Retail Leasing Activity, Development Are on the Upswing
Retail is looking up in Richmond. Following a recession characterized by a dearth of new retail development, the Richmond retail market is once again poised for growth. Decreases in the overall vacancy rate, positive employment growth, increases in retail rents and an upswing in overall retail construction suggest that the market is amidst a retail recovery. Historically, these economic factors have driven robust expansions. While “robust” might be a bit dramatic for 2013, several retail projects are in the pre-development and development phases, coupled with a number of significant retail transactions. Those are encouraging signs that point to recovery.
Several noteworthy retail developments fill the pipeline. Walmart recently acquired a 10-acre site at Reynolds Crossing, a 90-acre, mixed-use development in Richmond’s established “near west end” suburb, with plans to build a 90,000-square-foot store with a garden center. Expected to open in spring 2014, Walmart is set to anchor the development that includes small shop and restaurant space in addition to outparcels.
Likewise, Kroger is under construction with its third Kroger Marketplace in the Richmond MSA. This 124,000-square-foot grocery concept anchors Staples Mill Marketplace, which will also include outparcels and small shop and restaurant space.
After 10 years of planning, Gumenick Properties is moving forward with Libbie Mill, an 80-acre, urban mixed-use development slated to include almost 1,000 homes for sale and 1,100 apartments along with 50,000 square feet of office space and 150,000 square feet of retail space. It was recently announced that Southern Seasons, a Chapel Hill, N.C.-based gourmet grocery store plans to make its market debut at Libbie Mill when it opens in 2014.
On downtown’s west side near the fast-growing Virginia Commonwealth University, the historic thoroughfare known as The Boulevard is home to an exciting, emerging trend that is creating a unique new submarket. Some of the city’s oldest industrial properties have been transformed into mixed-use developments with trendy loft apartments and retail and restaurant spaces that appeal to the 20-something demographic that desires to live close to work.
For example, The Rebkee Co., a local developer, recently kicked off the redevelopment of the Interbake Foods factory. Upon its completion, the mixed-use development will include 178 apartments, ground-floor retail and an anticipated grocery component.
Adding to the resurgence of this area is the new Bon Secours Washington Redskins Training Center, a significant accomplishment for the Richmond Economic Development Authority. The state-of-the-art facility, which relocated from northern Virginia, opened late July for the 2013 pre-season training camp.
In addition to these significant transactions, other key retailers are expanding as new capital infuses Richmond. Dick’s Sporting Goods added a new store at Southpark Mall in Colonial Heights, the southern-most sector of the Richmond MSA. Rose’s Department Store leased 40,000 square feet on Richmond’s northeast side, and Floor and Décor back-filled a former 80,000-square-foot Kmart box on West Broad Street, Richmond’s primary east-west retail thoroughfare.
On the investment front, Cole Real Estate Investments acquired White Oak Village, a 1 million-square-foot open-air lifestyle center near Richmond International Airport, and Hancock Village, a 350,000-square-foot power center in southwest Richmond.
Excel Realty Trust entered the Richmond market in late 2012 with its purchase of West Broad Village, a 386,000-square-foot mixed-use development in Short Pump, Richmond’s premier retail trade area and home to Short Pump Town Center, the area’s highest grossing mall.
Retail expansion is expected to continue with grocery and restaurant tenants driving the growth. With continued decreases in vacancy rates, increases in available jobs, increases in rental rates and renewed construction activity, Richmond’s retail real estate is set to prosper.
— Kevin South, leasing agent, The Shopping Center Group LLC