Sam Cummings, left, and Scott Wierda of CWD Real Estate Investment see the new Bucktown development as an economic catalyst for the Grandville area. Photo by Johnny Quirin
The vacancy rate in the metro area’s retail real estate market fell during the third quarter, as more space was absorbed.
According to Colliers International of West Michigan, unoccupied space accounted for 9.4 percent in the retail market at the end of September. Going into the three-month period, it was 9.6 percent. Total net absorption reached 57,600 square feet. That’s a decent number considering many leases, especially for pizza places and sandwich shops, are often for less than 2,000 square feet.
In all, Colliers International said the retail market had 52 sales and 52 leases during the third quarter. Both figures were up from the 41 sale transactions and 51 rental agreements that occurred a quarter earlier. The average sales price was $42.50 a square foot, while the average rental rate was $11.64 a foot during the last quarter.
“The Rivertown Corridor has been, by far, the most active retail submarket over the past quarter. The Bucktown development is attracting a wide variety of retailers that are securing space in the newly constructed strip centers,” read the firm’s report.
CWD Real Estate Investment is developing Bucktown, which the firm named in honor of longtime and retiring Grandville Mayor Jim Buck, who will be honored for his public service at a breakfast next Monday by the Grand Valley Metro Council.
The 45-acre development in Grandville, not far from RiverTown Crossings Mall, landed the area’s first Cabela’s sporting goods store and a Target as anchors. CWD Real Estate is building another 35,000-square-foot structure that should be finished next year.
Not far from Bucktown, Gordman’s is planning to erect a 50,000-square-foot clothing and home décor store — its first in Michigan, and Jo-Ann Fabrics opened a new outlet at 3233 Century Center. That move filled one of the last remaining vacant big-box stores in the corridor.
“Other historically active submarkets like 28th Street SE and Alpine (Avenue NW) are still garnering high levels of interest. However, there is a significant lack of space to satisfy the demand,” read the Colliers report, which added that limited space is putting pressure on developers to ask for zoning changes for underused existing properties with the intention of building on those sites.
“The redeveloped Centerpointe Mall currently sits at 97 percent occupied, which is the highest percentage since the mall first opened.”
The Colliers report said the region continues to draw attention from national retailers, with food sellers like Jimmy John’s and Subway making up the majority of businesses showing interest here.
“The specific size and location requirements for these tenants are all very similar, calling for 1,000 to 3,000 square feet located on the corner of ‘main and main.’ This competitive situation poses a problem for penetrating new submarkets that already bear very low vacancy rates.”
Colliers reported 170,517 square feet of retail space has been absorbed in the market over the first three quarters this year. At the same nine-month mark last year, 97,315 square feet was taken. The firm projects that more than 200,000 square feet will be occupied by the end of the year.
The metro retail market has 554 buildings and more than 18 million square feet of usable space.