Currently, the Richmond, Virginia, retail market is enjoying positive absorption from reuse of existing space and close to 3 million square feet of new retail under construction, according to Dan Hargett and Pam Strieffler of Insignia Thalhimer.

Retail bankruptcies and closings have made a significant impact on the Richmond market. Fortunately, many of these vacancies have been filled by a combination of retail and non-retail uses. Some adaptive reuse throughout metro Richmond will continue through the remainder of 2002.

Conversely, Richmond will be home to two new major lifestyle centers in late 2003. Short Pump Town Center, developed by Forest City Enterprises and Thomas E. Pruitt, and Taubman Centers, Inc.' Stony Point Fashion Park will serve as a platform for many prominent retailers into Richmond. These projects will spark a new outlook on Richmond as a potential trade area and will have an immediate impact on retail product in the region.

Continued retail demand has triggered development in several other areas, including Village at Swift Creek, The Shoppes at Stratford Hills, Cross Ridge and Bermuda Crossroads Marketplace in Chester. Grocery anchors Ukrops, Kroger and Food Lion continue to expand throughout the metro area in an effort to gain market share through new locations.

The Route 288 expansion will bring new residential and retail development around the western boundary of the Richmond metro area. These areas are densely populated and there is a need for large retail developments. As the population in these areas grows, retail development will follow.

"Keep an eye out for the Short Pump and Midlothian Corridors. The western perimeter of Richmond will be one area to watch as Route 288 develops," say Hargett and Strieffler. "On the other side of town, the East end of Richmond has been long neglected but is starting to grow. You may see retailers in the future fill in this coverage gap."

"The outlook for the Richmond market is excellent," they continue. "With new projects underway, Richmond will have close to 3 million square feet of new development under construction during 2002."

Forest City Enterprises, Taubman Centers, Inc. and CBL & Associates Properties are some of the more active national developers in Richmond. Local developers S.L. Nusbaum & Company and The Rebkee Company have also been active in the region.

Several major leases have been signed in the area recently. At Short Pump Crossings, Staples and Stein Mart absorbed a combined 65,000 square feet. Havertys Furniture took 35,000 square feet at West Broad, Great Big Greenhouse has opened 40,000 square feet at Huguenot Village in Midlothian and Bloom Brothers Furniture has leased two stores, 35,000 square feet at Chesterfield Towne Center and 88,000 square feet on Broad Street. Cost Plus World Market, Bloom Brothers Furniture, and BJ' Wholesale Club are new to the Richmond metro area. Additional new anchor tenants for developments that will open in 2003 are Saks Fifth Avenue, Nordstrom, Galyan' and Value City Furniture.

Vacancy rates in Richmond averaged 8.2 percent during the second quarter of 2002. This is down from a vacancy rate of 9.65 percent at the end of 2001.

Pam Strieffler and Dan Hargett are with Insignia Thalhimer in Richmond, Virginia.

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