NORTHEAST SNAPSHOT, JULY 2005
Southern New Jersey Retail Market
The retail market in Southern New Jersey is one of the hottest in the nation. Boosted by Philadelphia’s established retail presence just over the border in Pennsylvania, development activity is thriving in counties across the area. The high barriers-to-entry create strong competition and a great chance of success for those who succeed in entering the market.
Currently, developers are working furiously to create enough product to meet retailer demand. According to Paul Friedman, broker with Metro Commercial Real Estate in the company’s Mount Laurel, N.J., office, “Vacancies remain low and developers seem to be able to easily meet rental expectations. Even un-anchored, small strip centers achieve high occupancy at targeted rental rates if located along major highways in the tri-county area [Burlington, Camden and Gloucester counties].”
Currently, the vacancy rate for Southern New Jersey is holding strong at approximately 5 percent. Large national and regional retailers are working hard to move multiple stores into the market. Wegman’s recently signed 130,000-square-foot leases in Mount Laurel and Cherry Hill. And Target is making a big splash, with leases for approximately 140,000 square feet in Cherry Hill, Mount Laurel, Marlton, Turnersville, Deptford and Vineland. Also in Mount Laurel, Costco has leased 130,000 square feet for a new store. Other retailers new to the area include L.L. Bean, REI and Golf Galaxy.
As these and other box retailers enter the market, a new trend has developed. “The most noticeable trend is the action several municipalities are taking to limit the size of the big box retailers, namely stores in excess of 90,000 square feet,” says Friedman. “This would prohibit the location of stores such as The Home Depot and Wal-Mart within those townships.”
Even with some towns taking precautions to stem the amount of large-scale developments, activity is everywhere. The most active areas according to Friedman are Cherry Hill in Camden County, Deptford in Gloucester County and Medford in Burlington County. These affluent communities’ density of housing, high incomes and proximity to a regional mall combine to spur continued development, he adds.
One of the largest projects is the redevelopment of the former Garden State Race Track in Cherry Hill. The mixed-use development will incorporate approximately 1,500 residential units, 100,000 square feet of office space and 500,000 square feet of retail. The redevelopment is expected to revitalize the Cherry Hill retail market, which is just now gaining momentum. Another notable project is Centerton Square, which is located at Route 38 and Marter Avenue in Mount Laurel. That center comprises approximately 800,000 square feet of retail space.
Though many of the towns in Southern New Jersey are now thriving beds of retail activity, Friedman feels that Harrison and Woolwich townships in Gloucester County are primed to experience increased interest in the near future. “The U.S. Census Bureau has designated Woolwich as the fastest growing community in the Northeast,” he says. “The Woolwich Township Business Advisory Committee hopes to transform the rural stretch of Route 322 between Exit 2 of the New Jersey Turnpike and the border with Logan Township into a business corridor filled with big box retailers. It is currently the only undeveloped exit on the turnpike.”
Another area to watch for future growth is the town of Medford in Burlington County. Although the New Jersey Pinelands Commission limits development in a large part of the county, Medford draws in consumers from a number of surrounding affluent communities and is, in Freidman’s opinion, under-retailed.
Retail activity is booming in Southern New Jersey and shows no signs of slowing through 2005. Through smart growth and careful planning, the market should continue to experience growth for years to come.
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