SOUTHEAST SNAPSHOT, AUGUST 2007

Huntsville, Alabama Retail Market

The market continues to grow with new upscale specialty and power centers, especially in higher demographic areas such as Jones Valley and Hampton Cove in the southeastern areas. Redevelopments of older centers in Huntsville’s prime corridors are also emerging. Although the closings of several grocery chains softened the market in 2006, retail activity remains healthy with several Class A neighborhood developments emerging across the Huntsville/Madison County landscape.

Bridge Street Town Centre, Huntsville’s largest mixed-use development, will add more than 500,000 square feet of retail space, and has drawn new retailers to the area including Monaco Pictures, Kate Spade and P.F. Chang’s. In 2006, Gander Mountain, Fresh Market and Old Time Pottery absorbed approximately 300,000 square feet of vacant box space, reviving some of Huntsville’s older retail centers. A $90 million development anchored by Wal-Mart and a 123,000-square-foot, Publix-anchored center planned for the West Huntsville/Madison area will support the immense population growth of that region.

Local developers are pushing revitalization of the downtown market. In 2006, an Embassy Suites opened; and in June, a $150 million dollar mixed-use development was announced at the center of the city at Memorial Parkway and Clinton Avenue. The development has announced commitments from Courtyard and Spring Hill Suites hotels by Marriott and is planning for restaurant sites, high-end retail and Class A office space as well as a residential component. The development will be connected to the downtown area via the Big Spring Park canal, a walking water feature across the downtown area.

Huntsville’s west side and the city of Madison are seeing many new retail developments, primarily due to the surge of new residential construction in the area. Residential growth has also spurred developments in the southeast portion of Huntsville, primarily the Jones Valley/Hampton Cove areas. The residential surge is due to the anticipated growth due to BRAC as well as the higher demographics in these areas.

Some of the most active retail developers in Huntsville include O & S Holdings, McLain Real Estate and Colonial Properties Trust. Taking note of Huntsville’s new retail developments, new retailers have entered the market including Gander Mountain, Old Time Pottery, Fresh Market, Ruth’s Chris Steakhouse, Red Robin, P.F. Chang’s China Bistro and Anthrpologie as Huntsville’s overall retail vacancy rate remains at a steady 8 percent.

The Highway 72 West/Madison submarket should continue to show strong retail growth as residential growth continues in that area. As Huntsville continues to sprawl, Highway 72’s east side should also show signs of retail growth. The area’s residential population is increasing and many prime retail land sites exist for development.

— Marshanne Castro is a retail leasing agent and property manager for Graham & Company in Huntsville, Alabama.


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