by Dan Rafter
The news is positive when it comes to the retail market in West Michigan. And it would be even better if retailers had more available space from which to choose in the Grand Rapids-Wyoming MSA, according to the latest research from Colliers International.
According to the third-quarter retail report from Colliers, demand for retail space remained steady in the third quarter for the West Michigan region. But at the same time, a lack of supply has slowed the growth in this market from what it otherwise could have been.
As Jeff Hainer, senior research analyst for West Michigan with Colliers writes, local, regional and national retailers have eaten up whatever prime real estate is left in this market. They are hungry for more, but there aren’t many available properties for them to occupy.
Fortunately, new retail construction is hitting the West Michigan region. Retailers are also starting to absorb space in Class-B centers.
Colliers reported that leasing activity in the Grand Rapids-Wyoming MSA’s retail market increased by 68 percent in the third quarter when compared to the second. Sales activity increased by 12 percent quarter-over-quarter.
Net absorption also rose, rebounding from a negative second quarter to a positive 46,172 square feet in the third quarter.
Not suprisingly, an influx of new residential real estate is expected to provide an even bigger boost to the retail market, especially in Grand Rapids. According to the Great Housing Strategies project, Grand Rapids could potentialy see 6,250 new housing units during the next five years. About 3,000 of these would be rental units.
These new residents would, of course, need shopping venues, and the expectation is that retailers will open new locations to serve these new households.
Overall, the retail market in the Grand Rapids-Wyoming MSA had a vacancy rate of 9.1 percent at the end of the third quarter, according to Colliers International.
The immediate future looks to be a strong one here. Orion Construction recently completed construction of Eastown Flats at 1400-1415 Wealthy St SE. Tenants are already signed up for this project’s ground-level retail spaces. This is an interesting project: It was originally designed as solely residential. But its neighborhood association demanded that the project also include retail, something to which the developers eventually agreed.
Two retailers have already committed to the project, Sacred Expressions and Mia’s. Combined, the two will occupy 2,140 square feet of ground-floor space.
Cascade Center for Rehabilitation and Option 1 Credit Union have signed on to join Wheelhouse Restaurant as retail tenants in the soon-to-be delivered Arena Place development at 45-55 Ottawa Avenue SW.