2018-03-14 / Real Estate

Retail developers set sights on Chester


Bermuda Square, a shopping center owned by Giant Food Stores, is currently working to fill its anchor space and outparcel pad with tenants. Experts say the area surrounding the shopping center is prime for more retail. 
JAMES HASKINS Bermuda Square, a shopping center owned by Giant Food Stores, is currently working to fill its anchor space and outparcel pad with tenants. Experts say the area surrounding the shopping center is prime for more retail. JAMES HASKINS It’s long served as an interstate outpost of sorts: A mish-mash of retail options sprout at the intersection of Jefferson Davis Highway and state Route 10 just west of Interstate 95, then quickly dissipate.

But an infusion of residential development and commercial growth in the Chester area is attracting new interest from retail developers. On a recent Saturday, workers in florescent green vests man a construction site already populated by cinderblock walls near the intersection.

Near the northeast corner, plans are moving forward to turn undeveloped land into a 300,000-square-foot shopping center named Chester Marketplace. Though early in the development process, marketing materials from Thalhimer Realty Partners Inc. showcase a shopping center with two major anchor stores and multiple smaller tenants.

David Smith, a senior vice president with Cushman & Wakefield | Thalhimer, says national retailers have already expressed interest in the development. Following preleasing and county approvals of a zoning amendment, site plan and construction permits, Smith says construction is expected to commence in the second half of 2019 with occupancy targeted in the second quarter of 2020.

Smith believes the market is ripe for retail.

“The Chester area has been lacking in new development for a very long time. Years. And as a result, that is one market that is less fulfilled than other, more mature markets, such as Midlothian or West Broad,” he says. “It’s definitely what we call a hole in the market, unfilled demand in retail.”

South of the proposed Chester Marketplace development is Bermuda Square, the former site of a Martin’s grocery store. Giant Food Stores, Martin’s’ parent company, purchased the shopping center from Ohio-based real estate firm DDR Corp. in late 2017 for $13.7 million. Previous to the sale, DDR had announced a $17 million redevelopment plan for the shopping center that would have relocated the Martin’s store to a new 66,000-square-foot facility, but site work for the new building stopped mid-2016.

The Martin’s store closed in August of 2017, a few months before Giant purchased the shopping center. Both the former Martin’s store and some surrounding store spaces have remained vacant ever since. Pete Waldbauer, vice president with Cushman & Wakefield | Thalhimer, says the leasing process is ongoing.

“We’re working with several junior anchors to backfill the old Martin’s box,” Waldbauer says. “We’re in negotiations with the tenants now towards leases, and the timeframe on that is hard to predict.”

Noting that a section of Bermuda Square remains fully leased with tenants like Subway and Mattress Firm, Waldbauer says the demand for retail is there.

“It’s a very vibrant market for sure. The primary driver is all the residential east and west on Route 10, and then the proximity to the I-95 interchange,” he says. “Retailers are looking for population and traffic counts, and this has both.”

According to Thalhimer, 70,000 residents live within a 5-mile radius of the interchange at Routes 1 and 10, and more are on the way. A new upscale residential development just off Route 1, the 385-unit Moore’s Lake Apartments, is expected to open early next year. Across Jefferson Davis Highway, work is underway to build an addition to Breckenridge Shopping Center. The location for the 96,600-square foot addition was previously a Kmart store, which shut its doors in July 2016 and has since been demolished.

The addition will be built on an 11-acre parcel, and includes a T.J. Maxx, HomeGoods, Ross Dress for Less, Ulta Beauty, PetSmart and Kay Jewelers. Last month, Miles Freedman, president of developer GFD Management, told the Richmond Times-Dispatch he planned to have the addition completed by this fall.

“That’s a pretty good redevelopment of that old Kmart,” says Brian Glass, senior vice president of retail brokerage for Colliers International. “It’s an area that has been underserved with that type of retail. The owners of the shopping center have done their homework.”

Chesterfield County Planning Manager Steve Haasch says developers’ reinvestment in older shopping centers speaks to the area’s retail potential.

“Generally, we have a lot of older community shopping centers, but it’s rare to see people invest in those older centers,” he says, noting that the area benefits from recent residential development nearby, as well as people heading home from industrial jobs.

Juggling the construction of new shopping centers with revitalizing older ones is a good for the county, Haasch says.

“For a long time, the county was just focused on keeping up with growth,” he says. “We need to promote reinvestment, as well as balance that with new development.” ¦

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