Nothing, it seems, could be finer than to be in Carolina. Whether you’re a retailer looking to expand or a developer looking to partake in the growth of a rapidly changing region, North Carolina and South Carolina are exciting places to be.

“People are not migrating north,” says Dick Crouse, principal in the Winston-Salem, North Carolina, office of Crouse & Associates. “People are migrating south. People are migrating to live in the Carolinas. It’s a great place to live — and the retail is following it.”

North Carolina

Charlotte

According to the U.S. Census Bureau, Charlotte, North Carolina, was the second-fastest growing city in the nation during the 1990s. It’s also the largest city in the state of North Carolina. It’s growth like this that has made developers sit up and take notice: Charlotte is no sleepy southern town by any stretch of the imagination.

“I think it’s your basic bread-and-butter demographics [attracting retail to Charlotte],” says David Haggart, a partner in the retail division of Charlotte-based Childress Klein Properties.

With growth fueled by the expansion of Wachovia and Bank of America, he adds, this in-migration into the Charlotte area has brought higher dollar signs with it.

Alex Dmyterko, president of Charlotte-based Crosland Retail Division, says population growth is key. “Population growth, of course, follows total job growth,” he says. The next logical steps are residential infill and retail development.

South Charlotte, an area noted for its remarkable population and income growth over the last 10 years, has lately witnessed tremendous numbers of rooftops going up along the Interstate 485 Charlotte Beltway. Childress Klein, now underway on Phase II of The Promenade on Providence, a 300,000-square-foot lifestyle-oriented center located at Providence Road and I-485, hopes to bring much-needed retail to that area. Phase I, which includes The Home Depot, CVS/pharmacy, On The Border and Macaroni Grill, recently opened. The next phase of retail, including Stein Mart, Linens ‘n Things, Pier 1 Imports, Staples, Starbucks, Café Carolina Bakery, Beauty Brands, Nextel, Sports Clips, Cold Stone Creamery and Great Earth Vitamins, is scheduled to open this month or next. Coming this summer are Ann Taylor Loft and Belle Ville.

“Our first round of leasing has primarily been tenants who were already in the market but view this as an underserved area of the Charlotte market,” explains Childress Klein’s David Haggart. “So they’re expanding their overall coverage. Stein Mart, Linens ‘N Things, Pier 1 and Home Depot are all adding to their existing store count in Charlotte. But then we have Staples coming in with their first store in Mecklenburg County.”

Other new retailers entering the Charlotte market include Cargo Kids, a children’s home furnishings division of Pier 1 Imports, which plans to open five stores in the market. Also, The Home Depot is opening a new lawn-and-garden format store on Wendover Road in Charlotte, directly across the street from its current home improvement store. Using a former Bi-Lo building, the new store will utilize 12,000 square feet of interior space and 25,000 square feet of outdoor greenhouse space.

Jensie Teague, senior managing director in the Charlotte office of Faison, says that what attracts new business to Charlotte also attracts retailers: healthy job growth, good incomes and a high quality of life. Even though the influx of new retailers entering the market began to slow several years ago, Teague says it’s no cause for alarm. “The existing retailers are still looking for new locations in Charlotte, and that’s driven a lot of the demand for space here,” he says. “I think it’s healthy. Consumer demand is still fairly strong in Charlotte. Job growth has slowed, but there’s still a strong economy here.”

Dmyterko says one of the driving development factors for Charlotte right now is the so-called ‘grocery war.’

“Harris Teeter has had an established lock on the south side of Charlotte for a long time, and Lowe’s Foods [based in Winston-Salem] has announced that they’re entering the market. As a result, Harris Teeter is defending its position,” Dmyterko says. “And then we’ve got some interesting dynamics happening with Food Lion, both closing and opening stores. In addition, we’ve got Wal-Mart and Target opening up their superstores and looking for a share of the grocery dollar in the market. When you add them in, it’s sort of like a perfect storm. You’ve got all sorts of activity going for consumer dollars in the market.”

In Matthews, a bedroom community of southeast Charlotte, Childress Klein is giving a boost to its Harris Teeter at Plantation Market. “We’re expanding the Harris Teeter from 31,000 to about 45,000 square feet,” says Haggart. “We’re adding an additional 16,000 square feet of shops to that center as well.”

In southwest Charlotte, Crosland rezoned 85,000 square feet for retail use in the 700-acre mixed-use community of Whitehall, located on N.C. 49 off of I-485. This brings the total retail square footage of Whitehall Commons to 585,000. Anchors include Lowe’s Home Improvement Warehouse and a 234,000-square-foot Wal-Mart Supercenter, the Charlotte region’s first superstore format Wal-Mart.

