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December 11, 2013
Three Keys to Charlotte Retail in '14
In a nutshell, it's going to be a bangup year Charlotte retail (it will also be a very good year for big city girls of independent means), according to the Shopping Center Group director of leasing Alex Munoz and his partner Andy Misiaveg. Here's why.
1) Rents Creep Upward
The limited supply of retail space combined with residential growth and densification will continue to push rents up slowly, Alex and Andy say. (People are coming into town, and if there's one thing that can be said about people, it's that they like stuff.) Landlords with space in top-tier assets will focus on improving tenant mix and maxing return. There'll be opportunities in smaller mixed-use projects with multifamily as the anchor. Lennar Residential, for example, is developing 250 units with ground-level retail in the Midtown submarket, and the Shopping Center Group is leasing the 8,000 SF of that retail space to serve the residents as well as the surrounding community.
2) Grocery Store Growth No. 1
Grocery stores will be the most active sector, the duo tells us. (Unless we can all just stick to our New Year's weight-loss resolution for once.) Grocery brand expansion: Whole Foods opens its second location in Huntersville and Walmart Neighborhood Market continues to add stores, while Publix enters the market with its first stores and also acquires seven local Bi-Lo locations. Also, grocers such as The Fresh Market, Earthfare, Sprouts, and Trader Joe's are looking at opportunities, as are the lower-priced grocers like Food Lion, Aldi, and Save-A-Lot.
3) Restaurants Open Like Mad
Along with grocers, there'll be major demand from restaurants looking to conquer the Charlotte market. Pictured: one of 2013's restaurant entrants, Cast Iron Waffles at SouthPark's Piedmont Town Center, serving Belgian Liege waffles made with brioche dough and Belgian pearl sugar. One more thing: While grocers are spurring some new development activity, there won't be a surge in large, retail-only developments. The majority of new leasing opportunities revolve around the new or redeveloped grocery-anchored centers as well as the redevelopment of under-utilized junior anchor and big box space.
Gvest Principal Donates Land
Gvest Partners principal Ray Gee, in the Charlotte office, was instrumental in arranging the donation of 100 acres by Gvest Partners principal Jim Shaw to the Savannah College of Art and Design. Snapped at the recent dedication of the James and Laurette Shaw Equestrian Pavilion at SCAD: Jim, Laurette Shaw, SCAD prez Paula Wallace, Susana Gee, and Ray.
Gvest's at work on The Yards at NoDa Apartments in Charlotte, now under construction. Gvest development partner John Bell tells us that the 340-unit property's getting interest from renters even though it's still relatively early in the construction process, with the structure being framed up and plumbing installed. (That means you still have time to reconsider adding that bidet you've always wanted.) The clubhouse is expected to be finished by spring, around the same time pre-leasing begins.
Overheard at ICSC
You didn't buy enough PS4s, Xbox Ones, socks, Hug Me Elmos, and Monster High Dolls on Black Friday. Whether you were still in a turkey coma or just didn't feel like navigating the crowds, sales were weak this year, reports ICSC CEO Michael Kercheval (right, snapped with Urstadt Biddle Properties director of acquisitions/conference chair James Aries and Forest City Enterprises CEO/ICSC chair David LaRue at yesterday's ICSC New York National Conference). But retailers shouldn't fret: Overall November-December sales will be up 3.4% over last year. The next few weeks will be critical, but history has shown Black Friday isn't a good indicator of final numbers. And overall unemployment is down to 7%, which means there's a lot more discretionary income to spend, David says.
The top three retail stories to watch in 2014, according to Cushman & Wakefield's Americas retail services leader Matt Winn (snapped with NY senior directorÂ Steven Soutendijk): 1) the continued rise of luxury as it branches into off-prime locations-- think Ulaanbaatar couture; 2) further urbanization worldwide as people move back to cities--50% of Asians live in cities today, projected at 75% by 2040; and 3) a greater focus on outlets--"on fire, everywhere, every brand... people want a perception of value," he says. Over 7,000 retail-related pros attended this year's conference, held at the New York Hilton and Sheraton.