COVER STORY, NOVEMBER 2006

RETAIL DEVELOPMENT FINDS ITS NICHE
Retail developers are finding unique niches throughout the Northeast market.
Compiled by Stephanie Mayhew

Retail developments are popping up in all shapes and sizes across the Northeast. From lifestyle centers, to redeveloped malls to retail components in large mixed-use developments. Many will argue that retail developments are being overbuilt, but savvy developers are breaking into markets that have long been overlooked or are experiencing a new rebirth.

The findings in several 2006 Finard reports indicate that big box retailers are the key to a vital retail center. According to the 2006 Finard report for eastern Massachusetts, retail stores that ranged in size from 50,000 to 99,999 square feet showed the most significant improvement in vacancy, 3.4 percent to 6.2 percent.  For stores  under 10,000 square feet, vacancy rates increased from 6 percent to the mid-6 percent level. The same was true in the greater Hartford area. In Finard’s 2006 greater Hartford, Connecticut, report, stores with more than 50,000 square feet showed the most improvement in the past year. Stores in the 2,500 to 4,999 and 5,000 to 9,999-square-foot range in Hartford exhibited vacancy rates above 8 percent. In southern New Hampshire, Finard reported that space users with more than 100,000 square feet of retail space remained fully occupied while spaces under 2,500 square feet exhibited a 24.5 percent increase in vacancy. Northeast Real Estate Business profiled seven different retail developments across the Northeast to give you a glimpse at the who, what, when and where.

The Shops at Atlas Park

The Shops at Atlas Park in the Glendale section of Queens, New York City, offers shoppers 350,000 square feet of retail with premium national and local tenants.

“The center is particularly attractive to moms with young children, who often come to shop with their sisters, friends or mothers. They come, have lunch, and can shop and wander for hours. There is nowhere else in our area where you can do this,” says Hemmerdinger. However, Hemmerdinger also notes that The Shops are also a favorite place for date nights. 

The Shops have been a real boon to the community. The owners and developers of the center have worked to provide cultural events on the weekends in its Ellipse Park since the initial opening. Activities such as a meet and greet with David Wright, the Met’s third baseman, and a back-to-school safety program with Spiderman brought hundreds of local children and their families to the center. For the upcoming holiday season, A&Co. is planning a “name the 18-foot holiday bear” contest and an opportunity for kids to help light the entire center.

Apart from attracting scores of shoppers, The Shops at Atlas Park has attracted many local merchants, giving them an opportunity to thrive in their own community. “Ultimately, The Shops will transform the way people shop, work and play in Queens, making their lives easier and more enjoyable,” says Hemmerdinger.

High Pointe Commons

High Pointe Commons, a 315,400-square-foot shopping center in Swatara Township, Pennsylvania, features a 127,000-square-foot Target and a 99,000-square-foot JC Penney.

Construction of the retail center began in August 2005 and was completed in October with the grand opening of the Target and the JC Penney. Other tenants include Chili’s, GameStop, Sally Beauty Supply, Payless, Lane Bryant, Fever 18, Hollywood Tans, Brothers Pizza, Famous Footwear, Subway, Lee Nails, Hair Cuttery, Hammer's Barber Shop and Jackson Hewitt.

The approximately 43-acre property is strategically located adjacent to the heavily traveled I-283 full-diamond interchange on Harrisburg’s East Shore in Swatara Township. This ideal location allows for easy access that will serve the region’s vast customer base. Other companies involved in this project include High Construction Company, an affiliate of High Real Estate Group, and Bohler Engineering.

Wayside Commons

Wayside Commons is a 196,000-square-foot retail center  that was built on the site of the former Raytheon office building in Burlington, Massachusetts.

Wayside Commons, the first development of its kind in the area, is conveniently located off a 4-way interchange on Interstate 95/Route 128, close to Routes 3 and 3A, minutes from Interstate 93. Its premium location is attracting shoppers from both the immediate towns as well as a very wide geographic area. Chris Cardoni, marketing manager for Finard & Company, which is the property manager and marketing company for the retail center, says, “Once the project is complete, it is expected to generate 350 full- and part-time jobs and more than $75 million a year in sales, significantly impacting the area’s economic environment.”

Designed by Arrowstreet, Wayside comprises five buildings with a village-style design that features brick sidewalks, premium landscaping, pedestrian friendly walkways with benches and gazebos, and a dramatic double waterfall feature. The center also features a central green and gazebo that will host a variety of events, gatherings and performances.

“The opening weeks of the center have been extremely successful, which will continue as additional stores open throughout the fall and into 2007. Over a thousand people lined up for the opening of L.L.Bean, and several tenants have surpassed expectations for traffic and sales in the opening days,” says Cardoni.

Natick Mall

Once the renovation and expansion of the Natick Mall in Natick, Massachusetts, has been completed it will feature the state’s first Nordstrom.

Renovation of the existing mall was completed this month and features updated flooring, restrooms, ceilings, balustrades and a completely renovated food court. The expansion wing will house the state’s first Nordstrom, which is slated to open in September 2007, and the state’s first suburban Neiman Marcus, which is also set to open in September 2007. The existing mall houses Lord & Taylor, Macy’s and Sears, plus a JC Penney, which will open up in March 2007. The development will also include 100 luxury retailers and fine restaurants.

In addition to the retail component, 215 luxury condominiums will attach directly to the center. The new units are scheduled to open in February 2008. The property also contains a set-aside pad for a 4-star, full-service hotel. The retail and residential portions were developed by General Growth Properties and designed by the architectural firm Beyer, Blinder, Belle. Other amenities include valet parking, a car spa and premium paid parking.

