VOL. 124 | NO. 17 | Tuesday, January 27, 2009
Southaven’s Towne Center Facing Tough Times
By Eric Smith
SHUTTERING: This World Market store is scheduled to close soon in Southaven’s Towne Center, along with Circuit City. A Linens ‘n’ Things location is already closed. -- PHOTO BY ERIC SMITH
Bad things come in threes, as the old saying goes, and that principle could easily apply to the 520,000-square-foot Southaven Towne Center, where the economic downturn has taken its toll on a trio of high-profile stores.
Linens ‘n’ Things has already shuttered its doors at the open-air retail center, while Circuit City and Cost Plus World Market will close soon, departures that will leave significant if not gaping holes in DeSoto County’s premier shopping destination.
Those closures, plus a host of others in centers throughout the metropolitan area, have sparked widespread concern among retail developers, managers and landlords, said John Trezevant of Trezevant Realty Corp.
“There certainly is a setback right now on a national level, which has been reflected in Southaven – or Memphis or Germantown or Collierville, even,” he said. “I think everybody for the most part is in a holding pattern to see which stores are going to do well and perform and which stores are going to be underperforming.”
Moving right along
Despite losing three tenants, Southaven Towne Center owner CBL & Associates Properties Inc. of Chattanooga is doing what it can to absorb the departures and move forward with replacements.
“What the store closures really do is provide us an opportunity to bring in some new stores that are either new to Southaven Towne Center or new to the market,” said CBL & Associates spokeswoman Katie Reinsmidt. “We can really meet the demands of the marketplace when we’re looking at what we’re going to bring in there. Regardless of the economic condition, we work toward bringing in that great retailer mix. Through all sorts of economic cycles, that’s what we do.”
While Southaven Towne Center looks to regain its footing, the advent of another large retail center in DeSoto County has been pushed back.
DeSoto Pointe, a 140-acre mixed-use development planned by Trezevant and partner Mark Utley, has sold some lots to banks and some lots to small retailers, but the pair is waiting to see who survives this slump before moving forward in earnest.
“We’ll wait to see who the survivors are on the anchor or department store front,” Trezevant said. “We feel fairly confident in probably 2010 of having one or two large department stores committed where we can start that first phase of the project. We’re fortunate in one regard that we didn’t rush into it and take the first department store or two, or anchor store or two, that came along and maybe wasn’t as credit-worthy as what we were looking for. Then we’d have a lot bigger problem.”
Smaller and better off
While this economic cycle has wreaked havoc on retailers and large centers, some pockets of DeSoto County have managed to fare well.
C.E. “Buddy” Dunstan of Colliers Wilkinson Snowden handles leasing for the 22,800-square-foot Shoppes of Snowden Grove at the intersection of Getwell and Goodman roads. He said the center has been a stable performer, with only one 1,200-square-foot bay for lease following the recent sublet of a 2,400-square-foot space.
“At the moment we are in a very nice situation with that center, and have been,” Dunstan said. “Surprisingly, it seems like some of the smaller center strips are doing a little bit better now because the larger centers are getting hit with the larger and national retailers who are really having some major problems.”
Another small center that’s doing well is Town Square at Snowden Grove, along Getwell Road south of Goodman Road and next door to Snowden Grove Park.
Mike Ferguson of McCullar Ferguson Realty LLC said Town Square’s solid occupancy is the result of a great location plus a healthy mix of local tenants anchored by four well-performing restaurants – Bangkok Alley, Mesquite Chop House, Big League Grill and The Pig.
“Retail in general, as far as what I’m feeling down here in DeSoto County, is a lot of national brands are hurting because of the market itself, a downturn in the financial markets,” said Ferguson, whose company recently landed a new tenant in Edward Jones. “We here at Town Square have a unique product and the tenants feed off each other. We’re well pleased with the performance of the tenants.”
A little patience
Southaven and DeSoto County are similar to other markets when it comes to retail, but the area has been lucky it wasn’t overbuilt, with DeSoto Pointe’s delay a prime example of not building too much too soon.
Despite that benefit, however, there’s going to be some more shaking out with regard to retail in DeSoto County for users of all sizes, Dunstan noted.
“Each day we see more and more national and regional retailers who are having problems,” he said. “I would say we’re still in for some more of the medium-box users that are going to have problems. There’s no question about it.”
That said, market insiders are optimistic that 2009 is the year things turn around, in DeSoto County and elsewhere.
“I think we’re going to come out of this at the end of summer or fall of this year and start to see some rebound,” Trezevant said, “but everybody’s just kind of hunkering down and trying to weather the storm.”