Hobby Lobby deal a sign that retail development is coming back to life
Retail chases rooftops, the saying goes.
So it wasn’t exactly shocking that developers shelved most new shopping center deals after the housing market and broader economy went into a free-fall four years ago.
The lengthy drought might be ending in the Charleston region.
“We’re starting off 2012 strong,” said commercial real estate broker Blair Belk, who specializes in leasing and selling retail space for the Charleston office of Lincoln Harris.
One of the early signs of the thaw emerged last week.
National arts-and-crafts supplier Hobby Lobby announced it will build a 55,000-square-foot freestanding location at Six Mile Marketplace on U.S. Highway 17 in Mount Pleasant.
The chain is one of the first major newcomers to the local retail scene in years to shell out the big bucks it takes to bring a sizable new store out of the ground.
The Oklahoma City-based retailer said the store will create 35 to 50 jobs paying $13 an hour for full-time workers and $9 for part-timers, not to mention the temporary construction jobs the project will generate.
The deal coincides with a traffic-driven debate over whether Mount Pleasant should change its zoning to allow a “big box” shopping center on the Gregg Tract, a 38-acre property on Highway 17 about two miles south of the Hobby Lobby site and across from Mount Pleasant Towne Centre.
Retail developers are starting to dust off building plans again as vacancies rates edge down, partly because practically no new space has been added to the shopping center stock since the global financial crisis of 2008.
Also, dark storefronts are gradually starting to attract occupants now that the economy looks to be on the upswing.
On the development front, restaurants have been particularly active in the wake of the recession. To wit: A Cracker Barrel Old Country Store and Restaurant is being built in the same shopping center as the proposed Hobby Lobby.
As that deal suggests, the brick-and-mortar retail resurrection seems to be starting in Mount Pleasant, mainly because the East Cooper area is drawing more residents with above-average household incomes. But merchants and builders also are looking elsewhere.
In Summerville, for example, Gramling Brothers Real Estate & Development Inc. plans to break ground in the next few weeks on Azalea Station, a 13,000-square-foot retail center to be built near the larger Target-anchored Azalea Square.
“I think the soil conditions are good for retail development again, finally,” said Mikell Harper, vice president of business development for the Charleston-based builder.
Even so, many cities looking to lure popular merchandisers are dealing with a chicken-and-egg dilemma, said Tony Kassis, one of the developers of the Six Mile shopping center that will house Hobby Lobby’s future store.
“There is problem I’d say that most markets in the country are facing: There is not enough product. You have to that have development to occur,” he said.
The rub is that many recession-scarred lenders are still trigger-shy and unwilling to touch shopping center deals. At the same time, retailers that are grasping the expansion ring are doing so with kid gloves.
The ‘B’ word
Kassis was almost hesitant when trying to zero in on why retail development is showing signs of a rebound.
But like politics, all real estate is local. Kassis noted that Boeing Co. in fairly short order has created more than 6,000 jobs to help it assemble the 787 Dreamliner at its new $750 million plant at Charleston International Airport. The first jet rolled off the line about 10 days ago.
“When a major manufacturer like Boeing shows up, other businesses show up,” Kassis said.
As Mount Pleasant’s town administrator, Eric DeMoura is on the front lines of the nascent retail recovery. He, too, senses more optimism, and he noted that almost every key economic indicator the town tracks is moving in the right direction.
Likewise, Mount Pleasant’s planning staff is seeing more retail representatives swing by the office, both developers and tenants.
“And we are delighted about it,” DeMoura said.
Reach John McDermott at 937-5572.