Retail Market Overview
Greenville area retail space remained strong in 2006 with a 92.89% occupancy compared with 92.24% in 2005. Rental rates increased from $11.41 SF to $12.54 SF. Expenses increased from $1.93 SF to $2.16 SF. The amount of new retail space for lease increased by 70,486 SF.
The Woodruff Road corridor remains the area to be for upscale retailers and restaurants with vacancy at 1.64%. Shops at Greenridge, a 513,000 square foot lifestyle center, located at the confluence of Woodruff Road, I-85 & I-385, added PF Chang’s, Red Robin, and Verizon Wireless to their 75-acre development, which already included Lowe’s, Total Wine, Ross, Office Max, Petsmart, Marshalls, Barnes & Noble, Best Buy, Talbots, and Dick’s Sporting Goods. One of seven out parcels remains for development with Longhorn Steakhouse having one parcel under contract. The Point, located across Woodruff Road, is home to Whole Foods and Circuit City.
As the retail market continues to expand, developers will face difficulties in finding attractive sites for future projects. As Greenville grows, it faces many decisions with regards to future development in areas that already have traffic congestion. Developers must address these obstacles in the initial planning process; the days of building a shopping center without this are gone. Adding more uncertainty to the mix, it is anticipated Greenville County Council will vote to bring the Planning Commission staff under control of the County Administrator in 2007.
Cap rates for grocery-anchored shopping centers rose 70 basis points during 4Q06 signaling a tightening retail real estate market. As investors shift funds into other investments that return higher yields, the end result will be fewer new retail centers being built. Fundamentals should remain strong in 2007, with occupancies steady, and due to rising landlord costs and an already tight market, rents will rise moderately. Additionally, rising construction costs continue to be a concern with each project.
Download the full report
For more information, including the market summary statistics, download the full research report.Download report