The new face of retail
Town centers give retail a boost in Hampton Roads
- July 29, 2011
The new face of retail in Hampton Roads is the town center, both large and small. City Center at Oyster Point in Newport News, Virginia Beach’s Town Center and Peninsula Town Center in Hampton — which opened last year on the site of the former Coliseum Mall — are all doing well. With a mix of retail, offices and apartments or condominiums, the centers replicate the look and feel of traditional downtowns.
The success of town centers has helped lift the region’s retail market. According to CoStar Group Inc., the region’s overall retail vacancy rate dropped slightly in the first quarter to 6.5 percent, compared with 6.6 percent at the end of 2010. In the mall category, which includes the area’s 14 lifestyle centers, the vacancy rate was even lower, dropping to 4.9 percent, compared with 5 percent a year ago. “There’s a definite trend toward city center concepts,” says Bob King, director of retail services for Harvey Lindsay Commercial Real Estate in Norfolk.
Even smaller centers of 4,000 to 10,000 square feet with attractive architectural appointments are starting to crop up throughout the region as both local and outside developers place their stake in the retail market. “Cities are demanding more investment from developers to create a more attractive look. They have a more urban feel as opposed to the strict big-box approach,” observes King.
Meanwhile, he expects enclosed shopping malls to continue on a downslide. “Enclosed malls have had a tougher go of it than in past decades,” notes King. “It’s almost as if all the major chains are here, and if not, only one or two are knocking at the door.”
Rather than chain stores, many of the town centers are attracting for-profit educational institutions as major tenants. Bryant and Stratton College became Peninsula Town Center’s first major office tenant when it opened its third Hampton Roads campus last year above the center’s Barnes & Noble bookstore.
“For-profit educational institutions are among the most active sectors,” says Deborah K. Stearns, a senior vice president for Harvey Lindsay Commercial Real Estate.
Chain stores have also been active retail players in the market, especially dollar and thrift stores, says King. These stores, he adds, are run more efficiently than traditional department stores.
One weak spot for retail is a proliferation of available restaurant buildings. “We have more inventory than we’ve seen in years. In a lot of cases, they need the right operator,” says King.
One of the biggest question marks in retail is Waterside, downtown Norfolk’s festival marketplace. Since opening in 1983, it has endured ups and downs, with the site now more than half empty as city officials try to determine the best usage. “The city is still deciding what to do about Waterside,” says Mark Warlick, a senior vice president with S.L. Nusbaum Realty Co. in Norfolk and the chairman of the city’s planning commission. City Manager Marcus Jones, who began work in February, has asked the city council to delay action while he and other officials determine possible uses for the troubled facility.