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Shopping Centers Today -> March 2004
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SHOPPING IN CHARLOTTE
New projects mean residents won’t have to leave town to shop anymore
BY IAN RITTER
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But all that could change over the next year or so. Developers are busy in the city’s downtown, as well as to its north and south, bringing a new regional mall (see story) and a variety of mixed-use, lifestyle and grocery-anchored centers to the area.
That’s music to the ears of Tony Crumbley, vice president of research at the Charlotte Chamber of Commerce, who bemoans the lack of attention paid to the city by developers and retailers up to now.
“It’s like we didn’t exist until last year, and they finally got wind of the high incomes,” he said.
The city and surrounding Mecklenburg County will have an estimated 801,000 residents this year, up from 695,000 in 2000, according to the Chamber of Commerce. Charlotte is home to such financial institutions as Bank of America and Wachovia. Furthermore, the long-awaited Interstate 485 is nearing completion in some areas, making access around town easier and attracting businesses to the outer loop.
In all, Charlotte could see some 6 million square feet of new retail built between now and 2007; of that, 2.4 million square feet is currently under way, says Raleigh, N.C.-based Karnes Research Co., a real estate research firm. Since the first quarter of 1999, about 5 million square feet of space has gone up, the company says.
Some of the new centers are upscale, while others will meet the burgeoning population’s everyday shopping needs. “The grocery-anchored centers are nonstop, and they’re all over the city,” said Michelle Buckley, a retail specialist in the Charlotte office of real estate services firm Grubb & Ellis.
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| Simon’s SouthPark Mall is getting the area’s first Nordstrom store. |
“We think the development is unique and a good fit for Saks,” said Julia Bentley, a Saks spokeswoman. “It’s a growing upscale area.”
Up to now the residents making the trip to Atlanta for their upscale shopping have been served by two Simon malls: Phipps Place and Lenox Square, observed Mike P. McCarty, Simon’s senior vice president of research and corporate communications.
“The market has been missing the luxury tenants for quite some time,” McCarty said. “We have made it our job to get everyone there.”
Among the other developers expanding the area’s retail offerings:
•Columbus, Ohio-based Continental Real Estate Cos. is building two centers in Charlotte’s well-heeled Ballantyne neighborhood, about 13 miles southeast of downtown, in a 172-acre mixed-use project called Toringdon. Continental has broken ground on the 100,000-square-foot Toringdon Market, an open-air center anchored by natural foods chain Earth Fare, which is to open sometime in the third quarter. Then, in August, Continental will start on the 125,000-square-foot Streets of Toringdon specialty center, which is scheduled to open next spring. Continental is building Toringdon in partnership with Raleigh, N.C.-based Lichtin Corp.; the project will also include 650,000 square feet of offices and 800 apartments.
“The demographics are very compelling,” said Jonathan Kass, Continental’s president of development. About 103,000 people live within a five-mile radius of Ballantyne, nearly half of whom report average annual household income of more than $75,000, according to Decision Data Resources. Decision Data says the population will increase by about 15 percent by 2008. Some of the area’s residents enjoy the highest income levels in the city, says the Charlotte Business Journal.
•Sheild Property Co., based in Matthews, N.C., has broken ground on a four-building mixed-use project called Ballantyne Village, which will have two 14-story residential towers above 120,000 square feet of high-end retail and an independent movie theater. Sheild, which currently owns four specialty- and grocery-anchored centers in Charlotte besides this one, plans to open the first phase of Ballantyne Village by the spring of 2005. The development is going up near the upscale Ballantyne Resort Hotel and the Ballantyne Corporate Park.
“There’s no lack of population density,” says George Sheild, the firm’s principal. “There is a lack of the specialty, high-end, lifestyle retailers.”
•Crosland is building Blakeney, a mixed-use project 14 miles from downtown, just east of Ballantyne. Blakeney will contain 515,000 square feet of retail anchored by a Harris-Teeter grocery store and will also offer a park for concerts and other community events. The project is scheduled to open during next year’s second quarter and will include 250,000 square feet of offices as well as 364 town houses and single-family dwellings.
Crosland, which is based in Charlotte, owns 21 centers in the city. In 2002, along with partner Pappas Properties, it opened mixed-use lifestyle center Birkdale Village (SCT, March 2003), just north of the city. (Inland Retail Real Estate Trust bought a majority stake in Birkdale in May.)
•Locally Pappas Properties, for its part, is building a mixed-use project called Berewick about 12 miles west of downtown, near the Charlotte-Douglas International Airport. The project will include 250,000 square feet of retail and 1.2 million square feet of office space, as well as 750 housing units, starting at $150,000. Berewick is close to the I-485 interchange and will open in phases over the next eight years.
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| Sheild Property’s Ballantyne Village will have two residential towers above high-end retail. |
Charlotte’s downtown is growing by about 1,000 residents a year, says Darryl Dewberry, president of leasing and management at locally based Spectrum Properties, which is working to convert the old 200,000-square-foot convention center into a retail and entertainment center opposite the new stadium.
In 2002 Spectrum opened a 305-unit apartment building with a Harris-Teeter on its bottom floor.
“The density is really coming on,” Dewberry said. “The dynamics continue to get better and better. You’ll see a lot more retail coming in over the next five years.”
Making the downtown busier still will be the new Johnson & Wales University cooking school. In September the 145,000-square-foot facility will go into Gateway Village, an existing multiuse development owned by Bank of America and Cousins Properties.
All this development will help Charlotte start generating the retail dollars that have been going elsewhere. One major drain has been the Concord (N.C.) Mills value megamall, which The Mills Corp. opened about 25 miles northeast of Charlotte in 1999. Total retail sales in Charlotte and Mecklenburg County that year were $16.8 billion; that has only declined since then, to $16.6 billion in 2002 (the chamber’s latest figures). Chamber officials predict a rise when the new projects start going up, but they offer no figures.
Part of the reason for this modest increase is that some of the new retail being built is replacing vacant and underperforming centers, says Crumbley.
That’s fine with Charles Dulin, senior vice president of investment sales in the Charlotte office of real estate services firm Commercial Carolina.
“It’s a steady growth market,” Dulin said. “I hope that it continues to grow in the steady pace that it has in the past, because steady means stable. It will never have this flash-in-the-pan type of environment for growth, where you have this roller-coaster type of environment. It’s healthy to be predictable.”
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