Located just a mile from I-90 in the western suburbs of Massachusetts, the mall is located in the second most affluent suburban trade area in the nation. “By 2007, the expenditure potential for shoppers’ goods and merchandise is projected to reach $3.6 billion — an increase of 37.3 percent from 2001. Incredibly, the fashion specialty classification will swell to $1.6 billion — a gain of 55.9 percent over 2001. Natick attracts roughly 17 million customers annually and research shows that the center has dominant penetration throughout the trade area,” says Lazorchak.

As the area’s population continues to grow and with an average household income of more than $100,000 per year, the Natick Mall could not be in a better position. “With the expansion, the trade area is projected to double in size to 1.3 million residents. Presently, the center’s trade area is home to approximately 660,000 people and 250,000 households. In addition, there are more than 1.3 million people within a 15-mile radius. The trade area is affluent with an average household income of $115,863,” says Lazorchak. Lazorchak also notes that the surrounding office space is another factor that affects the trade area. Within a 3-mil radius, daytime employment is 73,014 and it is 100,891 within a 5-mile radius.

Natick Mall developers are targeting female shoppers ranging from 25 to 54 years of age with an average household income of $115,000 per year. Once the expansion is complete, developers will be targeting shoppers with a household income of $150,000 per year. According to Lazorchak, area customers are anxiously awaiting the mall’s transformation as are Natick town government officials. The Natick Mall is anticipated to provide tax payer revenues for future civic projects throughout Natick.

Home Depot Shopping Center

The Home Depot Shopping Center, located at 400 Springfield Avenue, is the first major new-build retail project in more than 20 years in Newark, New Jersey. Part of an urban renewal project, the center will encompass a 105,000-square-foot Home Depot along with two out parcels, a 6,500-square-foot Applebee’s and a 3,000-square-foot Wendy’s. Developed by Goldstein Development Company, ARC Properties and Big M Development, the project broke ground this fall and is slated for occupancy in summer 2007.

Chuck Lanyard, principal and director of brokerage services for the Goldstein Group, says, “the Springfield Avenue neighborhood is located within the heart of a once devastated area that is now part of the City of Newark’s renaissance and rejuvenation.” According to Lanyard, the renewal project includes the development of prime housing projects that include townhomes and single-family homes. “As a result, it was natural that the neighborhood would be in need of retail stores to support and compliment it. Home Depot’s commitment to the neighborhood has been the catalyst, which has sparked very keen interest for new retail projects within the area,” says Lanyard.

The development will give inner city residents a place to shop within their own community, a convenience that has been missing in the area. “Nationally, it has been shown that inner city development has been successful. City officials desire such development for the tax ratables, but above all the residents strongly support retail within their own neighborhoods primarily due to its convenience,” says Lanyard.

The developers of the project are currently negotiating with other national retailers for space and the property can be sub divided to make room for numerous smaller tenants. “The demand for the space has been nothing short of fierce,” says Lanyard.

Wesley Grove at Asbury Park

Wesley Grove at Asbury Park, a 35,000-square-foot retail development that is part of the Oceanfront Asbury mixed-use development, is situated among lakes, expansive beaches and wide boulevards.

Developer Westminster Communities, which jumped at the chance to take part in rebuilding and recreating the jewel of the Jersey Shore, broke ground on Phase I in October 2004. This phase,  includes 4,000 square feet of retail, which  will be ready for occupancy in mid 2007, and a residential component. Westminster Communities recently received planning approval for an additional 5,000 square feet of retail for Phase I, and is working on receiving approval for 10,000 square feet of retail and additional residential components for Phase II. Sam Gershwin, president of Westminster Communities, says, “the city has seen its share of hard times over the past few decades, but it is now experiencing a dramatic rebirth.” The area’s historic streets are lined with upscale restaurants, art galleries, antique shops, nightclubs and concert venues. “Wesley Grove itself occupies one of the most unique locations within the newly emerging Asbury Park waterfront community — Cookman Avenue, which is in the heart of the city’s retail rebirth,” says Gershwin. The development overlooks Wesley Lake set among tree-lined streets and Victorian homes, all within walking distance to the beach. 

Phase I was designed by the architectural firm Minno & Wasko with Phase II being designed by Work Architecture and Design. The entire project is expected to be complete in the next 10 years.

Other amenities for the project include a clubhouse facility, pools, a state-of-the-art health club, massage rooms, locker rooms and social rooms. “The overall Oceanfront Asbury project will be a draw for both tourists and new residents. In fact, the beach and boardwalk have seen record crowds in the summer seasons following the start of the redevelopment project,” says Gershwin.

Mountain Valley Mall

The 295,123-square-foot Mountain Valley Mall is located at 32 Mountain Boulevard in the White Mountain region in North Conway, New Hampshire. The center was originally built in 1970 and had seen few improvements and modernizations. Andrew Rockett, a principal with KGI Properties, says, “due to the population growth in North Conway during the last 5 to 10 years, Lowe’s expressed an interest in opening a store in the market.” The once vacant and dilapidated center is now a pedestrian friendly shopping center with upgraded access on the North-South Road, extensive landscaping and architectural improvements.

KGI began Phase I of the mall, which included mall relocations and renovations, in June 2006 and completed construction in October 2006. Phase II of the development included the development of the Lowe’s, which is scheduled to open this fall.

The mall includes a 170,000-square-foot Lowe’s, a 52,123-square-foot Hannaford Brothers Supermarket, a 38,500-square-foot JC Penney and a 34,500-square-foot interior mall. Other tenants include Fashion Bug, GNC, Cinema VII and Panda Garden. Developer KGI Properties is also looking to place a 5,000-square-foot, sit-down restaurant for the out parcel.

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