Just opposite Whitehall Commons shopping center, Charlotte-based Cambridge Partners is underway on the initial retail phases of Ayrsley. At 129 acres, Ayrsley is one of the largest mixed-use developments ever to be approved in Mecklenburg County. Robert McMillan, director of leasing at Ayrsley, calls it “true urban zoning in a suburban setting.” He also calls it an alternative to typical big box development. Anchored by the YMCA of Greater Charlotte, the project will eventually include 340,000 square feet of retail space. Phase I retail, which has broken ground and is expected to open this summer, includes 34,000 square feet of space with signed tenants such as Wild Wing Café and RedBrick Pizza. Wild Wing Café, which originated in Hilton Head and Charleston, South Carolina, will make its Charlotte debut at Ayrsley in 7,760 square feet of space. Southern California-based RedBrick Pizza chose Ayrsley to be its first location east of the Mississippi River. Once completed in 4 to 6 years, Ayrsley will encompass 1.8 million square feet of office space, 1,600 multifamily units, a health club, a movie theater and three hotels — in addition to the 340,000 square feet of retail space.

“This part of Charlotte is the second largest employment district in the state,” says McMillan, “and it was clearly under-retailed.”

By spring 2004, the I-485 Charlotte Beltway will connect to Interstate 85, which should spur development around the Beltway-N.C. 49 interchange on the southwest part of town. The highway expansion will also improve access to Charlotte/Douglas International Airport.

Dick Crouse of Crouse & Associates, which also has branches in Charlotte and Raleigh, says the new perimeter highway being built around Charlotte will have a major impact on development. “As each section of that road is completed, you can see mushrooming development,” he says.

Also on the south side, Crosland plans to open new shops at its Camfield Corners center, which serves the Ballantyne community and other south Charlotte neighborhoods. The new store openings will add 17,654 square feet to the center. The lead tenant, Tire Kingdom, is scheduled to open in May. The other new tenants, including Subway, are expected to open in April. Adding a Borders Books & Music and Cargo Kids, Crosland is also expanding StoneCrest at Piper Glen in Charlotte. The expanded center will be 460,000 square feet once completed.

On the north side of town, one of Faison’s significant Charlotte projects is NorthLake Mall, a super-regional center scheduled to open in August 2005 at the intersection of Interstate 77 and the new I-485 connector. It will be the first regional mall to be built on Charlotte’s north side. Faison recently sold the 120-acre site to Bloomfield Hills, Michigan-based Taubman Centers, but will still handle the offsite and road work. Construction begins late this summer or fall. The 1.2 million-square-foot center will feature Dillard’s, Hecht’s and Belk, along with two more anchors and up to 150 mall shops. John Simon, senior vice president of development for Taubman, says the goal is to better serve the growing communities in the greater north Charlotte area. According to Taubman, the northern half of the Charlotte metro area is expected to add more than 100,000 residents in the next 10 years.

In Huntersville, 20 miles northwest of Charlotte, Crosland and Charlotte-based Pappas Properties are developing Birkdale Village, a 52-acre main street retail and residential development. Eleven new tenants signed on last spring, including anchors Barnes & Noble, Dick’s Sporting Goods and Eastern Federal Theater. Other major tenants include Gap, Gap Kids, Ann Taylor Loft, Banana Republic, Bath & Body Works, Chico’s, Talbot’s, The Yard Shop and Victoria’s Secret. Also new is Belle Ville, a Belgium-based apparel retailer that is unique to the Charlotte market. Birkdale Village is located on Sam Furr Road just west of I-77 at exit 25. Crosland will manage the center’s on-site retail leasing as well as development of the apartments. Pappas will handle retail and office management.

Pappas Properties is also busy with Charlotte Cotton Mills, a residential/ retail/office project in downtown Charlotte, as well as Steele Creek, a 1,000-acre master-planned community in southwest Charlotte, near Cambridge Partners’ new Ayrsley development.

In Concord/Kannapolis, north of Charlotte along I-85 toward Raleigh, RealtiCorp’s Charlotte office is nearing completion of its $50 million NorthLite Center, a 700,000-square-foot mixed-use center located at the southwest corner of I-85 and the newly aligned and widened Dale Earnhardt Boulevard. “When the center is completed, it will be the second-largest power center in the state of North Carolina,” says Doug Baumgartner, regional partner of RealtiCorp. NorthLite will be anchored by Wal-Mart Supercenter, Sam’s Club and Kohl’s. Baumgartner says the first tenants should open by second quarter 2003. The center is expected to create 1,100 new jobs for north Cabarrus County.

In Gastonia, due west of Charlotte, Childress Klein has broken ground on Redbud Commons, a 70,000-square-foot neighborhood center anchored by a 47,000-square-foot Bi-Lo grocery store. The Bi-Lo is a relocation of an existing store that Bi-Lo had on Cox Road at U.S. Highway 74 in Gastonia. David Haggart of Childress Klein says Redbud Commons should open by late fall of this year.

