Retail-Space Inventory Increases as Rooftops Multiply

September 18, 2006 - The hammering and sawing of homebuilding throughout the Lowcountry is music to the ears of local retail-space brokers.
To Erin England of Charleston commercial real estate firm Colliers Keenan, the conservatively estimated 113,000 new homes springing up and being planned in the region mean all those households will require stores and shops to service them.

“Retail follows rooftops,” said England, quoting a popular commercial real estate saying.

“Time is at a premium, and people don’t want to drive a long way to get goods and services,” said broker Tom Meredith of West Ashley-based Retail Properties Inc.

As the Lowcountry’s population grows, so does the amount of retail space in the area.

Between the end of 2005 and mid-2006, the region’s retail-space inventory jumped from about 12.5 million square feet to more than 14.5 million square feet, while maintaining an occupancy rate of about 90.5%. Those figures come from a pair of Colliers Keenan retail market studies, the first released in January of this year and the second released in July.

The region’s sub-markets—West Ashley, North Charleston, East Cooper, Berkeley County, Summerville and peninsular Charleston—are “healthy” and “robust,” according to Colliers Keenan’s mid-year market study.

West Ashley

In West Ashley, the forthcoming Best Buy appliances store, which is replacing the former Toys “R” Us at the corner of Sam Rittenberg Boulevard and Orleans Road, likely will draw more retailers to that retail-heavy intersection and boost business for the neighboring Books-A-Million store, England said.

A number of “big-box” retailers are looking at space around Citadel Mall, near the Sam Rittenberg-Orleans Road intersection, Meredith said.

Another potential West Ashley retail-growth area is the Bees Ferry Road-Glenn McConnell Parkway intersection, where a new Wal-Mart Supercenter is located. Rumors have it that a number of different stores are considering setting up shop next to the supercenter, Meredith said. Additionally, a Publix supermarket is slated to open on Bees Ferry Road near Main Road, and that too will attract more retail.

East Cooper

In Mount Pleasant, The Market at Oakland’s forthcoming 425,000 square feet of retail space, including a 188,000-square-foot Wal-Mart Supercenter, will help spur East Cooper’s retail growth, the mid-year report said.

Also look for stores and shops to pop up along Rifle Range Road and Hungry Neck Boulevard to support new residential developments near those thoroughfares, England said.

State Route 41 in Mount Pleasant, which extends off U.S. Highway 17 North, will be a corridor of commercial and retail growth serving Dunes West, Park West and other nearby communities, Meredith said.

Farther up Highway 17, the massive Carolina Park, which will include 185 acres of retail space, will be yet another source of retail growth in Mount Pleasant, according to Meredith and England.

North Charleston

North Charleston, which leads the state in retail sales and, with more than 3.4 million square feet of retail space, boasts South Carolina’s largest block of retail-space inventory, has boosted its retail stature with the recent opening of the 375,000-square-foot Tanger Outlet Center in the Centre Pointe commercial development. Centre Pointe was already home to a Sam’s Club and a Wal-Mart Supercenter and has recently attracted several other major retailers.

The city’s International Boulevard-Montague Avenue-Interstate 526 area—the home of Centre Pointe and a number of hotels—is commercially hot, with a 21,500-square-foot retail-and-restaurant development being planned and a Homewood Suites hotel going up behind it, England said. He added that the area could eventually rival North Charleston’s Ashley Phosphate Road-Rivers Avenue retail intersection.

Summerville

Retail construction at the intersection of Berlin G. Myers Parkway and U.S. Highway 78 will add to Summerville’s more than 1.9 million square feet of retail-space inventory, according to the Colliers Keenan report. Additionally, the Dorchester Road corridor continues to grow with retail and residential developments.

Berkeley County

New mammoth residential subdivisions such as The Parks at Berkeley, which could eventually feature more than 13,000 new housing units, and Cane Bay, slated for more than 5,500 homes, will attract retailers and spur an increase in Berkeley County’s 993,000 square feet of retail-space inventory, the report said.

Carnes Crossroads, a forthcoming 2,300-acre mixed-use development near Goose Creek, will further bolster the county’s retail space supply, England and Meredith said.

Overall, the Lowcountry’s retail future looks bright, Meredith said.

“In the past three years, retailers have really started to take notice of the Charleston market,” he said, adding that at events such as International Council of Shopping Centers trade shows, where he and other brokers market their properties to national retailers, Charleston is “well-received.”

“As our market grows, retailers will follow that growth,” Meredith said.

Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.

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