STOREFRONT INVENTORY REPORT 2014/2015

Transcription

1 STOREFRONT INVENTORY REPORT 2014/2015 The Downtown Raleigh Alliance produced this storefront inventory report. The Alliance is an award-winning nonprofit organization whose mission is to continue to revitalize Raleigh s downtown by enhancing its quality of life and contributing to its economic success (For more information, visit The City of Raleigh is a key partner of the DRA in its economic development efforts to revitalize downtown. DRA receives a grant from the city to enhance its tax base by generating new jobs, supporting existing businesses, and attracting new businesses in particular storefront businesses. For questions concerning this report, please billking@downtownraleigh.org.

2 Storefront Inventory Report Downtown Raleigh TABLE OF CONTENTS Executive Summary... 1 Introduction... 3 Methodology... 4 Comparison with Inventory... 5 Openings/Closings Analysis Current Vacancies Analysis...14 Map 1: Fayetteville St.-Moore Square...16 Map 2: Warehouse District...18 Map 3: Glenwood South...20 Map 4: Capital District...22 Map 5: All Stores in Downtown...24 Current and Future Retail Demand...25 Downtown Retail Initiatives...26 Retail Vacancy Rent Analysis...28 Summary of Recommendations...29 Disclaimer The information contained herein was obtained through observation and public records. Given the evolving nature of vacancies and business openings/closings, some of this information may become outdated. Every attempt was made to create an accurate picture of the storefronts in downtown, but we cannot guarantee accuracy for all information.

3 EXECUTIVE SUMMARY As part of its role as the primary retail recruiter for Raleigh s central business district, the Downtown Raleigh Alliance periodically undertakes an inventory of every storefront within the 110-block municipal services district for downtown. This inventory helps provide an accurate account of the present vacancies and tenants in downtown, as well as allows for trends in openings/closings, business mix, clusters and vacancies to be identified. This report includes identification of vacancies not currently on the market and data on the growth of downtown s retail base. A few highlights of the analysis: Since late 2010 (when the previous inventory began), we have added 32 new retailers to Downtown Raleigh, who are still open today. Our retail base, composed of nearly all independent, locally-owned retailers, has grown by a net gain of 14 new soft-goods and specialty gifts retailers in the last four years, making Downtown Raleigh one of the largest concentrations of independent retailers in the region. In 2011, our total storefront vacancy rate (including retail-possible and non) was 10.2%. In 2014, the storefront vacancy rate is now 8.8%. But, the number of retail vacancies that are available for lease is actually much smaller. At the time of this study, only 29% of vacant storefronts are on the market for lease meaning over 70% of downtown s vacant storefronts are not available. Furthermore, this means that the number of rentable, vacant storefronts are a mere 1.9% of all storefronts in downtown. Retail saw the largest percentage increase among various storefront classifications in downtown with a 35.2% increase in the retail base in the past four years. Restaurants also saw substantial growth with a net gain of 19.3%. The Fayetteville St. district saw the biggest increase in its retail base with a net gain of six new retailers. Warehouse District saw the second largest increase with a net gain of five new retailers. Glenwood South and Moore Square both saw a significant number of stores open, but also had several stores close and did not have the same level of net growth as the other districts. This report also examines the vacancies in each district of downtown and offers analysis and suggestions for reactivating those vacancies to help improve retail and street life in Downtown Raleigh. The vacancies identified by this inventory are mapped out to visualize various opportunities for retail prospects or redevelopment. For example, several clusters of vacant buildings exist, which could be occupied or redeveloped to help connect downtown s districts. 1

4 EXECUTIVE SUMMARY Throughout the report, recommendations are made to help improve retail and street activity in downtown. Recommendations from this analysis include: Use the results of this storefront that identify vacant storefronts that are not on the market or held for redevelopment and encourage owners to either lease or sell these buildings to provide more space for retail. Consider providing support such as a loan pool to help landlords or retail tenants reactivate vacant spaces for those storefronts left vacant because of disrepair and in need of renovation or up-fit,. This pool could also be used to help up-fit storefronts with non-retail uses, such as office space. Provide resources for rent or minor up-fit for pop-up retail to temporarily occupy vacant storefronts. Identify office users in prime storefronts who may be interested in moving off ground floor, work with them to find a new space, and replace with retail tenants. A loan pool or up-fit grants may be helpful for converting these office space to retail storefronts. Continue to market downtown s growing retail base to other retail prospects to add to this growth. Encourage clustering of retail tenants in order to create more identifiable retail areas and drive traffic to more stores. Encourage major pedestrian traffic generators like office or residential development in other districts, such as Glenwood South and Moore Square, to help provide more consistent business for retailers and restaurants. Recruit grocery store or major national retailer to help drive more traffic to other downtown retailers and restaurants and provide more shopping options for downtown residents, workers, and visitors. This recruitment may require additional incentives or concessions, as many other downtowns have used to land major retail and grocery stores. Continue to identify and recruit small, independent retailers which may already have an online store or wholesale production to open their bricks and mortar locations in downtown. 2

