Ruggiero says stores like Walmart, Lowes and Costco are having an increasingly difficult time expanding. Because these big-box stores have set formats, they must find parcels of specific sizes and shapes in order to build, and there's not a lot of those left, he notes.
Ruggiero, who represents 15 national chains, tells GlobeSt.com that his clients are all "aggressively trying to enter key markets they're not already in," and are expanding in markets where they have an established foothold. Ruggiero, therefore, says he's had no trouble leasing properties he develops. "Absorption, tends to plug in from entitlement. Six to nine months from that point, our projects are generally 95% leased," he explains.
Ruggiero's experience jives with a recent report by CB Richard Ellis says, which found that vacancy rates in the Puget Sound retail market continued to tighten in the second half of 2000, despite a slowdown in consumer spending in the fourth quarter. The average vacancy rate for the region's 34 million sf of retail space dropped to 2.7%.
The South-end submarket has the biggest chunk of retail, with more than 14 million sf. Its vacancy rate tightened up significantly, falling to 3.5% from nearly 4.5% in mid-2000. Of the total sf here, 8.16 million sf is occupied by power/regional centers.
The CBRE report attributes a significant portion of the vacancy decline to higher occupancy at the 1.2 million/sf Auburn SuperMall in Kent, which two years ago was 30% vacant. Through a refocusing of the mall's concept by new management, Glimcher Realty Trust of Columbus, OH, the property's vacancy rate dropped to 13%. Sources tell GlobeSt.com that historically the industry average is 15%.Vacancies in the Bellevue/Eastside and North-end submarkets continued to slide, down to 2.28% and 2.53%, respectively. According to CBRE, while there is some available space, "much of the supply is scattered throughout numerous centers, leaving selection and location slim"." Downtown Seattle continues to be the tightest of all submarkets, with only 1.54% of unoccupied retail space and the majority of its power centers at full capacity.
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