THE VOTE is nearly unanimous: The slowdown in the U.S. economy has taken its inevitable toll on retail markets in the Southeast. However, no one's singing the blues. And in the Gulf Coast region, especially in Louisiana and Alabama, developers and retailers are still doing quite well, thank you.

A regional overview by Greenville, S.C.-based land investment firm RealtiCorp shows retail demand strongest in several major metroplexes: Birmingham, Ala.; Atlanta; Greenville, S.C.; Raleigh, Charlotte and Winston-Salem, N.C.; South Florida; and Florida's Orlando-Tampa-St. Petersburg I-4 corridor.

Louisiana

While the RealtiCorp study did not include Louisiana, “Things are going very well there,” according to Brian Wechsler, vice president of new development and leasing with Houston-based Weingarten Realty Investors. “We've seen some continued population growth in the state,” Wechsler says. “Baton Rouge tends to be the hottest market as far as residential and job growth.”

New Orleans remains the largest retail market, although good development sites are becoming scarce. “But Veterans Highway will always be the dominant retail corridor,” Wechsler insists. In Shreveport, the area's first SuperTarget center, developed by Weingarten, opened strongly in July. Hammond and Houma, La., are also seeing retail growth, says Wechsler.

Alabama

Alabama continues to grow, especially in Birmingham and Hunstville, says Jim Wilson, who heads Montgomery-based Jim Wilson & Associates. “Those cities are probably in the top 30% of the nation in terms of income, and we did not lose population in the last census.”

“I think it's still going strong,” adds Don Kelly, senior executive vice president and partner in The Mitchell Co., based in Mobile, Ala. Kelly cites a number of positive signs in the state, including completion of the second and third phases of The Summit, Birmingham's first lifestyle center, and a new power center in Huntsville. “It's also very healthy in Montgomery,” he adds.

Speaking of Montgomery, Jim Wilson & Associates has just put in a lifestyle center and a power center in its 350-acre multi-use development, East Chase. Another lifestyle center, Montgomery-based Aronov's Eastern Shore Towne Center, is planned for the Mobile market. The center, which will feature 320,000 sq. ft. of GLA, opens in fall 2002.

Florida

While business is beginning to slow in Florida, retailers still seem to be cautiously moving forward, according to John Dowd, senior vice president of development for The Goodman Co., West Palm Beach, Fla. “Our most notable project is Freedom Commerce Center, an 855-acre mixed-use project in Jacksonville that will have 1.2 million sq. ft. of retail.”

The retail component includes both a more traditional community/power center and a lifestyle center, Dowd reports. “Florida is still in a positive growth mode in every major market we look at, but developers are re-thinking their plans to make sure they're doing the right thing.”

Robert Smith, RealtiCorp's regional partner in Orlando, notes that a large portion of the demographic growth in the state “seems to be occurring in the outlying suburbs, at the outer fringes of the larger cities. The migration of residents from the Midwest and South Florida toward the less dense Central Florida markets seems to be the driving force for new development opportunities.”

Georgia

The bloom may be off the rose a bit in Georgia, according to Hay Grayson, regional partner for RealtiCorp in Atlanta. “There are fewer opportunities for developers because they are all chasing the remaining retailers with expansion plans,” he says.

“The past few years have been booming in Atlanta, but with the technology decline there has been a noticeable increase in office vacancy rates; the apartment occupancy rates have been touched by the decrease in the number of jobs created each year; all of which are affecting the retail market.”

One project just beginning to get off the ground is the major Atlantic Steel redevelopment in downtown Atlanta. Mitch Jacoby, senior vice president of Jacoby Development Inc., the project's developer, says he is in discussions with a number of retailers, including Wal-Mart, for his retail facilities, and is “optimistic” about the prospects of landing the retail giant. He is already involved with Wal-Mart in several other cities in Georgia, including Albany, Villa Rica and Suwanee.

The Carolinas

North Carolina is generally feeling the effects of the economic slowdown, although “you've got different niche players looking in different markets,” says Marty Kotis, head of Kotis Properties in Greensboro. Rents have held steady, he says, although increases are harder to come by. “The slowed pace of development is also a measure of credit tightening,” he notes. “And people are not as anxious to build spec retail space.” The area does continue to benefit from a more moderate cost of living, he says, although the pending Wachovia/First Union merger could mean a loss of jobs. A number of projects are bringing new retailers to the market. Urban Retail Properties' 1.3 million-sq.-ft. The Streets at Southpoint will open in Durham on March 2002, bringing with it the state's first Nordstrom.