Raleigh

Raleigh, Durham and Chapel Hill. They make up the three diverse points of the Triangle area. Thanks to the area’s three top-tier universities (North Carolina State University, Duke University and the University of North Carolina), plus its extensive research sector, Raleigh/Durham/Chapel Hill is one of the top per-capita Ph.D areas in the entire country. According to Connell Radcliff, president of Cary, North Carolina-based 't Carolina Properties, over 17 percent of Triangle residents boast a post-college degree of some sort.

“Our numbers aren’t average,” says Todd Crouse, a principal in the Raleigh office of Crouse & Associates. “They’re better than average. Our retail sector’s been phenomenal.”

He points to the area’s strong economy, its strong middle class and its historically strong job/population growth as contributing factors. Raleigh is also under construction on its own outer belt 8 or 9 miles beyond its current Interstate 440 Beltline, from Interstate 40 at the airport to the interchange where Triangle Town Center recently opened.

Triangle Town Center, developed by The Richard E. Jacobs Group of Cleveland, opened in fall 2002 at the outer Interstate 540 Beltline/U.S. 1 interchange. The 1.3 million-square-foot super-regional mall is anchored by Dillard’s, Hecht’s, Hudson Belk and Sears. In 2004, an 84,000-square-foot Saks Fifth Avenue will be added.

“The Raleigh/Durham area continues to explode,” says Haggart. “Its actual growth rate has been a little higher than the Charlotte area’s has been. The Streets at Southpoint project, which opened last year in Durham, has been unbelievable in terms of traffic that’s been flowing through that project.”

Developed by Urban Retail Properties and now operated by The Rouse Company, The Streets at Southpoint is a 1.3 million-square-foot regional mall located at I-40 and Fayetteville Road in Durham. Anchors include Belk, Hecht’s, JC Penney, Nordstrom and Sears. The center contains 140 additional shops, as well as a 250,000-square-foot outdoor entertainment district. The Streets at Southpoint is also home to North Carolina’s first Arden B., Cole Haan and Eddie Bauer Home.

“I think the growth will continue,” says Todd Crouse. “The infrastructure is growing to accommodate it. We had two major malls that opened almost 100 percent leased. That’s just phenomenal. Any player who’s not here now will be here in the near term.”

Radcliff says the opening of both regional malls has created peripheral development opportunities. “We are finally getting some attention from retailers that have been busy in the past filling in the Atlantas and the Charlottes of the world,” he says. Two of those new retailers include Nordstrom and Saks Fifth Avenue, which have entered the market for the first time, at The Streets at Southpoint and Triangle Town Center, respectively.

Crosland’s Alex Dmyterko agrees that the Triangle is a crucial place to be for retailers and developers. “That whole area is really going to be the driver of the North Carolina economy,” he says.

One of Faison’s Raleigh projects is Alexander Place Promenade, a 430,000-square-foot center located at Highway 70 and I-540. The center, now under construction and expected to open this spring, will be anchored by Kohl’s and Wal-Mart Supercenter.

Crosland is underway on a $60 million mixed-use project, similar to the Birkdale Village model, in Raleigh. The project will include residential (expected to be among the highest end housing in the Triangle), retail and office space. Located between Wade Avenue and Oberlin Road near Cameron Village, the 15-acre development is one example of ‘smart growth’ — reusing buildings or land that was previously developed.

In Apex, a booming suburb of Raleigh, 't Carolina Properties is in predevelopment on Apex Commons, a 350,000-square-foot center located on Highway 64 near Highway 55. Phase I will be anchored by an 88,000-square-foot Kohl’s, while Ross Dress For Less will follow in Phase II. Three other anchors, soon to be announced, will also join the center.

In Durham, Faison is redeveloping South Square Mall as a 450,000-square-foot regional center anchored by Target and Sam’s. “South Square Mall was the primary mall in the market for 25 years, and it lost all its tenants when the new mall was built in Durham,” says Jensie Teague. “So we’re demolishing the old mall and redeveloping it. We’ve begun demolition and it will open in spring 2004.” Faison will develop and manage the mall.

Just northeast of the Triangle, in Wake Forest, Kahn Development has recently completed the first phase of Wake Forest Crossing Shopping Center. “We’re looking to expand immediately with a second phase,” says Alan Kahn, president. Total projected square footage on the center is 260,000. Tenants include Lowe’s Foods, Dollar Tree, Hair Cuttery, CiCi’s Pizza, China Buffet, Wake Forest Dry Cleaners and five outparcels.

“Retailers are still following their people,” Kahn says. “And because of the unprecedented housing boom, we’re still growing. It’s a good time to be developing.”

South Carolina

According to Edens & Avant, the diverse state of South Carolina is becoming increasingly attractive to businesses, baby boomers and retirees seeking to benefit from the overall low cost of living and high quality of life. Its population of nearly 3.9 million residents is expected to grow at a rate of 6 percent over the next 4 years. This growth rate, reports Edens & Avant, is well above the national average of 4.5 percent.

