Media Coverage

Shopping Center Business
March 2007
Location Keeps Carolinas Market Positive (North Carolina)

Both North Carolina and South Carolina are seeing large growth in the retail market due to the influx of residents relocating from other parts of the U.S. While some arrive to avoid the often harsh climate of the Northeast, others seek comfort and stability from the weathered coasts of Florida. Many are beginning to call the Carolinas home, because the varied types of terrain make it an easy transition for almost anyone. No matter which way you look at it, retail in the Carolinas continues to grow.

North Carolina

Throughout the major markets in North Carolina, new retail developments continue to grow and thrive. It is not just the lifestyle and open-air centers either; the state is experiencing rapid growth in all forms of retail, from new grocery-anchored projects to redevelopment and demalling. Several new developments are taking root, while others continue to remerchandise to cater to the new residents coming from all parts of the U.S.

Hill Partners is largely involved with the retail market in North Carolina, and that can be seen by the quality of projects they are heading up. The company is currently developing Clemmons Town Center, the first open-air lifestyle center located in the greater Winston-Salem market. Spanning approximately 540,000 square feet, the development is expected to feature a theater, numerous restaurants and café uses, as well as strong lifestyle retailers directed towards apparel and home furnishings. Hill Partners took the property through a rezoning, which it received late last year. In addition of the 50 acres it acquired, the company recently closed on a $6 million center next to its property called Clemmons Village West. According to Bob Spratt, president of Hill Partners, Clemmons Town Center is scheduled for a fall 2008 opening.

Hill Partners is involved with another unique project in Asheville. The company has acquired land in the Biltmore Village historic district along Brook Street, one of the two roads that lead into the world-renowned Biltmore Estate. The estate was constructed in the late 1890s by the Vanderbilt family and attracts approximately 1 million visitors a year. In addition to the large number of people moving to this area, the tourists significantly support the retail and retail growth in the area. The company’s project, called Biltmore Village, will be a three-level, 70,000-square-foot mixed-use development, featuring approximately 35,000 square feet of first-level retail, 35,000 square feet of second-level Class A office space overlooking the district and 160 parking spaces. The project is scheduled for a late 2007/early 2008 opening.

Crosland is involved in the Biltmore area as well with its Biltmore Park Town Square development. The mixed-use town center, situated along Interstate 26, will be anchored by a YMCA and a 15-screen Consolidated Theaters. Crosland plans to include approximately 150,000 square feet of retail space, 150,000 square feet of office space and 300 apartments and townhomes. The project is a joint venture with Biltmore Farms.

Another large-scale project taking root in North Carolina is CBL & Associates Properties' Alamance Crossing located at the intersection of Interstates 85/40 and University Drive in Burlington. The 840,000-square-foot open-air center will feature shopping, dining and entertainment components, and will house three anchors, three junior anchors and several specialty retailers and restaurants upon completion. JC Penney recently signed an agreement to occupy 104,000 square feet at the center, and will join other retailers such as Dillard's and Belk. Alamance Crossing is scheduled to open this August.

Moving south to Wilmington, the growth does not slow down. Brody Company is involved with Mayfaire Town Center, a 525,000-square-foot open-air mixed-use center that is anchored by Macy's and Consolidated Theaters. The property, which is owned by Mayfaire Partners, also houses six junior anchors, including Barnes & Noble, as well as 50 other specialty retailers. Mayfaire Town Center is currently undergoing Phase II, an expansion that will bring even more retailers such as Pottery Barn and Eddie Bauer, as well as residential lofts positioned over the retail. Also included in this expansion will be a 100,000-square-foot community center anchored by Harris Teeter. Phase II is expected to open in 2009.

"Response to the center has been outstanding, with residential units selling through, business park occupants on-site, a hotel opening and strong retail sales," says Roxana Kish, development and leasing services provider for Brody Company. "All of which has been complementary to the existing retail in the market. Mayfaire draws regionally as far as an hour outside of the market."

Brody Company is developing two more significant projects in the state: Crystal Coast Plaza in Morehead City and 11 Galleria in Greenville. Crystal Coast Plaza is a 250,000-square-foot power center currently under construction. Phase I, which will be delivered in spring 2008, will bring Ross Dress For Less and up to 10 additional junior anchors. Phase II is scheduled for completion in 2009.

