Redevelopment Activity is Strong as Grocers and National Tenants expand Footprints

Key Takeaways

  • The vacancy rate remains steady at 12.3% despite significant interest from tenants.
  • Strong momentum for redevelopments and new ground-up construction exists throughout the market.
  • New grocers are entering the market, thriving off the regions stable population and attractive demographics.
  • Asking rental rates are flat, but will increase as new construction delivers.
  • Gross retail sales were down slightly early in 2015 following a busy holiday season.

Market Conditions

The Greenville/Spartanburg, South Carolina retail market continues to welcome significant interest from national tenants and grocers looking to enter the Upstate market.  The vacancy rate remained unchanged at 12.3% throughout the second quarter of 2015 as a majority of deals are happening in planned and under construction centers.  Options are limited as much of the vacant space is located in older shopping centers or outside of the prime retail intersections.  Tenants are competing for space and new construction has been the gateway for many retailers looking to enter or expand in the market.  

The Woodruff Road retail corridor, which ended the first half of 2015 with a vacancy rate of 2.8%, has experienced great activity following the relocation of several retailers from the Haywood Road corridor.  Last year, retailers such as Babies R Us, Toys R Us and Pier 1 vacated their former Haywood Road locations for new retail space at the recently completed Magnolia Park.  While the Haywood Road corridor took a temporary hit, most of the vacated space has been backfilled.

  • Most recently, Boot Barn announced plans to backfill the former Pier 1 space at the Haywood Mall outparcel. 
  • Gabriel Brothers and Conn’s backfilled the former Steve and Barry’s and Babies ‘R Us spaces at The Gallery along Haywood Road. 
  • In 2013, Crosspointe Plaza, formerly anchored by Toys R Us and Circuit City, was redeveloped and attracted new tenants T.J. Maxx, DSW, JoAnn Fabric and Crafts, Chipotle and others.

Rental rates are holding steady with asking rental rates for shop space and junior anchor space averaging $10.63 NNN and $8.82 NNN, respectively.  Asking rental rates for anchor space averaged $5.11 NNN at mid-year 2015. 

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