“South Carolina is holding up well,” says Faison’s Teague. “I don’t think the markets in South Carolina compare to Raleigh and Charlotte right now, but there are certainly healthy pockets in South Carolina where retailers need to expand.” Last year statewide retail sales totaled more than $13.6 billion, reports Edens & Avant.

Greenville/Spartanburg/Anderson

The Greenville metropolitan statistical area (MSA) boasts a population of nearly 1 million residents, reports Edens & Avant, and is consistently ranked among the best places in the country to live and work.

Numerous international corporations call Greenville home; the city also boasts a proud manufacturing tradition. Edens & Avant reports that investments by BMW are having positive impacts on the local economy and spurring further demand for both residential and commercial development in Greenville/Spartanburg. While BMW with its 2,000 employees is perhaps the most visible of Greenville/ Spartanburg’s manufacturing facilities, Milliken, Springs Industries, Michelin Tire and Kemet also employ 2,000 each.

According to Edens & Avant, Greenville boasted retail sales of more than $10 billion last year. “Greenville/ Spartanburg is doing very well,” says Teague. “I think it is going to continue to grow. And Anderson had really rapid job growth, and it has attracted the retailers.” Currently, Faison is marketing Crescent Resources’ Anderson Pavilion, a 75,000-square-foot Publix-anchored center under construction in Anderson.

Dick Crouse predicts good things for the area’s future. “Greenville/Spartanburg continues to grow,” he says. “The road system continues to grow. People continue to move in. I think those major areas, for sure, will continue to grow — but at what pace? There will be a slowdown in some cycles, but growth will continue. I don’t think there’s any question.”

Columbia/Florence

By third quarter 2002, Columbia-based Edens & Avant reports that the Columbia market exceeded 14 million square feet of shopping center space and another 611,500 square feet in the development pipeline. Edens & Avant notes that Sparkleberry Square is undergoing an expansion; Bed Bath & Beyond and Circuit City will join existing anchors Kroger and Kohl’s. Edens & Avant also points out that the massive Village at Sandhill, a 300-acre, $240 million mixed-use project of Kahn Development, is set to break ground this year. The Village at Sandhill, located at the intersection of Clemson and Two Notch (U.S. 1), comprises 150 acres of retail, 40 acres of office and 70 acres of multifamily development.

In the rapidly growing Florence market, situated east of Columbia where Interstate 20 meets Interstate 95, Edens & Avant is currently implementing a $10 million redevelopment and expansion of Florence Mall, located at I-20 and West Palmetto Street. Ross Dress For Less, making its Florence debut, recently signed a lease for 29,950 square feet of space at the mall. Other Florence Mall retailers new to the market include Books-A-Million, Talbot’s, Stein Mart, T.J. Maxx and Atlanta Bread Company.

The Coast

Keep your eye on coastal South Carolina. According to Edens & Avant, the population of Myrtle Beach and the South Carolina ‘Grand Strand’ has doubled in the past 10 years. That number is expected to increase by 13 percent — triple the national average — over the next 4 years.

In Myrtle Beach, CBL & Associates Properties of Chattanooga, Tennessee, plans to open a 1.4 million-square-foot mall in spring 2004.

“We think Myrtle Beach will continue to be a primary tourist destination,” says Eric Snyder, senior vice president/director of corporate leasing for CBL & Associates Properties.

Charleston, too, is a booming tourism market. Nearly 3.7 million tourists visit the area each year, reports Edens & Avant; last year, shoppers spent more than $7.1 million in retail sales, according to the South Carolina Department of Commerce.

“Jasper and Beaufort counties will continue to grow, due to the proximity to Hilton Head and Savannah [Georgia],” says E. David Grubbs, Jr., regional partner in the Charleston office of RealtiCorp. “With the increase in higher paying jobs, such as the DaimlerChrysler plant in Savannah, residential growth will help feed more retail development.”

Grubbs adds that Target has recently entered the Charleston market with four planned stores. Three are now under construction.

“Clearly the growth dynamics of the Carolinas is what is attracting the retailers,” says Lyle Darnell, vice president of retail development, Southeast, for Edens & Avant. “Charleston/Mt. Pleasant, Myrtle Beach and Beaufort County — that’s where the rate of growth is booming.”

In North Charleston, which boasts the Charleston MSA’s highest concentration of retail, Faison has just completed a Publix-anchored center. “I think Charleston is doing the right things to expand and grow,” says Faison’s Teague. “If [Governor] Mark Sanford truly gets the state tax repealed, I think you’ll see a lot more retirees and people moving to the areas along the coast.”

State tax or no, it’s hard to resist the lure of the thriving coastal towns along South Carolina’s Grand Strand.

©2003 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.