South Carolina, too, has experienced a slowdown, although “there are always bright spots,” insists RealtiCorp CEO and principal Dan Bruce. “Most of your stronger retailers are certainly still doing business.”

The Greenville market is strong, with retail emerging on the fringes of the city due to population and employment growth. The coastal area, including Charleston, is seeing significant activity, says Bruce. “Some users are also looking in the Columbia market,” he adds.

Steve Lewis is an Atlanta-based writer.

Southeast project listings

Project Name | City, State Developer | Headquarters Center | Project Type Current GLA* Completion Date* Anchors
Parkway Place
Huntsville, Ala.
CBL/Colonial Properties
Chattanooga, Tenn./Birmingham, Ala.
M|R 600,000 sq. ft. Fall 2002 Dillard's, Parisian
Colonial Promenade Hoover
Hoover, Ala.
Colonial Properties Trust
Birmingham, Ala.
S|N 192,000 sq. ft. June 2002 TBA
Vestavia Hills City Center
Birmingham, Ala.
AIG Baker
Birmingham, Ala.
S|R 452,000 sq. ft. Fall 2001 TBA
River Ridge
Birmingham, Ala.
Bayer Realty (Bayer Properties)
Birmingham, Ala.
P|N 353,176 sq. ft. Fall 2001 SuperTarget, Best Buy, Staples, Linens 'N' Things
The Summit (Phase II)
Birmingham, Ala.
Bayer Realty (Bayer Properties)
Birmingham, Ala.
L|E 593,068 sq. ft.
(164,669 sq. ft.)
4th Qtr. 2001 Parisian, Barnes & Noble, Saks Fifth Avenue
Eastern Shore Towne Center
Mobile, Ala.
Aronov Realty Management
Montgomery, Ala.
L|N 320,000 sq. ft. Fall 2002 TBA
Eastdale Mall
Montgomery, Ala.
Aronov Realty Management
Montgomery, Ala.
M|R 869,717 sq. ft. Fall 2001 Sears, Parisian, Dillard's
Festival Bay
Orlando, Fla.
Belz Enterprises
Memphis, Tenn.
M|N 1.1 million sq. ft. 2001 Bass Pro Shops, Vans, Ron Jon Surf Shop
Granada Shops
Naples, Fla.
Cortelis Co.
Miami, Fla.
P|N 270,000 sq. ft. August 2001 Expo Design Center, Pier One, Marshalls
Pier Park (Phase I)
Panama City Beach, Fla.
St. Joe Commercial
Jacksonville, Fla.
E|N 275,000 sq. ft. Summer 2002 Jimmy Buffett's Margaritaville
Publix at Bayside Lakes
Palm Bay, Fla.
The Sembler Co.
St. Petersburg, Fla.
C|N 65,000 sq. ft. Open Publix
Riverside Market Square
Jacksonville, Fla.
The Sembler Co.
St. Petersburg, Fla.
C|N 46,000 sq. ft. Spring 2002 Publix, Quizno's, Mail Boxes Etc., Starbucks
4000 Ponce
Coral Gables, Fla.
CMC Group Inc.
Miami
MU|N 32,000 sq. ft. 2002 TBA
Mitchell Ranch Plaza
New Port Richey, Fla.
AIG Baker
Birmingham, Ala.
S|N 541,000 sq. ft. Summer 2002 TBA
Columbus Park Crossing
Columbus, Ga.
CNM Associates
Atlanta
P|N 760,000 sq. ft. Spring 2002 TBA
McDonough Marketplace
McDonough, Ga.
JDN Realty Corp.
Atlanta
S|N 418,664 sq. ft. Summer 2002 TBA
Mill Creek
Buford, Ga.
North American Properties
Cincinnati
P|E 560,000 sq. ft.
(30,000 sq. ft.)
Spring 2002 Costco, Marshalls Ross Dress For Less
Stonecrest Marketplace
Lithonia, Ga.
North American Properties
Cincinnati
P|N 450,000 sq. ft. Spring 2002 Babies 'R' Us, Staples Linens 'N' Things
Cruse Crossing
Cumming, Ga.
North American Properties
Cincinnati
N|N 75,000 sq. ft. Winter 2002 TBA
Centre at Evans
Evans, Ga.
Wyatt Realty Services Inc.
Aiken, S.C.
S|N 253,683 sq. ft. February 2002 Wal-Mart
Columbus Park Crossing
Columbus, Ga.
Ben Carter Properties
Atlanta
P|N 350,000 sq. ft. August 2002 Circuit City, Staples, Bed, Bath & Beyond
Target @ Cumming
Cumming, Ga.
The Sembler Co.
St. Petersburg, Fla.
P|N 238,000 sq. ft. March 2002 Target
Henry Town Center
McDonough, Ga.
The Sembler Co.
St. Petersburg, Fla.
P|N 650,000 sq. ft. July 2002 Target, BJ's Wholesale, Belk
The Avenue Peachtree City
Peachtree City, Ga.
Cousins Properties
Atlanta
F|N 155,000 sq. ft. March 2001 Ann Taylor Loft, Chico's, Williams-Sonoma
