IRR-St. Louis Mid-Year Viewpoint 2015 Local Market Report - Retail
There has been overall modest improvement in the St. Louis retail sector thus far for 2015. Developers have responded to opportunities with new construction. Notable development has included the on-going construction of a 380,000-square foot IKEA store and the 135,000-square-foot Kenrick shopping center. In addition, Dollar General also has multiple stores under construction in both Missouri and Illinois, and is planning to add at least five more locations.
Other notable development includes The Crossings at Northwest, a $106 million mixed use redevelopment of the former Northwest Plaza mall with just under $50 million in TIF from the City of St. Ann and St. Louis County. The redevelopment project involves tearing down much of the former 1,600,000 square foot enclosed shopping mall, opened in 1963 and known as Northwest Plaza, renovating the 12-story office tower and building big-box stores, offices, restaurants and potentially a technical college.
The Crossings at Northwest with an expected opening date in August 2015 will be anchored by a new Menard's nearing completion. Central St. Louis County, especially the I-64 Corridor has continued to lead the recovery in the St. Louis retail market and will likely continue this trend as improved demographic indicators pressure its mostly static inventory. Another new Menard's in Richmond Heights recently began going vertical with an expected completion in late 2015. New specialty grocers such as Lucky's and Fresh Market continue to enter the market as well in multiple locations. Overall construction has been a positive indicator this year. Capitalization rates are closer to regional and national rates, indicating an average amount of risk in St. Louis as an investment market. Declining rents and rising vacancy rates are troubling if these trends continue, but this could be the result of a short lull in demand or increases in new construction.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.