CT retail market active on all fronts.
Furthermore, a partial explanation for the proliferation of supermarket chains, pharmacies, soft- and hard-goods stores and large discounters and wholesale clubs is the change in ownership and financing that has established a new trend. We've seen a marked increase in the number of investments that are owned by REITs and by the retailers themselves. In general, the ownership of retail centers has changed significantly in the last few years.
Major shopping malls such as Taubman's Stamford Town Center and West Farms Mall in West Hartford, and many of the former Rosenshein properties, along with two large 1994/95 sales: Danbury Square (126,000 square feet) and Meriden Square (292,000 square feet) are all owned by REITs. Nearly all the new food chains, Wal-Marts and Kmarts in Connecticut are owned by the retailer or are a venture between the retailer and the developer, which is a further move toward greater institutional ownership of commercial real estate.
With typically more restrictive zoning for retail development and less retail zoned land available (compared with New Haven, Hartford and New London counties) Fairfield County nevertheless has experienced explosive construction in the retail sector, particularly when compared to office or industrial construction. Stamford, especially, anticipates an extensive renovation and expansion of the Ridgeway Shopping Center, with Stop & Shop as the major anchor. Future developments include a new retail development in Commerce Industrial Park at Exit 6, and a multi-level center with power center type tenants at the "hole in the ground" at Tresser Boulevard and Greyrock Place in downtown Stamford.
In Norwalk, developments under construction or about to start construction include Home Depot and Staples on Connecticut Avenue; and a Stop & Shop/Bobs on the former Pitney Bowes site where Main Avenue intersects the Merritt Parkway at Exit 40.
In Fairfield, just off Exit 22 on the Post Road, a center with MarshalIs, Office MAX and CVS is under construction, while at an adjacent site, Stop & Shop is seeking approvals for a significant expansion. Across the street, Grand Union has vacated (probably in anticipation of Stop & Shop's expansion).
In Bridgeport, Home Depot recently opened a store just off Boston Avenue opposite Beardsley Park. Fairfield County's only Wal-Mart is under construction on an adjacent site on Bridgeport Avenue in Shelton; Kmart recently opened in New Milford.
New retail development has been spurred by the increasingly competitive grocery industry. Super Stop & Shop is challenged by newcomer Shaw's, Big Y, and Edwards. Currently Shaw's has stores nearing completion in Manchester, Newington, Bristol, Vernon and New Britain, with more sites targeted. Big Y continues to establish its base in Connecticut with stores underway in Norwich and Naugatuck, which follow openings earlier this year of their Plainville, Monroe, and Killingly stores.
Edwards is upgrading existing stores and has added new locations in Windsor and Glastonbury. Waldbaum's persists in fortifying its market share by closing stores in weaker markets and renovating and expanding their stronger outlets.
Non-grocery anchored retail developments are also gaining presence. In Enfield, a new Home Depot has stimulated redevelopment of State Line Plaza. And in East Windsor, the new Showcase Cinema soon will be joined by a Wal-Mart on Route 5. Kmart is constructing a 120,000 square-foot store in Windsor to replace its older, smaller store. Joining Edwards at the new location, Kmart will anchor a retail center with an additional 60,000 square feet of space.
For the past few years, the retail market east of Hartford has garnered much attention because of the explosive growth of retail in the Manchester area. Since 1990, approximately two million square feet of retail space has been built in this sector. Many of the projects are one to three years old, and are successful. During 1995, a new Circuit City joined the Bobs/Marshalls Shopping Center, while Home Place, which opened earlier in the year, has been joined by Pet Supply Plus and Noodle Kidoodle.
Another major center is scheduled for the intersection of Slater and Hale in Manchester. Free-standing restaurants and medium-size box retailers here as elsewhere compete for the dwindling sites appropriately zoned for retail development.
Expansion and renovation are the trends at several established malls and retail strips. In West Hartford/Farmington, the successful West Farms Mall is experiencing a resurgence of activity as it expands to accommodate Nordstrom's Department Store, scheduled for completion in 1997. The West Farms Shopping Center, adjacent to the mall, is fully renovated and has added Linens N Things and Pet Supply Depot. In addition, a free-standing Office Max has been built on the property next door.
Also in West Hartford, the New Park Road area is re-emerging as a retail market as demolition of the former Colt site makes way for a new Home Depot, BJ's Wholesale Club and Auto Palace. They will join a Super Stop & Shop which opened last year on the former Royal Typewriter factory property, just north of the site.
On the Berlin Turnpike, the extremely competitive consumer electronic market heats up as Bernies, Nobody Beats The Wiz, Lechmere, Tweeter and others battle for the consumer dollar along with Circuit City, which opens this Fall in Newington.
Other Turnpike activity includes redevelopment of the former Pike Drive-In site, which Shaw's and the region's first Media Play store will anchor. Newington Fair, anchored by Caldor and Service Merchandise, offers new leasing opportunities to medium-size retailers. And Melville, Kmart and Wal-Mart continue to pursue viable property.
New Haven County
In New Haven County, the discount department store stand-off continues, with simultaneous construction of a Kmart and Wal-Mart on Route 5 in Wallingford, adding almost 250,000 square feet to a market containing Caldor and Bradlees.
Connecticut's first Super Kmart Center, a 172,000 square-foot department/grocery store concept, is opening on Route 80 in New Haven. It anchors a property offering 195,000 square feet of available, buildable retail.
Retail construction is booming in Hamden as well. The Dixwell Avenue Shopping Center will be anchored by Super Stop & Shop, with Staples, Toy Works, Old Navy Gap, and Pep Boys on board. Across the street, Hamden Mart's renovation will house Bobs Stores, (which will occupy the former Stop & Shop and adjacent space.) Concurrently, Hamden Plaza plans to renovate to accommodate new tenants.
Two shopping centers are planned for West Haven and Orange. In particular, Beckenstein Enterprises, a major developer/owner based in East Hartford, recently purchased a 20.7-acre parcel for a 134,000 square-foot retail strip in Orange, anchored by Christmas Tree Shops. Also, the former SNET site on the Post Road in West Haven will accommodate 250,000 square feet, with Shaw's food store as the anchor. These shopping centers will add substantial square footage to an already crowded market.
Middlesex/New London Counties
In 1996, two retail outlet centers will open off Route I-95 in Clinton and Westbrook, adding almost 400,000 square feet to the shoreline market. In the southeastern corner of the state in Waterford, BJ's Wholesale Club and a new theater complex join the Crossroads Shopping Center, where Bobs and Bernies now occupy the former Wholesale Depot space. A Wal-Mart next door will extend the peripheral development of the Crystal Mall area, southeastern Connecticut's major regional mall.
Although retail construction has been one of Connecticut's most active real estate trends in the last few years, the lack of increase in the state's population does not bode well. We have seen already the signs of downsizing, consolidation and bankruptcy (Bradlees, Caldor and NBO).
In the food sector, stores in secondary locations or under 25,000 square feet may not survive. Similarly, we anticipate some fallout with large drug chains squeezing out smaller operations and entrepreneurs.
Wholesale clubs, too, are showing the effects of a crowded market: Pace closed stores in Enfield and Manchester, and Price Club has closed in New Britain, thus placing more than 335,000 square feet of possible "change of use" retail on the market. However, as building, renovating and expanding continues, closings and consolidation are inevitable tradeoffs.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Focus On: Retail Markets; Connecticut|
|Author:||Dunne, Jeffrey R.|
|Publication:||Real Estate Weekly|
|Date:||Oct 4, 1995|
|Previous Article:||Tax escalation clause.|
|Next Article:||Retail forecast: only the strong will survive.|