Camp Creek Marketplace
Atlanta
North American Properties
Cincinnati
P|N 596,000 sq. ft. Spring 2003 Target
Salem Road Station
Atlanta
Cousins Properties
Atlanta
N|N 67,270 sq. ft. October 2000 Publix
Atlantic Station
Atlanta
Jacoby Development Inc.
Atlanta
MU|N 1-2 million sq. ft. TBA TBA
Griffin Crossroads
Griffin, Ga.
Halpern Enterprises
Atlanta
S|N 500,000 sq. ft. 2002 Wal-Mart Supercenter
Clearview Mall
Metairie, La.
Stirling Properties
Covington, La.
R|R 720,411 sq. ft. Fall 2002 Maison Blanche, Sears
Palace Centre
Hammond, La.
Stirling Properties
Covington, La.
L|N 74,000 sq. ft. Open TBA
Siegen Lane Marketplace
Baton Rouge, La.
Mall Properties Inc.
New York
P|E 1 million sq. ft. Open Lowe's, Sam's Club, Wal-Mart SuperCenter
Colonial Promenade Bossier
Bossier City, La.
Colonial Properties Trust
Birmingham, Ala.
S|N 200,000 sq. ft. February 2002 TBA
Dogwood Festival Market
Jackson, Miss.
Aronov Realty Management
Montgomery, Ala.
L|N 300,000 sq. ft. April 2002 McRae's, Borders, Old Navy, Linens 'N Things
Triangle Town Center
Raleigh, N.C.
The Richard E. Jacobs Group
Birmingham, Ala.
M|N 1.3 million sq. ft. February 2002 TBA
Southeast Plaza
Goldsboro, N.C.
Ivey/Swain Associates LLC
Wilmington, N.C.
N|N 49,400 sq. ft. Open Food Lion, Dollar General
The Shops at Monk's Corner
Wilmington, N.C.
Monk's Corner Associates LLC
Wilmington, N.C.
S|N 18,270 sq. ft. Open Sprint PCS, Great Clips
Millpond Village
Cary, N.C.
Konover Property Trust
Cary, N.C.
MU|N 198,000 sq. ft. Open Lowe's Foods, Great Clips
Golden Gate Shopping Center
Greensboro, N.C.
Lat Purser & Associates
Charlotte, N.C.
S|RD 178,045 sq. ft. Open Food Lion, Harris Teeter
Kenilworth Commons
Charlotte, N.C.
Edens & Avant
Columbia, S.C.
N|E 63,341 sq. ft.
(15,000 sq. ft.)
1st Qtr. 2002 Harris Teeter, MailBoxes Etc.
Tanger Outlet Center
Myrtle Beach, S.C.
Tanger Factory Outlet Centers
Greensboro, N.C.
O|N 400,000 sq. ft. Spring 2002 Liz Clairborne, Reebok, VF Factory Store, Mikasa
The Mall of South Carolina
Myrtle Beach, S.C.
CBL/Burroughs & Chapin
Chattanooga, Tenn./Myrtle Beach, S.C.
M|N 1.3 million sq. ft. Fall 2003 Belk, Dillard's, Sears
West Ashley Town Center
Charleston, S.C.
Realticorp/Food Lion-Ravenel
Greenville, S.C./Charleston, S.C.
N|N 78,000 sq. ft. 2000 Food Lion
Florence Mall
Florence, S.C.
Edens & Avant
Columbia, S.C.
N|E 312,928 sq. ft.
(30,000 sq. ft.)
2002 SteinMart, Peebles, Books-A-Million
Northpointe
Durham, N.C.
Sodi Inc./Armada Hoffler
Durham, N.C./Chesapeake, Va.
P|N 489,500 sq. ft. 1st Qtr. 2001 Kroger, PETsMART, Ross, The Home Depot, Costco
Grand Ridge Resort Outlet Center
Waynesville, N.C.
Jones Lang LaSalle Retail
Atlanta
O|N 750,000 sq. ft. Summer 2002 TBA
The Streets at Southpoint
Durham, N.C.
Urban Retail Properties Co.
Chicago
M|N 1.3 million sq. ft. March 2002 Nordstrom, Belk, Hecht's, JCPenney, Sears
Peabody Place Ent. Complex
Memphis, Tenn.
Belz Enterprises
Memphis, Tenn.
E|N 300,000 sq. ft. Open Jillian's, AnnTaylor Loft
Tanger Outlet Center
Sevierville, Tenn.
Tanger Factory Outlet Centers
Greensboro, N.C.
O|E 339,600 sq. ft.
(14,352 sq. ft.)
November 2000 Bombay Co.,
Waterford Wedgewood
Center Type: E=Entertainment Center, S=Strip Center, N=Neighborhood Center, C=Community Center, M=Regional/Superregional Mall, P=Power Center, O=Outlet Center, L=Lifestyle Center, F=Fashion/Specialty Center, MU=Mixed-Use Development.
Project Type: N=New Project, E=Expansion, RN=Renovation (updating look, refacing, common area or amenities upgrade), RD=Redevelopment (demalling or remerchandising).
Completion Date*: Subject to change.
Existing/Planned GLA (Expansion GLA): GLA=Gross Leasable Area. TBA=To be announced/unavailable.

