Regional retailing vacancies fill slowly

By  Tim Feran

The Columbus Dispatch Sunday February 26, 2012 9:54 AM

FILE PHOTO

Circuit City closed 567 stores when the consumer-electronics chain was liquidated in 2009. Other retailers have moved into those vacant stores to improve their markets.

 The number of vacant stores in Columbus could reach a five-year low in 2012, but the reasons don’t exactly add up to good news.

 The prediction is included in a report, by Marcus & Millichap Real Estate Investment Services, which attributes the shrinking vacancies to several factors. Tops among them: Retailers are still slowly filling up space that was built before the recession.

At the same time, the report says, construction of new retail space is expected to remain well below the historical average.

Right now, real-estate companies are focused on filling spaces vacated by other retailers, said Erin Patton, director of the national retail group for Marcus & Millichap.

 “That’s really a trend you’ll see nationwide,” Patton said. “It’s not necessarily a bad thing, because of the market we’re coming out of. We lost a lot of different stores, a lot of concepts, that couldn’t keep up with their rent. It’s a very good thing to stabilize the retail real-estate market.”

The expectation of below-average new construction doesn’t surprise one commercial real-estate veteran.

“Columbus is actually kind of over-retailed,” said Rob Click, senior managing director of CBRE Brokerage Services. “We have a very significant amount of retail space for our population. The number of bodies can just support only so much retail.”

Many of the large retailers that recently signed leases in central Ohio have chosen areas with healthy population growth and relatively high household incomes, including Polaris, Easton and Westerville.

Last week, for example, the outdoor retailer Cabela’s announced that it will open an 80,000-square-foot store — its first in Ohio — in the Polaris area.

“The biggest impact is going to be the Cabela’s deal recently announced,” Click said. “That’s probably the single biggest retail addition that’s going to happen this year.”

Grocer Earth Fare’s move into a 30,000-square-foot space at the Gemini Place Towne Center in Polaris will be another confirmation that the neighborhood is one of the top retail areas in Columbus, Patton said.

The Marcus & Millichap report says that the home-improvement retailer

Menard’s move into a 240,000-square-foot space at the site of the former Northland Mall last year should help revitalize the Morse Road corridor. It also notes that a WalMart opening in Westerville by midyear should increase traffic in that area, too. Both moves should attract smaller tenants to vacant spaces nearby.

The large number of vacancies that arose as Circuit City, Linens ’n Things and other chains closed stores led other retailers, including discounters, to move up to better locations, the report says, adding that . that trend should continue, albeit at a slower pace.

“It was a very opportunistic time for Big Lots or

Ollie’s, among others, to gain market share,” Patton said. “There are still opportunities out there for players who want to do it. The vacancy rate is still fairly high.”

tferan@dispatch.com

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Regional retailing vacancies fill slowly