Building a project in tough times
- April 15, 2009
Building a project during tough times
Buildings continue to open at the Watkins Centre, Chesterfield County’s major new mixed-use development. Behind the scenes, though, a local developer told a real estate group of his company’s changing strategies as it moves forward with building out 35 acres of the 650-acre project during a recession.
“Unfortunately, if you build it, they won’t come right now,” Robert W. Hargett, a principal of Midlothian-based Rebkee Co. said during a presentation today before the Richmond chapter of Commercial Real Estate Women. About 80 members turned out for an update on The Shoppes at Westchester, a smaller development within the 900,000-square-foot Watkins Centre.
So far, Rebkee has built about 60,000 square feet of retail space and leased about 35 percent of it at four retail buildings. Even in a down market, Hargett said the buildings had to go up on schedule, as part of commitments that come with the creation of a community development authority. CDAs are financing entities used by commercial developers in conjunction with localities to issue bonds for infrastructure such as roads. In theory, revenues generated by the projects are expected to be high enough to cover payments on the bonds.
To attract tenants, Rebkee is offering free rental concessions along with lowered rents — with space going for about $29 per square foot as opposed to the $35 the developer hoped to charge, said Hargett. A delay in the construction of 1,600 residential units by another developer hasn’t helped retail efforts, he added.
Currently, tenants include a CVS drugstore, a Burger King and several restaurants. Asked about the upscale fashion merchandisers and boutique tenants the center initially hoped to attract, Hargett said he’s hoping to have more luck with those clients in the future. “The people here today may not be the ones in here five years from now.”
Rebkee’s development is adjacent to Westchester Commons, the larger retail component of the huge lifestyle center. Under development by Reston -based Metropolitan Partnership and the Zaremba Group out of Cleveland, Westchester has drawn such national anchors as Target and JoAnn fabrics. Opening tomorrow is a 66,000-square-foot Regal Cinemas with 16 screens. About 80 percent of the retail space available at Westchester Commons has been leased, according to Connie Jordan Nielsen, a senior vice president with the Richmond office of Thalhimer/Cushman & Wakefield. “It’s slow, but it’s going,” says Nielson. “We’re just having to be creative to get deals over the finish line.”
Hargett is counting on the center’s prime location at the intersection of Route 60 (Midlothian Turnpike) and state Route 288 to help draw more tenants when the economy turns.