The company's other project, 11 Galleria, is an example of how new retail centers are not the only development activity taking place. The project, which is a redevelopment of Carolina East Mall, will be completed in two phases. Upon completion in mid-2008, Phase I of 11 Galleria will develop 200,000 square feet and will update an existing Sears department store. Plans also include adding a second department store anchor as well as a gourmet grocer and specialty retail. Phase II, which is scheduled for a late 2009 opening, will add another 200,000 square feet with a junior anchor and more specialty retailers.

"11 Galleria targets a wide range of consumers and is positioned for success by merchandising moderate to upper moderate retailers, and better in a market that does not have any significant massing of specialty retail in an upscale open-air environment," Kish says.

Kane Realty Corporation also is involved with a large project in North Carolina. The company is developing North Hills, a more than 1 million-square-foot mixed-use center located in Raleigh. While the center is currently open, new phases are underway. North Hills, which houses tenants such as Target, JCPenney, Regal Cinemas, Gold's Gym, Harris Teeter and REI, features approximately 900,000 square feet of retail, 400,000 square feet of office space, 750 residential units, 300 senior residential units and a 230-room Renaissance Hotel.

"We are seeing more attempts to do mixed-use," says John Kane, CEO of Kane Realty Corp. "The quality of continued steady growth over sustained periods, along with very strong employment growth, makes this area attractive for developers. The quality of life is very hard to beat."

Park West Village, a development of 1st Carolina Properties, is another mixed-use development in North Carolina. Located in Morrisville, just west of Cary, Park West Village will be a more than 700,000-square-foot mixed-use center featuring a blend of retail, residential, entertainment hotel and dining components. No tenants have been announced for the development, which is scheduled for completion in July 2009.

"Park West Village is in a large infill location with strong densities in a high income residential and daytime population -- with an opportunity to have both power and lifestyle components," says Connell Radcliff, president of 1st Carolina Properties.

Lauth recently broke ground on its new development, The Shoppes at Rivercrest, in Granite Falls. The shopping destination, which is located at the intersection of Highway 321 and New Farm Road, will span more than 280,000 square feet on 60 acres. The Shoppes at Rivercrest will be built in two phases with Phase I to include a 184,000-square-foot Wal-Mart. Phase I is set to open by the end of the year.

Sperry Van Ness is also present in the North Carolina market. The company is involved with Troutman Commons, a development located at Exit 42 off of Interstate 77 in Troutman. The project, which is scheduled for a 2009 opening, is still in the early stages and no tenants have been named.

"Troutman Commons is the first of its kind in the Troutman area, and will be successful due to location, demographics, land use, community and the growth in population," says Tom McMahon, managing director for Sperry Van Ness.

The Shops at Friendly Center, a retail development of Starmount Company, is a project in Greensboro that currently has 260,000 square feet open, with another 80,000 square feet planned to open in 2008 or 2009. The property, which is located adjacent to the 1 million-square-foot Friendly Center, is anchored by Harris Teeter and five restaurants: P.F. Chang’s China Bistro, Mimi’s Café, Jason’s Deli, Flemings Prime Steakhouse and Wine Bar, and Bravo Cucina.

Crosland is creating a presence in the Charlotte market with Blakeney, a master-planned community featuring a large-scale retail center. In addition to multifamily homes, single-family homes and office space, Blakeney will house a 515,000-square-foot retail development that will be located at the corner of Rea and Ardrey Kell roads. Anchoring the retail component will be a 125,000-square-foot Target and a 48,000-square-foot Harris Teeter. Also planned for the project will be a blend of local, regional and national tenants such as Banana Republic, as well as several restaurant including Chili's, 131 Main, Encore Café and Salad Creations.

General Growth Properties also is involved in the Charlotte market with its The Bridges at Mint Hill located at the intersection of Interstate 485 and Lawyers Road in Mint Hill. The 1.3 million-square-foot open-air project will be anchored by three freestanding department stores, a bookstore, a 14-screen theater, several restaurants and specialty stores. The Goose Creek runs through the development site and plans include numerous bridges over the water, connecting the shopping portion with the entertainment component.

In Davidson, Edens & Avant is developing Davidson Commons. The project, which is positioned just 15 minutes north of Charlotte, is located off of Interstate 77 and in close proximity to Davidson College. The 90,000-square-foot retail project will include a Harris Teeter, and the adjacent site will house a new charter school. Davidson Commons is expected to open this fall.