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Retail Leasing Still Going Strong
Bill Bussey, head of the retail division at Grubb & Ellis/Paramount Properties, said the market still carries an appeal to the chains because of solid retail sales, and the income and education levels of the residents are high, especially when compared to other Midwest markets
“Another thing is our median age is very young, about 33, and their income level is very attractive,” said Bussey.
The population growth the metro area has seen over the past decade has improved the region’s image with national retailers. Topping the one million mark for the SMA, Bussey said, has moved the region into another category, and that gets the chain merchandisers to take a closer look at the area.
In fact, Bussey told the Business Journal that he has been working with a national client who has been trying to find the right space on 28th Street for three years now. Bussey met with that client again just recently.
As always, demographics remain the key to landing a national retailer and each one has its own requirements. For instance, to convince a Burlington Coat Factory to come into an area there has to be about 300,000 residents within a certain number of miles, and the growth in the area persuaded the retailer to build a second store, on Alpine Avenue.
Alpine, 28th Street and the RiverTown Crossings section of Grandville continue to be the locations the chains are interested in. Plainfield Avenue was once, but interest in that sector has slipped a bit with some retailers leasing space on the East Beltline.
The largest of the new developments belongs to Hund-Fink Acquisitions LLC. The partnership will build at least 500,000 square feet of retail on 65 acres at 5100 28th St. SE, the site of the Showcase Cinemas theater. The property sale is expected to close on Thursday.
About 166,000 square feet of retail is under construction on Alpine Avenue. Called the Alpine Summit, the project should be finished in the spring and feature Linens N’ Things, Marshall’s, Petco and Schuler Books as tenants. Friday’s and Logan’s Steakhouse fill the property’s outlots, land that was home to Kmart for a few decades.
Romano’s Macaroni Grill will open its first West Michigan restaurant early next year on 28th Street in front of the Cascade Meijer store, and Culver’s is building its first restaurant here in Wyoming, near Home Depot.
Bussey felt the next hot spot would be the South Beltline, along the path that M-6 is carving out. The new 20-mile expressway should be finished in about two years, but the jockeying for position near the highway’s exit points has been going on for a while now.
Alticor, formerly the Amway Corp., owns a goodly amount of property near M-6 and is reportedly willing to sell some parcels to the right buyers. At least one Detroit developer is seriously looking at the area.
“We’re in negotiations with them now,” said Chuck King of Grubb & Ellis/Paramount.
On top of that, area bankers seem interested in backing much of the retail development.
“All the lenders are looking to finance deals,” said King.
As for downtown, Bussey felt retail would pick up in the central core when more housing projects are finished, and the first retailers likely to locate there would provide basic services, such as selling groceries. After grocery stores and dry cleaners set up shop, then others will follow.
“It doesn’t work otherwise,” he said.
But the Huizen family opened EQ3, the first furniture store of its kind in the United States, late last month at 120 Ionia Ave. SE. The store sells loft-style furniture for downtown living and working. It joins clothing store Purple East, also on Ionia Avenue, as shops that cater to people who like the urban lifestyle.
Bussey thought that retail leasing would continue over the coming years, but at different paces. He expects that the metro area will remain one of the more attractive locations in the Midwest and he thinks more deals can be closed over that time.
“You never know all the reasons,” said Bussey of why chains choose markets, “and there is nothing magical about that.”