Thursday, September 3, 2009

Savannah Retail Space: A mixed bag

Walking briskly through Oglethorpe Mall last weekend (I try to avoid it like the H1N1), I had a hard time weaving my way through teens, tennis-dress-clad moms and dodging strollers..

You wouldn't have thought that we were in "the worst of times." The crowd could've been caused by the back to school rush but, since February, the mall has seen a steady increase in traffic.

According to Phillip McConnell, Oglethorpe Mall General Manager, stores are reporting a 3-4% drop in sales from last year. Not sure how last year compared to more booming times, but 3-4% should be pretty favorable compared to other parts of the region & US.

The Southside vacancy rate has been helped by the 32,000 SF hhgreg filling the former

Linen & Things space but, still hovers around 16-18%. Large "Box" space is around $10/SF NNN (tenant pays taxes, insurance & upkeep expenses as well) with smaller spaces in the low-mid $20's/SF NNN.

Downtown / Historic District

Long time downtown retailers, both national & local, have seen a significant drop in sales but, say they have had a recent uptick in activity. Quality restaurants downtown are still doing good overall. As far as new tenant demand, I always get requests for food & service (spas, designers) tenants but, have had very little inquires for hard goods retailers. There are several vacant storefronts but, I think, caused as much by half-bake business models as the economic slow down. Rates on average are around $18-20/SF NNN with a couple exceptions of $30/SF NNN around News Place and the AVIA hotel.

We still have downtown retail development activity.

The July opening of the 9 story Bohemian Hotel, rooftop bar (photo left) & restaurant has been a very busy draw Thurs-Sat night. Springhill Suites Hotel on Oglethorpe St. should open soon. According to the Convention & Visitors Bureau, Hotel Occupancy Rates are only down by 10%.

Something that will "stir" interest in the overlooked east end of Broughton Street, The Melting Pot, opens September 23rd.

It seats 138, plus 1o bar seats &

includes meeting rooms & a hi-def AV/Internet system.

Westside Retail developers have slowed significantly from the boom of the last few years but, are following through with projects that have been funded. Publix on Pooler Parkway opens sometime Q4 '10-Q1 '11. Food Lion is active in the corridor with recent openings in Port Wentworth & Dean Forest road at the new Garden City Town Center(photo below). Walgreens is pursuing sites in the area but, smaller retail tenants (1000-1500sf) that fill strip center space are tougher to come by. Because of that building boom, vacancy rates are around 30-35%. Rates for big box are around $10 NNN smaller spaces range from $14-22/SF NNN.

Across all our markets, Retail Tenants seeking build out improvement money, free rent & other terms are certainly being pursued as landlords try to fill up spaces to stop the bleeding. The next 12-18 months could, unfortunately, still prove to be challenging. My Retail Listings: CLICK ME!

But...there is always a but when it comes to Savannah...we are in an excellent position for when the spicket turns back on, the economic engine of the Ga Ports Authority & military bases and our treasured coast line, combined with our relatively low cost of living, will help us attract (& hopefully capture) business as well as those Mid-West & North-East retirees that will finally be able to sell there homes. Some proof: CNNmoney.com just named Savannah #8 in their Top 25 Places to Retire.


photos courtesy: hhgregg, The Melting Pot, Rex Benton (I stopped off for a drink for research)
Rex Benton is a Savannah Commercial Real Estate Agent for Mopper-Stapen, Realtors. He can be reached at the downtown office of Mopper-Stapen, Realtors at 912-238-0874 or our website. Office, Industrial, Retail & Investment properties for sale or lease.

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