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VOL. 119 | NO. 132 | Tuesday, July 26, 2005

Large-Scale Developments Help Draw New Retailers

LANCE ALLAN | The Daily News

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The Avenue Carriage Crossing
The 700,000-square-foot, open-air retail center is scheduled to open in Collierville in October. Retailers include:
Banana Republic Christopher & Bank
Ann Taylor Loft
Barnes & Noble

Having a metro population that ranked 44th in the 2000 U.S. Census can be challenging when it comes to attracting new retailers, but several new developments opening in the Memphis area are broadening its retail landscape.

Certain retailers can only be found in larger cities such as Chicago or Atlanta. But that doesn't mean Memphians are hurting for new retail options.

Newcomers. Assuming construction progresses as planned, The Avenue Carriage Crossing is slated to open in October in Collierville. In addition to retailers already present in Memphis, such as Dillard's and Ann Taylor, the more than 700,000-square-foot, open-air center will introduce newcomers such as Parisian.

"There are a lot of big projects in the works right now, so in that sense, the market is doing very well," said Scott Barton, vice president of retail services with CB Richard Ellis, referring not only to Carriage Crossing but to Southaven Towne Center, also expected to open in the fall. "Those two combined are really going to alter the landscape of retailing here in the Memphis area. Those are substantial. They're brand new. They're going to be fairly upscale. They will bring some new retailers to the area."

Of course, many of the retailers joining the two centers are already prevalent in the market.

"In very general terms, not specific to any type of retail, they're going to hit Memphis after a third or fourth store in Chicago and Atlanta and Dallas," said Danny Buring, managing partner with The Shopping Center Group Inc. in Memphis. "They're going to look at Nashville, Memphis, Birmingham at same time. They are going to Dallas and Atlanta and filling in gaps in between."

Smaller market. The fact that Memphis is similar in size to Nashville doesn't mean retailers typically enter the two markets simultaneously. But that seems to be changing now.

"Even a Nashville, quite frankly, will oftentimes see a large retailer go to that city before they will go to a Memphis," Barton said. "We are finally getting our due. Some of these retailers are looking at Memphis for the first time, and that's a good thing for Memphis."

The reason is the size of the metro area, which hovers around 1 million people, Barton said.

"Compare that with the cities I mentioned, it's only natural that if a retailer is going to try to get the most bang for their buck early in their expansion plans, which of course they always are, they're going to go to the larger markets first as long as they see a good fit with their concept in those markets," he said.

Demographic factors. Demographics are another big sticking point. Retailers want to know population trends, income levels and the percentage of college educated residents before entering an area.

"We've had retailers say, 'We need to see 40 percent college educated and a median income of X with an X amount of population,' and that's when I say, 'Well, I need to take you back to the airport because there's no such beast in Memphis, or to be honest, in a lot of the South,'" Buring said. "A retailer coming from the North or West is used to seeing a lot more density and higher education levels and higher incomes."

Site selection. Retail growth occurring throughout the Memphis market has reflected a healthy mix of newcomers. And Buring said it's likely that more new retailers will enter the market. But finding space in the desired areas of Cordova, Collierville and DeSoto County is becoming tough.

"We don't necessarily see a lot of new construction for retailers coming to the market, but I can say there are deals working or people looking at coming into the market," he said. "A lot of times it's, 'We'd love to do Memphis and there's a site we like at Wolfchase, but we can't just do one store, we need to do two, three, four.' Can they find other sites? The first two might be a slam dunk, but the third or fourth location may not be as easy."

Competition. Whether retailers are entering the market for the first time or opening their fifth location, they are having to work harder to compete.

"Retailing has gotten more and more competitive," Barton said. "Retailers feel the need to differentiate themselves and have something new and creative and fresh in terms of their concept. Oftentimes, what that means is the buildout will be more expensive than it may have been five years ago."

PROPERTY SALES 23 23 1,365
MORTGAGES 21 21 1,068
BUILDING PERMITS 117 117 3,173