5 INTRODUCTION As part of its role as the primary retail recruiter for Raleigh s central business district, the Downtown Raleigh Alliance undertakes periodically an inventory of every storefront within the 110-block municipal services district for downtown. This inventory is useful for several reasons: Provides an accurate account of the present vacancies and current occupants for downtown s streets, which is important as some vacancies may not be publicly listed and some businesses may have opened or closed without much notice in the media. Show an up to date picture of our present businesses, so we can see clusters and diversity in our business base and perhaps identify other trends or relationships related to those businesses. Identification of unlisted vacancies can help DRA and others understand why those places are vacant and work to have them occupied or redeveloped in the future. When compared with previous inventories, trends in both openings and closings can be identified. This allows us to analyze the types of businesses that have succeeded or failed, as well as locations that have turnover or stability, in order to consider policies and interventions that can improve downtown s business mix. This new inventory builds off data collected in late 2010/early 2011, which allows for comparison to that time period and analysis of downtown s growth and progress over the past four years. 3

6 METHODOLOGY The storefront inventory was conducted during September 2014 with two staff members and a supervisor. The staff were provided with maps of the downtown business improvement district and walked every block and catalogued basic information on each storefront and building in downtown using tablets. This information was linked to recent deed information on building ownership from Wake County to provide a more complete picture of the storefronts. Not every building in downtown has storefront space and a number of the street -level spaces catalogued are not necessarily well-suited to retail uses. In some cases, the exact addresses of storefronts were difficult to discern, due to being part of larger building complexes or lacking any clear identification. But every effort was made to match addresses to storefronts and provide an accurate picture of downtown. Data from this inventory was then compared to a DRA storefront inventory, which took place in late 2010 and early We identified trends in openings and closings, business mix, and vacancies. Additionally, we used our data on openings and closings each quarter over that time to track businesses that may have opened or closed since our previous inventory, in order to add context to our findings. A caveat to the study area: there are areas that some consider part of downtown, but are not technically within the municipal services district. DRA keeps track of businesses in these areas and works with those businesses which join as members of DRA. But some nearby retail centers such as Seaboard Station, Person St. Plaza and Cameron Village were not included in this inventory. This study is focused only on the business improvement district, which is roughly bounded by Peace Street to the north, Boylan Street to the west, Martin Luther King Jr. Boulevard to the south and Bloodworth Street to the east. 4

7 COMPARISON WITH 2010/2011 STOREFRONT INVENTORY In late 2010 and early 2011, DRA conducted a similar inventory of every storefront in Downtown Raleigh. This information was used as a point of comparison with our most recent survey, which took place in late Even in approximately four years, substantial changes in downtown s storefront mix are obvious. In every metric, Downtown Raleigh has seen growth in its retail sector and storefront occupancy since late The number of soft good retailers, restaurants, and businesses has increased since that time and vacancy among storefronts is lower. Since late 2010 (when the previous inventory began), we have added 32 new retailers to Downtown Raleigh, who are still open today. These new businesses comprise 63% of our current retail base. (Not included in this count are convenience stores, restaurants, or art galleries, of which there are a substantial number downtown.) This new crop of retailers includes Deco, Nora and Nicky s, Runologie, Lisa Stewart, Raleigh Denim, Videri Chocolate Factory, Nuvonivo, Cat Banjo, Oak City Roasters, Dogwood Collective, and many others. Residents, workers and visitors to Downtown Raleigh can now purchase clothing, books, gifts, jewelry, records, and furniture, along with locally made chocolate, beer and coffee all within walking distance of their homes, offices and hotel rooms. Our retail base is composed of nearly all independent, locally-owned retailers. Due to the proximity of shopping centers like Cameron Village and downtown s small residential population, most large, national retailers have not entered the downtown market. As such, downtown Raleigh has one of the largest concentrations of independent retailers in the region, which has grown by a net gain of 14 new soft-goods and specialty gifts retailers in the last four years. 5

