Stores high on Huntsville
Friday, June 01, 2007
By MARIAN ACCARDI
Times Business Writer marian.accardi@htimes.com
McLain gets 'a lot of bites' for project at retail convention
Just back from his 22nd trip to the International Council of Shopping Centers annual spring convention, Huntsville commercial developer Scott McLain is optimistic about the local retail scene.
"We're well-positioned and well-recognized in the region as a profitable and prosperous retail market," said McLain. "Retailers have discovered the Huntsville market and are very interested in investing here.
"We're clearly on the map."
That's good news for McLain, who's searching for retail tenants for a planned $150 million development at the old Market Square site near downtown Huntsville. The proposed Constellation complex is to include two hotels, restaurants, shops, a condominium or apartment tower, offices and parking.
McLain spoke Thursday at the first North Alabama Real Estate Market Symposium, which drew nearly 200 bankers and lenders and real estate appraisal, development, brokerage and management professionals.
For the Huntsville retail market, "the infill (development of underused space) and specialty markets hold the most promise," McLain said. The city already has a regional mall and neighborhood mall - Madison Square Mall and Parkway Place - and two "power" shopping centers - Valley Bend at Jones Farm and Westside Centre on University Drive, McLain said, and eight Wal-Marts in the area.
As for the grocery store market, "the holes are huge," McLain said. Though Target and Wal-Mart have entered the grocery business, "only Publix and sometimes Kroger are the only players," he said.
McLain believes that his Constellation project will be successful because Marriott Courtyard and Springhill Suites are lined up for the project and 160,000 cars a day on Memorial Parkway pass the site. The location also has a 40-year shopping history.
At the shopping center convention in Las Vegas, "the project was very well-received," McLain said. "I got a lot of bites."
The local commercial office market is dynamic, said Kyle Collins, senior vice president of Colonial Properties Trust.
Figures show some 13.5 million square feet of office space in downtown Huntsville, the emerging Madison and Jetplex Industrial Park area and Cummings Research Park.
In Research Park alone, Collins said, 1.5 million square feet of office space is under development or has been developed in the last 18 months, he said.
The overall occupancy rate in Huntsville for Class A and Class B office space is 94 percent to 95 percent, Collins said.
Spike in vacancies
"Anything above 90 percent is healthy," he said. "There's been a spike in vacancies," but Collins believes that's a result of companies consolidating here.
"I don't think we're overbuilding today," he said.
In the industrial market, the vacancy rate is running about 4.8 percent in the Huntsville area, said Jeff Wilke, vice president of Graham & Company Southeast LLC.
That company tracks the market for buildings of 20,000 square feet and more.
More than 350,000 square feet of speculative - no tenants signed - industrial space is being built or soon will be under construction, he told the group.
That development is in Jetplex Industrial Park and Jetplex Supplier Park, part of the Port of Huntsville. Graham & Company is developing a 208,000-square-foot spec distribution center in the northern part of the industrial park, and Huntsville-based Triad Acquisitions Group is developing a 146,000-square-foot spec warehouse distribution center and a two-story office building in Jetplex North.
In Jetplex Supplier Park, Industrial Properties of the South is building a 42,000-square-foot warehouse distribution building.
The symposium was sponsored by the Alabama CCIM (Certified Commercial Investment Member) Chapter, the Alabama Institute of Real Estate Management and the North Alabama Commercial Realtors.