Rhode Island Retail Continues to Show an Upswing in Leasing Momentum
Rhode Island’s retail market continues to improve, although not to the point that new ground-up major projects are feasible. There is considerable activity with retailers expanding and absorbing the existing supply of retail space. In the past few years, a lot of the activity has focused on absorbing the mid-size boxes that went dark after the start of the recession, due to the closings of stores such as Circuit City, Linens ’N Things, and Borders. The leasing activity over the last several years seems to be the final stages of the absorption of these vacant boxes. As the supply of these existing anchor spaces continues to be reduced, the health of the retail market continues to improve with the result being a slight upward pressure on rents.
The 500,000-square-foot Garden City Center in Cranston, which first opened in 1948, continues to upgrade its tenants, with The Wilder Company’s ongoing multi-year expansion and renovation of Rhode Island’s premier open-air mixed-use shopping center. New tenants opening over the last year include The Container Store, which has taken 25,000 square feet, as well as French natural skin care retailer L’Occitane and natural burger concept b. good. Additional new leases have been signed with New Balance (2,500 square feet), Ethan Allen (6,000 square feet) and Barrington Books (5,000 square feet) all of which will open in the fourth quarter of this year. Victoria’s Secret is relocating and expanding to the space formerly occupied by Coldwater Creek and is adding its Pink concept to this larger space.
Within the city of Providence, the restaurant activity remains strong, with the Federal Hill and downtown submarkets showing particular strength. One notable exception is the closing of Ruth’s Chris Steakhouse across from Providence Place Mall. This space will not remain vacant for long as Capital Grill will relocate to this space from its current downtown location.
In Westerly, Aldi has signed a lease for 19,000 square feet of the 54,000-square-foot former Shaw’s grocery store space in the 190,000-square-foot Franklin Shopping Plaza. Also signing a new lease for 6,000 square feet is Shoe Department. Negotiations are also close to being finalized with two other junior boxes to fill out the remaining portion of this Shaw’s building. These new tenants, in addition to existing retailers TJ Maxx, Pier 1 Imports, JC Penney, Dress Barn and Payless Shoes, will give Franklin Village the best co-tenancy of any property in this coastal town.
Along Route 2 in Warwick, which is the largest concentration of retail in the state, there is always activity. At Marketplace Center, at the intersection of Route 117 and Route 2, LA Fitness has taken the former Shaw’s grocery store to complement existing anchors Bed Bath & Beyond, Michaels, Jo-Ann Fabrics, and Bob’s Discount Furniture. Also opening on a new freestanding pad building at Marketplace Center is Rhode Island’s first Chick-fil-A. Further north on Route 2, Hobby Lobby has opened, complementing their opening in nearby Seekonk, Mass. AutoZone has also signed a lease to take over the former Namco space in the Plaza 1020 Shopping Center. Moving even further north on Route 2, CarMax purchased the 8.3-acre site formerly occupied by Building 19 that straddles the Warwick and Cranston town lines where Route 2 northbound and Route 2 southbound split. The facility is currently under construction and will open soon.
On North Main Street at the Providence and Pawtucket town line, The Procaccianti Group and Steve Lewinstein have purchased the building containing the former Sears department store, Anderson-Little and Down Under Duckpin Bowl building and have demolished the building to construct a new 45,000-square-foot LA Fitness. This will be LA Fitness’ third Rhode Island location. The first opened in the former Borders Books building at Garden City Center in Cranston a little over a year ago and the second opened recently in the former Shaw’s in Warwick.
Cumberland Farms is also pursuing an aggressive expansion and relocation program for their existing 43 stores in Rhode Island. Over the last 12 months they have completed eight major redevelopments or new sites as part of their ongoing efforts to upgrade all of their older and smaller facilities to the new Cumberland prototype. Sonic Drive-In has also just recently announced that it has signed two franchisees in Rhode Island who intend to open three Sonic restaurants within the next 18 months.
Although not as robust as the retail market was prior to the recession, the absorption in Rhode Island continues to improve each year. This is a bright spot for the state, which still has one of the highest unemployment rates in the country. The good news is that the upside for retail will be even greater as the unemployment rate improves.
— By Jed Hayes, Principal, SullivanHayes Northeast. This article originally appeared in the May 2015 issue of Northeast Real Estate Business magazine.