8 COMPARISON WITH 2010/2011 STOREFRONT INVENTORY In 2011, there were 76 vacant storefronts compared to 66 vacant storefronts in That is a reduction of 13% in storefront vacancies since late As mentioned above, not all ground-level spaces are appropriate for retail. Some are clearly constructed for offices or particular non-retail uses. In 2011, we estimate that 67 storefronts that were vacant could have been fitted to retail occupancy, which we call retail-possible in this report. In 2014, we estimate that 48 vacant storefronts potentially could host retail uses. This is a reduction of nearly 27% in storefronts that are retail-possible and vacant. In both cases, some of the storefronts that could host retail would require extensive renovation to do so. Only those storefronts which would require complete demolition and rebuilding were not included. So, renovation costs may still prevent a number of these retail-possible storefronts from being converted to such use. This data indicates that an already low vacancy rate got even lower between early 2011 and In early 2011, our total storefront vacancy rate (including retail-possible and non) was 10.2%. In late 2014, the storefront vacancy rate is now 8.8%. 6

9 COMPARISON WITH 2010/2011 STOREFRONT INVENTORY But, the number of retail vacancies that are available for lease is actually much smaller. At the time of this study, only 29% of vacant storefronts are on the market for lease meaning over 70% of downtown s vacant storefronts are not available for lease. Furthermore, this means that the number of rentable, vacant storefronts are a mere 1.9% of all storefronts in downtown. The reasons for this vary from holding buildings for future redevelopment or demolition to waiting for the market to rise in certain areas to a lack of interest from owners. Other buildings sit vacant without any obvious reason for doing so. (See Maps). The result of having such a small supply of storefronts is a lack of space to host new retail tenants, which help make downtown a more vibrant place. This problem is particularly challenging for retail uses that prefer historic facades and aesthetics such as exposed brick. Ultimately, tapping this unused supply is a key part of increasing usable storefront supply in downtown. In the case of storefronts in disrepair, reactivating the city s downtown loan pool program could help provide resources to landlords and new tenants to fix up storefronts. Other resources such as the state s historic tax credits program (currently dormant) would also help, particularly in the cases of retail prospects who are not large, national brands with the financial 7

10 COMPARISON WITH 2010/2011 STOREFRONT INVENTORY means to fix up stores. Another possible short-term program would be to use pop-up retail to help activate vacant storefronts where the owner is not ready to commit to a long-term tenant or redevelopment plan, yet. Pop-up retail in other cities helped demonstrate to potential retailers how a space looks when activated and inspired new tenants. Pop-ups can also help maintain a lively street during times when longer-term tenants are still being sought after. Temporary arrangements can also allow for online-only companies or new retailers to test the market for a physical store, which matches nicely with Raleigh s growing tech and innovation sector. DRA has worked with the Urban Design Center on identifying pop-up retail prospects and connecting them with spaces. Downtown s low storefront vacancy, though, has made this initiative more difficult, but opportunities still exist with a number of interested pop-up tenants having already been identified. To make this program more viable, a small amount of public funds may be needed to help fund rent or minor up-fit of spaces for pop-up uses. Another challenge is storefronts occupied by ground floor uses that are not retail or restaurant and could potentially occupy higher floors in downtown buildings. For example, 24% of downtown street-level space is occupied by offices or government tenants. Obviously, some office users prefer the ease of access and visibility of ground floor locations. And when downtown had fewer residents and workers, offices help fill space that would otherwise be vacant. And being a government center naturally lends itself to hosting a number of government offices. But, in order to accommodate more retail tenants and further activate streets, some of our existing storefronts need to be converted back to retail use. Downtown s office space supply is increasing and could accommodate some ground floor office users, while the growing retail demand of residents and office workers could be met with more space to host new stores. Again, an important tool for re-purposing these spaces could be a loan pool or up-fit grant program, which provides potential retailers with the resources to convert the office spaces to retail storefronts. 8

11 COMPARISON WITH 2010/2011 STOREFRONT INVENTORY Recommendations for action: 1. Use the results of this storefront that identify vacant storefronts that are not on the market or held for redevelopment (see Vacancy section) and encourage owners to either lease or sell these buildings to provide more space for retail. 2. Consider providing support such as a loan pool to help landlords or retail tenants reactivate vacant spaces for those storefronts left vacant because of disrepair and in need of renovation or up-fit. This pol could also be used for recommendation #4 involving repurposing existing office space storefronts. 3. Provide resources for rent or minor up-fit for pop-up retail to temporarily occupy vacant storefronts. 4. Identify office users who may be interested in moving off ground floor and replace with retail tenants. A loan pool or up-fit grants may be necessary to help convert office spaces into retail storefronts. 9

