Bread, Chipotle, Starbucks and Foot Locker round out some of the new tenancy with new restaurants and rooftop dining options opening this year while the redesign is underway for the former JC Penney and the planned food hall.
Within the city limits, Jacksonville-based Regency Centers is constructing Carytown Exchange. Publix anchors this redevelopment of an older shopping center. Richmonders are all waiting for what will likely be some pretty cool retailers to join Chase Bank, which is under construction in this hip art district that is already home to Mellow Mushroom, West Elm and Paper Source.
COVID-19 hasn’t stopped the activity in Manchester and Scott’s Addition. While to-date Manchester has mainly seen residential growth, some retailers are starting to circle, but nothing like Scott’s Addition that has seen an explosion of growth in the residential, brewery and restaurant scene. Virginia Commonwealth University has acquired large swaths of land near the baseball stadium to construct an Athletic Village, and Topgolf and Carvana have facilities going in the greater Scott’s Addition market.
Mixed-use projects are underway by local developers SWA and Fountainhead Properties, while new entries to the market include Level 2 Development and SJG Properties out of Washington, D.C. They have purchased a block along North Arthur Ashe Boulevard and plan a multi-story residential and retail to join neighbors BowTie Cinemas, Starbucks, Aldi and the Cookie Factory Lofts. Just east of Scott’s Addition, Sauer Properties redeveloped the old Pleasants Hardware to make room for the first Whole Foods in the city, and has recently delivered the office components housing some of the corporate offices for CarMax, which is based in Richmond.
Gumenick has made a significant impact with Libbie Mill – Midtown, a redevelopment of 1950s-era housing turned mixed-use residential, office and retail project housing users from Starbucks to Shagbark, a library and the Lumber Liquidators corporate headquarters. Federal Realty Investment Trust has kept Willow Lawn active by adding Dick’s Sporting Goods and Michaels, while Sauer Properties is knee-deep in the re-tenanting and redevelopment of Willow Place along West Broad Street.
The redevelopment of Virginia Center Commons north of town is well underway with its recent rezoning to urban mixed-use. Spearheaded by a partnership between local developer Rebkee and the Chester-based hotelier Shamin and backed by Henrico County’s SportsPlex as part of the plan, it already has several parcels under development. Stanley Martin has plans for townhomes, Shamin is working on its hotel and conference center and the former JC Penney will be the first phase of apartments. The surrounding retail centers that are open or planned in the area will likely meet retail needs.
Another Brookfield property, Chesterfield Towne Center, lost Sears. At the same time, the former hhgregg on the mall perimeter has been bulldozed to make way for a new retail project that will house Chase Bank and Raising Cane’s, both of whom are pushing hard into the market.
Chesterfield County is acquiring Spring Rock Green from Bond Cos. out of Chicago and is early in its plans for mixed-use and county services. Chesterfield is seeing a lot of residential growth, and where you see residential, you see retail, with multiple retail developments announced and underway in both north and south Chesterfield.
A few years ago, restaurants were pushing all the retail action. While that hasn’t gone away, it has been impacted by the drive-thru factor. End caps and freestanding buildings with drive-thrus are the standard requirements as evidenced by new developments such as Swift Creek Place, developed by Market Realty Group, that has both a Cava app-thru and a drive-thru Starbucks. And don’t be confused; when you drive around, you see anchor boxes vacant, but try to get a deal in one. Most, not all, are two- or three-deep in user interest.
In redevelopments, the list is long. And it is not just happening in one area, it is happening all over the market. Residential sales are on fire, which as usual spearheads new development. So maybe the mantra really should reflect the activity: the Richmond market is hot.
— By Connie Jordan Nielsen, Senior Vice President, Cushman & Wakefield | Thalhimer. This article was originally published in the August 2021 issue of Southeast Real Estate Business.