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Charlotte's retail sector has been robust with activity in the past several months, with positive signs on the horizon. Residential development in Charlotte has been driving a rise in retail projects, particularly in the city’s infill areas, such as SouthPark and the South End.
For instance, more than 1,200 apartment units are under construction or planned in the South End area. This has led to more urbanized retail, including a 55,000-square-foot Publix that is under construction on four acres at South Boulevard and Iverson Way.
The site will also include structured parking and additional shops. Publix has also announced a new location in Ballantyne Town Center, located at Providence Road West and Johnston Road, which is scheduled to open in early 2014.
When Harris Teeter announced that it had hired JP Morgan to sell the company, rumors were rampant and there has been a lot of speculation that Publix was a likely buyer. Most industry insiders do not think that this is likely, so it will be interesting to see how this dynamic plays out. In the meantime, Publix continues to scour opportunities for new locations throughout the Charlotte market, adding a new player in the highly competitive grocery sector.
Earlier this year, DDR broke ground on Belgate, the new power center planned off Ikea Boulevard in northeast Charlotte. There has been a reshuffling of sorts as a number of tenants are relocating from the WT Harris/U.S. 29 area down to Belgate. PetSmart, Marshalls, World Market, Hobby Lobby and Ulta will anchor the project, among others.
Additional shops and restaurants are also planned for the site. In the surrounding area, several multifamily projects are planned or under construction, and there are plans for a new automotive mall as well.
The city’s first Whole Foods recently opened to high acclaim in the Sharon Square mixed-use development in the SouthPark district of Charlotte. In the same development, Pappas Properties and The Allen Tate Cos. broke ground on a new 105,500-square-foot office building that will be anchored by SunTrust Banks. Along with office space, Sharon Square will ultimately include 239 luxury apartments, 50,000 square feet of retail and be served by surface and structured parking.
There is a lot of discussion about plans for development in the Southeast quadrant of Providence Road and I-485 on Matthews Farm. It is likely that there will be an announcement for a large mixed-use project on this 80-acre site in the coming months.
Also, Simon Property Group Inc. and Tanger Factory Outlet Centers Inc. recently announced plans to develop Charlotte’s Premium Outlets, a 500,000-square-foot outlet mall planned for Southwest Charlotte near Steele Creek Road and I-485. A groundbreaking is scheduled for this summer and the project is slated for completion in July 2014.
With some of the positive aspects of new development throughout Charlotte, vacancy rates remain very strong for the overall market at 7.6 percent. Rental rates continue to climb, especially on new construction, as land prices and retail demand for high-quality sites push these rates up. Coming out of the Great Recession, retailers are continuing the trend of “checking all the boxes” to make sure that the real estate they select will result in top-level sales. As growth in the Charlotte market continues, the fundamentals are in place for more selective but successful development in the near future.
— James Mattox and Ty Thomas, senior vice presidents with Cushman & Wakefield/Thalhimer