SOUTHEAST SNAPSHOT, AUGUST 2008

Greenville Retail Market

The Greenville market has seen retail expansion retreat somewhat in 2008 from the previous year. While nearly 400,000 square feet of gross living area was added to the Greenville retail market through the end of 2007, comparative numbers for 2008 will be significantly less. Although the area has followed the national trends of slower growth, Greenville seems to have been less severely impacted than many other retail markets across the country.

As new space has been placed in service since the building boom of 2007, overall lease rates have decreased slightly, from $12.54/square foot to $12.25/square foot, due in large part to landlord incentives given to retain existing tenants seeking to relocate to more appealing areas along the Woodruff Road corridor as well as other newer properties. Through the first quarter of 2008 lease rates have stabilized somewhat due in large part to the absence of speculative new retail construction. Additionally, several large scale retail developments have been delayed until market conditions improve while some have been cancelled altogether.

Some examples of projects announced but not yet underway include Magnolia Town Center, a 600,000-square-foot mixed-use project planned for the former Greenville Mall site. The project, being developed by Menin Development of Miami, is reportedly still moving forward pending additional lease commitments. At the nearby Point development, McChesney Investment Advisors of Atlanta recently cancelled plans for a 500,000-square-foot mixed-use project at the I-85/Woodruff Road interchange, and Merrifield Partners has placed plans for Crescent Place, a 200,000-square-foot project adjacent to Haywood Mall, on hold as well.

While new developments have seen significant challenges of late, the Greenville market should be well-positioned to recover rather quickly as market conditions improve. Some examples of positive growth include Verdae Development’s 1,200-acre master-planned development and International Center for Automotive Research. Both projects are significant investments bringing new facilities, high-wage jobs and upper-end housing to the outer edges of the Greenville city limits. The convergence of these developments should bode well for retail projects going forward.

Greenville’s downtown continues to buck national trends with positive development growth continuing at a healthy pace. Windsor Aughtry Company recently broke ground on a new Marriott Hotel as part of a project at the corner of Broad and Main streets. In addition to the hotel, the project includes office, retail and restaurant space with an anticipated delivery of mid-2009. Another planned downtown hotel, the Peacock Hotel and Spa, is currently delayed due to financing issues. The high-end boutique hotel and spa, which broke ground in early 2008 and halted construction this spring, is reportedly planning to resume activity in early 2009.

Also in the central business district, TIC Properties has announced plans to soon begin work on its much awaited Main Street development on the site of the former Woolworth’s department store. Located on 2 prime acres along Main Street, the mixed-use project is expected to include office, retail, restaurant and residential space. Encompassing the majority of a city block, the project is expected to transform one of the last significant parcels in the heart of the city center that has yet to be developed.

— Harry Croxton is with Greenville, S.C.-based Croxton Gray Commercial Properties.

©2008 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.