Retail Construction Wave Hits Metro Des Moines
Stand in the center of Des Moines, take a look in all directions and one will discern that retail growth is not discriminating. It’s occurring in all areas of the marketplace.That’s not surprising for a metro area of 600,000 that was recently named “America’s Wealthiest City” by NBC’s Today show as part of a special series titled “Healthy, Wealthy, Wise.” In 2013, Forbes magazine ranked Des Moines tops on its 15th annual list of “Best Places for Business And Careers.”
Market statistics provide plenty of evidence. Occupancy in neighborhood retail centers has increased for three straight years, rising to 81.9 percent at the close of 2013. Leasing activity has been robust with more than 300,000 square feet of positive absorption during the past 12 months. Only a few big-box retail spaces are now available with occupancy rising to 97.5 percent in December 2013.
Although growth is occurring in all areas, the Jordan Creek Town Center corridor continues to grab headlines. Hurd Real Estate continues construction on the 328,597-square-foot Plaza at Jordan Creek. In addition to Lowe’s and the recently opened Dick’s Sporting Goods, both HomeGoods and Nordstrom Rack are nearing completion.
The Nordstrom lease is a significant milestone for Iowa as it will be the chain’s first store in the state. There also continues to be a flurry of construction activity involving small to medium-sized retail centers in the Jordan Creek Town Center corridor.
That’s evident by RCG Ventures’ planned 75,000-square-foot retail center located at Jordan Creek and E.P. True Parkway, plus 37,000 square feet of proposed construction at the Kohl’s-anchored Paradise Point, and a new 7,800-square-foot building proposed at West Glen Town Center.
Construction Is Contagious
The momentum in the Jordan Creek corridor has spilled over to the northwest suburbs. Lifetime Fitness unveiled a new 168,000-square-foot fitness facility at Heritage Park in Urbandale. Meanwhile, Signature Real Estate Services is nearing completion of its Phase II of Hawthorne Plaza, which will total 55,000 square feet. Construction of the 18,200-square-foot Williams Pointe Center on Hickman Road is nearing completion.
The northern suburb of Ankeny began emerging 10 years ago as one of the major players in the Des Moines retail market. That trend continues as the population of the suburb recently increased to slightly more than 50,000, making it Iowa’s 10th largest city.
Retail construction continues on Delaware Avenue in Ankeny. Sam’s Club is building a 136,000-square-foot store slated to open next March. It will be the retailer’s second store locally.
Adjacent to the Sam’s Club, The Staenberg Group is planning a two-phase power center that will total 315,000 square feet. Growth in Ankeny is not only located on Delaware Avenue. Prairie Trail continues to develop quickly north and west of the new Hy-Vee supermarket. A 30,000-square-foot, mixed-use building is under construction at the District of Prairie Trail and additional space is under construction at the Plaza Shoppes.
Momentum also continues in north Ankeny near the abundant high-end residential development, including Denny Elwell Co.’s addition of a second phase to Northview Centre.
Retail growth has also spilled over into the eastern suburb of Altoona, the home of Prairie Meadows Racetrack and Casino, Adventureland amusement park and Bass Pro Shops. Cinemark Theatres, seeking to take advantage of this customer base, plans to open a 10-screen theater in fall 2015 at Adventure Village, located across from the main entrance to Prairie Meadows.
New England Development plans to build a 325,000-square-foot outlet center at Prairie Crossing, south of Bass Pro Shops. The open-air center will be home to 75 outlet stores and restaurants and is slated to open in 2016. St. Louis, Mo.-based Sansone Group is proposing a 349,000-square-foot power center adjacent to the outlet mall.
Southside Changes Unfold
For most of the past decade, retail growth on the south side was stagnant due to little new construction. Retailers focused on locating stores on the west side of the metro area. However, the retail climate on the south side of Des Moines has changed during the past 12 months, led primarily by Macerich’s decision to transform Southridge Mall from an enclosed mall to an open-air center with pedestrian-friendly plazas and more than 100,000 square feet of new retail space.
The successful redevelopment has attracted new retailers to the corridor, including Marshalls. Familiar names like Shoe Carnival have also returned to open a store. Momentum is also evident on the Fleur Drive corridor with a mix of new projects as well as the completed remodel of the Hy-Vee grocery store and the adjacent Fleur Plaza owned by Copolla Enterprises.
Interest continues to grow in the emerging retail market in the central business district, primarily from new restaurants and retailers attracted to the East Village and Martin Luther King Jr. Parkway neighborhoods.
One stumbling block occurred in March when a massive fire broke out at the former Younkers Building. The structure was under redevelopment as a mixed-use property and was a foothold for the proposed Walnut Street redevelopment, a planned high-end downtown shopping corridor.
The fire may temporarily delay the redevelopment of Walnut Street, but the dynamics for retail growth are in place as multifamily construction is occurring throughout downtown. The construction includes a mix of warehouse-to-apartment conversions, ground-up townhomes and apartments, and conversions of several Class C office buildings to apartments.
— Bill Wright, Senior Vice President of CBRE | Hubbell Commercial. This article originally appeared in the August 2014 issue of Heartland Real Estate Business.