2023-05-10 CC Packet - Laserfiche WebLink

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LOC101 CONSULTING General Merchandise Stores and Community Shopping Centers The closest general merchandise store is Target in Lino Lakes. The 162,000-square foot store has a full grocery offering along with more traditional general merchandise. It is located 2.8 miles from Downtown Centerville, but the drive is longer because the route is through the Rice Creek Chain of Lakes Preserve. This type of shopping center and retail node is called community retail. In addition to the general merchandise retailer —Target or Walmart—the shopping centers are often anchored by a grocery store or pharmacy. These retail nodes serve much larger trade areas, with between 75,000 and 150,000 people within three to six miles of the node. ■ The Centerville PMA has an additional community retail node in Forest Lake about 8.0 miles north of Downtown Centerville. There are also community retail nodes located in Blaine and Vadnais Heights, just outside of the PMA. Regional Malls and Regional Shopping Nodes The Downtown Centerville PMA is served by two regional malls —Maplewood Mall in Maplewood and Rosedale Center in Roseville. Both have about one million square feet of retail space and serve as anchors to larger retail nodes surrounding their locations. (These locations are not shown on the map.) Regional malls are traditionally anchored by two or more department stores and serve 100,000 to 500,000 people within five to 10 miles. This shopping format is evolving to meet changing consumer demands. Department stores are struggling and are no longer dependable anchors. Many mall owners are looking to add traffic drivers like entertainment and general merchandise and grocery stores. Others are looking to create mixed -use centers by adding residential development. Market Analysis for Downtown Redevelopment City of Centerville Economic Development Authority April 3, 2023 Market Conditions for Retail Commercial Real Estate in the Metro Area Responding to increased consumer expenditure, local and national retailers have sought additional retail space. While at the same time, commercial real estate developers faced significant headwinds with rising construction costs and supply -chain challenges, resulting in fewer new projects being developed to respond to this demand. In fact, with demolitions and redevelopments, the base inventory of retail space in the Metro Area actually contracted significantly. These factors have kept retail vacancy rates low and increased rents at existing properties. Using data from Costar —a national commercial real estate data service used by commercial brokers and retail site selectors —LOCI Consulting reviewed retail real estate data for the Twin Cities Metropolitan Area (referred to by Costar as the Minneapolis Market). Costar data is not perfect. It does not include vacant data that is not being listed by brokers. Therefore, it is likely an underrepresentation of the actual vacancy rate. Spaces that may be currently closed because of the pandemic are not considered vacant because they are not being listed. Further, Costar data includes many single -user properties in its data that are often not considered in other sources. As a result, the denominator tends to be larger, so vacancy rates are lower than other sources. Figures 4.1 and 4.2 show average retail lease rates per square foot per year, vacancy rates, and absorption for the Minneapolis -Saint Paul market. The vacancy rate for retail commercial real estate space in the Metro Area was 3.4% in the fourth quarter of 2022. ■ Vacancies have remained low in the market as new supply has primarily been built -to -suit for a particular retailer. Few large shopping centers have been developed in the market, and the ones that have been built already have most of their space committed. Page 166