An out-of-state investor has a purchase agreement on the 225,000-square-foot former Macy’s store in Cortana Mall and plans to “repurpose” the space for a use other than retail.
“It could be an entertainment venue, food hall, office space,” says Jonathan Walker of Maestri-Murrell Real Estate, who announced the development during his presentation on the retail sector at the annual TRENDS seminar today. “It could be warehouse space, but it won’t be retail.”
Walker’s announcement about the future of the Cortana Macy’s space—which became vacant in 2016 after the retail giant closed its store there—was one of several nuggets of good news in a presentation focused on the rapidly changing retail sector.
Walker pointed out that malls and shopping centers nationwide are suffering, as the increase in online shopping takes its toll on brick and mortar stores.
Over the last seven years, the percentage of e-commerce sales has increased from 4.2% of total purchases to 8.3%, and those numbers are expected to grow.
What’s more, in the category of general merchandise—clothes, electronics, sporting goods and office supplies, for instance—e-sales have increased to 30% of all purchases. As a result, some 8,000 retail closures are projected for 2017.
While the local retail market is affected by such trends—particularly older and class C shopping centers like Cortana—the sector overall is healthy and there is plenty of reason to be optimistic, Walker says. Among the takeaways:
- Demand for retail space in the Capital Region has outpaced supply for the past three years, while vacancy rates during that period have remained low and in line with the national average—around 7.5%.
- Retail centers are focusing on tenants that can provide goods and services not easily found online—restaurants, health clubs, medical offices and supermarkets. “That’s where you’re going to see your growth in retail,” says Walker, singling out Long Farm, which is anchored by a Rouses Supermarket and has several chain restaurant tenants, as a successful example of the trend.
- Rouses is helping drive new development in the market overall. The Houma-based chain gained several stores in the market when it acquired LeBlanc’s Food Stores in 2016. It also has new locations planned for a new retail development at the intersection of Burbank and Lee drives and at Lagniappe Center on Airline Highway south of Prairieville.
- Retailers looking for space to expand will find the Capital Region to be “the land of opportunity,” with available space in such developments as Rouzan in Southdowns, Shoe Creek in Central and Conway Plantation in Gonzales.
—Stephanie Riegel