The winner and still champ…Wal-Mart!

It's not even close. Whatever city you visit, whoever you ask, Wal-Mart stands out as the dominant retailer in the Southeast. “Every time you turn around there's a new Wal-Mart SuperCenter — and they don't take prisoners,” says Jim Wilson, head of Montgomery, Ala.-based Jim Wilson and Associates.

Value-oriented retailers dominate the market, with familiar names including Target and Costco still going strong. Home-improvement retailers The Home Depot and Lowe's also continue to prosper, as does department store chain Kohl's, a relatively new player in some Southeastern markets that looks to be a real comer.

Of course, with the economy slowing, some retailers are bound to suffer. Store closings are becoming more commonplace — some in response to local market pressures, others a part of national initiatives. Harris Teeter, for example, abandoned the Atlanta market but is expanding in other areas. On the other hand, OfficeMax and the Cooker restaurant chain, among others, are involved in nationwide retrenchment programs, and grocery chain Bruno's is now in Chapter 13.
— Steve Lewis

Southeastern retail market conditions: CBD & suburban areas

Market Area Inventory
(sq. ft.)
Vacancy
Rate (%)
Vacancy
(sq. ft.)
Mall
Vacancy
Rate (%)
Avg. Net
Absorption
(sq. ft.)
GAFO*
Sales Per
Household
Total under
Construction
(sq. ft.)
GLA
Per Capita
2000 (sq.ft.)
Atlanta 122.8 mil 11 13.5 mil 10 3.5 mil $17,891 18.2 mil 27.24
Birmingham, Ala. 18.6 mil 6.9 1.28 mil 6.9 -107,918 $14,274 1.39 mil 18.56
Charlotte, N.C. 23 mil 10.9 2.5 mil 1.8 960,568 $15,335 6.75 mil 24.74
Columbia, S.C. 13.99 mil 9 1.25 mil 5 376,250 $16,318 750,000 24.74
Memphis, Tenn. 26.99 mil 12 3.23 mil 7.8 438,523 $16,242 1.8 mil 23.62
Miami 39.16 mil 7 2.74 mil 6.5 483,750 $15,811 11.5 mil 18.48
Nashville, Tenn. 28.5 mil 6.4 1.82 mil 6.4 1.18 mil $15,871 12,420 23.6
New Orleans 22.7 mil 8.5 1.93 mil N/A 519,500 $15,871 1.73 mil 15.78
Orlando, Fla. 41.62 mil 7.4 3.08 mil 2 1.54 mil $17,286 1.54 mil 28.8
Tampa 58.5 mil 7.5 4.38 mil N/A 777,500 $14,042 1.26 mil 22.89
Source: Integra Realty Resources Viewpoint 2001. GLA per capita provided by National Research Bureau.
*GAFO (General, Apparel, Furniture and Other) sales provided by Claritas Data Services
.