Canals

The Raleigh-Durham, North Carolina, retail market has experienced a tremendous amount of retail construction over the last couple of years, according to Carolantic Realty/NAI’s Joaquin Canals, director of leasing, and Kerry Saunders, marketing and research director. This new development includes two mega-malls, Urban Retail Properties Company’s The Streets at Southpoint and The Richard E. Jacobs Group’s Triangle Towne Center, each more than 1 million square feet. There are also two new regional power centers in West Raleigh and in Garner, which is just south of Raleigh.

Many retailers are opening new locations or expanding in the area. Nordstrom is new to the market with a store at Southpoint. Target, BJ’s Wholesale Club, Wal-Mart, Dick’s Clothing and Sporting Goods, Kohl’s and Best Buy are broadening their local presence. SuperTarget and Home Depot opened in Wake Forest recently. At Brier Creek, Wal-Mart Supercenter is due to open before the end of the year. Best Buy is scheduled to open near Triangle Towne Center by early summer.

Saunders

The completed construction of the northwest quadrant of the new Outer Loop (Interstate 540) around Raleigh has also created more viable retail pockets at or near the new interchanges. New developments that have grown out of this new road pattern include the 1.3 million-square-foot Triangle Towne Center; Falls Pointe, a 103,000-square-foot center owned by Weingarten Realty Investors; Weingarten Realty’s Leesville Center, totaling 95,000 square feet; and AAC Real Estate Services’ Brier Creek, a 2,000-acre mixed-use project.

“We expect to see the Triangle Towne Center area (Capital Boulevard and I-540), the Brier Creek area (Route 70 West and I-540) and the White Oak area (Route 70 East and Interstate 40) development to continue to grow during 2003 and 2004,” Canals and Saunders note. “As construction on the Outer Loop continues, we will expect new pockets of opportunity to open in the future.”

Retail vacancy was 6 percent overall for the Triangle market at year-end 2002. The retail market has remained very stable over the last decade with the last high vacancy rate being at 9 percent in 1990. The retail market also had one of the highest absorption rates in 2002 at 10 percent, the highest rate since 1988.

“Locally, we expect to see the retail vacancy rate rise slightly over the coming year despite a slowdown in new construction,” say Canals and Saunders. “Though there has been a recent rise in consumer spending, durable goods sales were down, as were home sales. With the stabilization of our national economy following the war in Iraq and an increase in job growth, consumer confidence should improve considerably — and thus retail spending should improve. We hope to see this improvement by year-end 2003.”


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