Southeast Real Estate Business

OCT 2016

Southeast Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Southeast United States.

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Page 37 of 56 Southeast Real Estate Business • October 2016 • 37 R E TA I L S N A P S H O T: H U N T S V I L L E SEVERAL NEW RETAIL DEVELOPMENTS ARE IN THE WORKS IN HUNTSVILLE Huntsville has historically been a re- cession–resistant market, with signifi- cant government spending, research, and development as major drivers of the economy. That said, the Great Re- cession took its toll like in most places, and like many places Huntsville seems fully beyond the dark days of the re- cent past. Developments that did not work now seem to work, investors are buying and consumers are spending. The Huntsville retail market offers nearly 14 million square feet of space, and the vacancy rate, considering all submarkets, is about 12 percent, an im- provement by nearly a point over last year's rate. Rents in Huntsville trend to be the highest in the state, at an aver- age of about $13.60 per square foot. The trend for rates for newly constructed space, though, is skyrocketing to rates common in other parts of the Southeast, circa $30 per square foot and more. There are a number of new and in- novative projects now under develop- ment or at the cusp of announcement. Counting most of the new develop- ments in this market of about 450,000 people there are at least 18 new devel- opments of either retail or mixed-use that are underway or about to start. A small but creative development is the Garage at Clinton Row, which will feature the development of the ground floor of a city parking deck into over 8,000 square feet of retail space. Sev- eral small non–food boutiques and vendors, including ladies' and men's boutiques, will be tenants. Clinton Row Partners, a local enterprise, is develop- ing the project. Also in downtown Huntsville will be City Centre, developed by Huntsville- based RCP Properties. YRG Manage- ment LLC will coordinate construction of an AC by Marriott hotel, and the project will also include 31,000 square feet of retail space in addition to 270 apartment units and parking decks. Another creative development open- ing now is Campus 805, a redevelop- ment of a former junior high school just west of downtown. Keeping most of the structure, Schrimsher Properties has developed for Bubba's Silver Spoon Catering, Stone Event Rental, Dough's Nut Bakery, Liberty BYO Homebrew Supplies, Yellowhammer Brewing and other interesting tenants. Also downtown, a longtime rede- velopment of Heart of Huntsville Mall known as Constellation is finally launching. Developed by a partner- ship of McLain Development LLC and Heartland Real Estate Associates, the 519,000-square-foot mixed-use devel- opment should be under construction in late spring 2017. The development will feature a second hotel, joining the existing SpringHill Suites, 20,000 square feet of retail, 20,000 square feet of restaurants, 216,000 square feet of of- fice space and 239 multifamily residen- tial units. An ambitious redevelopment is the proposed renaissance of the former Madison Square Mall, the market's largest mall spanning over 1 million square feet. Tenants are vacating and RCP Properties plans a large mixed-use project known as Mid City Huntsville on the nearly 100-acre tract, complet- ing in perhaps 2022. RCP bought the entire interest of the prior owner, CBL & Associates, for $5 million in 2015. Re- tailers and other owners have owned other portions of the site. Another long-term project is Town Madison, situated at Madison Bou- levard and Zierdt Road in the city of Madison. While this project awaits construction of a proposed interstate exchange, plans are underway for 675,000 square feet of retail and other space. Local developer Louis Breland, in partnership with others, is planning the project. A final long-term project is the con- tinuing development of The Gateway, a mixed-use development by Corporate Office Properties Trust. This is largely an office development just outside the gate of Redstone Arsenal, but the proj- ect will also feature a hotel and up to 124,000 square feet of retail space as it is constructed. Kroger has had major recent impact in this market with two new large stores. One, at U.S. Highway 72 and County Line Road, is under construc- tion and will feature 133,000 square feet of grocery and retail space. A second Kroger, at Wall Triana Highway and Browns Ferry Road, has just opened, with an expected 114,000 square feet of retail space. Walmart continues its march of dominance in the market with its 15th store in Madison County. Recent open- ings on Winchester Road in the eastern part of the county and Hazel Green in the northern part of the county seem to place an even distribution of stores across the market for Walmart. Retail brokers in the marketplace will generally opine that the market has moved from just "better," where it has been for some time, to "good." There is not universal agreement that all submarkets or retail product types are successful now, but big box and restaurant developments are faring well. Supply of space is tightening, but with 18 new developments, there should be good new product available, although at high prices for this new construction. D. Scott McLain, CCIM Managing Broker, Coldwell Banker Commercial McLain Real Estate D E S I G N / B U I L D   |   G E N E R A L C O N S T R U C T I O N   |   C O N S T R U C T I O N M A N A G E M E N T Serving Clients Nationwide Clinton Row Partners will redevelop a city parking deck to feature 8,000 square of retail space below parking spaces in a project known as Garage at Clinton Row. Supply of space is tightening, but with 18 new developments, there should be good new product available.

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