SOUTHEAST SNAPSHOT, MARCH 2012

Louisville Retail Market

As 2012 begins, the Louisville retail market continues to positively move forward. The energy and optimism in the national markets is well reflected in the city with new tenants entering the area for the first time and a variety of local, regional and national players looking to expand. The greatest challenge in the market is the scarce availability of quality space, which is hindering some retailers’ entry into the market and could seriously affect future growth.

Fall 2011 saw Guitar Center, Nike Factory Store and Trader Joe’s all open in Shelbyville Road Plaza in the city’s main retail core, St. Matthews. While the influx of new tenants is positive, the ownership still must re-tenant vacant boxes left by Circuit City, Wild Oats and Borders Books. Most recently, Anthropologie announced that it would join Macy’s, Sears and Von Maur at Oxmoor Mall, further solidifying Oxmoor as the city’s premier upscale shopping destination. Mall St. Matthews continues to be well occupied while appealing to a slightly younger clientele. Other new additions to the St. Matthews trade area include Mellow Mushroom Pizza, Tin Roof and Bruegger’s Bagels.

The biggest news in the northeast segment of the trade area was the $78 million sale in December 2011 of Springhurst Towne Center to an affiliate of the California State Teachers’ Retirement System. New additions to the property in 2012 will include HomeGoods, Old Navy, Shoe Carnival, Genghis Grill and Vitamin Shoppe. The Summit, Louisville’s only lifestyle center, will replace the relocated Old Navy and welcome the state’s first Earth Fare. Owned locally by the McMahon Group, Brownsboro Crossing, just east of the Summit, has more than 20 acres available for retail development.

In south Louisville, Ross Dress For Less is under construction at Jefferson Mall and should open in late summer or early fall. Lane Bryant is relocating from the mall to the Weingarten-owned Festival at Jefferson Court, and Tuesday Morning has leased the former T.J. Maxx space after it also relocated to The Festival. Availabilities in the southern market still include a former Walmart totaling more than 113,000 square feet, a 28,000-square-foot vacancy contiguous to Hobby Lobby, as well as 20-plus acres of land next to Target. Additionally, site work has begun on Jefferson Plaza, a new 27-acre development proposed contiguous to Jefferson Mall.

The story in western Louisville, along the Dixie Highway is generally very good. In the northernmost end of the trade area, Southland Terrace has two anchor vacancies but is otherwise well tenanted and busy. To the south, a small expansion is slated for the Dixie Manor’ s addition of a multi-tenant building near McDonald’s. National discounter Ollie’s Bargain Outlet opened its first store in Louisville in early February joining Target, Burlington Coat Factory, Value City Furniture and Dollar Tree at the Park Place center. Ollie’s is looking for additional locations in the market. Further south, the new owners of Dixie Valley Shopping Center have completed a facelift and continue to work on a re-development of the property.

An additional new entry into the market is Urban Outfitters, which replaces a closed Blockbuster along Bardstown Road, Louisville’s eclectic retail and restaurant district. Uncle Maddio’s opened last fall in the Bardstown corridor and Dunkin’ Donuts is under construction in the same area. Louisville continues to be a vibrant restaurant incubator with new concepts such as The Silver Dollar, Hammerheads, Rye and Coal’s Pizza joining longtime stalwarts Seviche, Lilly’s, Jack Fry’s and Asiatique in the city’s outstanding dining scene.

In addition to the retailers mentioned above, several new national restaurant concepts are looking to enter in the market including Noodles & Co. and Panda Express, while existing restaurants Jimmy John’s, Qdoba, Cheddar’s, Dunkin’ Donuts and Chuy’s Tex-Mex continue to expand.

— Kevin Schreiber is an associate in The Shopping Center Group’s Louisville office.

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