12 OPENINGS/CLOSINGS ANALYSIS: In addition to conducting storefront inventories, DRA also tracks the openings and closings of street-level businesses on a quarterly basis. Storefront inventories create a snapshot in time for downtown, but data of openings and closings allow for more nuance in examining trends in downtown businesses. We examined the openings and closings of street-level businesses for every quarter from the beginning of 2011 through the 4th quarter of Retail saw the largest percentage increase among various storefront classifications in downtown with a 35.2% increase in the retail base in the past four years. Restaurants also saw substantial growth with a net gain of 19.3%. More restaurants/cafes opened in downtown than any other storefront use over the past four years, but more restaurants/cafes also closed during that time than any other storefront use. Still, downtown saw a large increase in its dining base over the past four years. (Note: Other classifications are not listed here such as Financial Services, Residential, and Office.) The Fayetteville St. district saw the largest increase in its retail base with a net gain of six new retailers. Warehouse District saw the second largest increase with a net gain of five new retail- 10

13 OPENINGS/CLOSINGS ANALYSIS: ers. Glenwood South and Moore Square both saw a large number of stores open, but also had several stores close and did not have the same level of net growth as the other districts. To some degree, this turnover is natural in those areas, as they have a number of existing storefronts and commercials areas such as City Market, which are bound to see more openings and closings, much like any mall or shopping center would experience. But this trend in those districts also highlights the need to drive more pedestrian traffic to those areas so they have fewer closings and growing retail base. For Glenwood South, which also saw half of the restaurant closings over the past four years, a major challenge may be daytime traffic, which needs to strengthen in order to better support storefront businesses. Moore Square has a similar challenge, as more pedestrian traffic is needed to help improve business for retailers. More office and residential development can help drive traffic to other retailers. Downtown will see significant new office and residential developments open over the next year and a half, which will help create even more pedestrian traffic for stores and ground-level space for host- 60 Street-level openings and closings (2007-present) Number of closings Number of openings 11

14 OPENINGS/CLOSINGS ANALYSIS: ing new retail tenants. Continuing that momentum and adding density to all districts of downtown will be important for creating enough customers to support more retailers. Additionally, recruitment of a grocery store or a major national retailer could also drive more traffic for the current and future retail base. At the moment, downtown residents and workers still shop at grocery stores and national retailers, but do so outside of downtown, resulting in sales leakage to other areas of the region. Downtown could retain that retail demand and generate more customers for existing retailers through the opening of one of these major retail tenants. DRA is actively reaching out to and recruiting grocery stores and major retailers to downtown, but landing a major retailer or grocery store may require additional incentives or concessions, as has been the case in other downtowns. For example, Winston-Salem provided an incentive package of approximately $1.2 million to secure a Mast General Store location in its downtown. And other downtowns are offering large incentive packages, such as $1 million in San Antonio, to lure a grocery store downtown. Incentives and concessions can take the form of guaranteeing parking in city facilities, selling city-owned land for below-market value, offering cash grants, low-interest loans, or tax breaks. The two districts with the largest net growth in retailers (Fayetteville St. and Warehouse) offer several important lessons for building a retail base. In the case of the Fayetteville St. district, clustering of retail along corridors may have helped build small, retail-oriented area,s where pedestrians seek out certain blocks for shopping. For example, High Cotton, Nora and Nicky s, Deco, and Quercus are all located next to each other along Hargett St. and Salisbury St. On the other side of the district, Stich, Feelgoodz, and Moon and Lola are also co-located. This allows residents, visitors and office workers to visit these clusters of stores in one trip and have shopping options. The Fayetteville St. district also has the advantage of higher pedestrian traffic than any other district in downtown. The mix of large office towers, restaurants, and residences provides enough foot traffic to help sustain businesses. To improve retail in other districts, traffic generators and drivers are needed and the clustering of retail into identifiable retail corridors will be important for improving downtown s retail base. The Warehouse District also has several successful retail stores open in the past four years. While pedestrian foot traffic is not as high in that district, those retailers, such as Vidieri Chocolate, Raleigh Denim, and Oak City Roasters, combine retail with production facilities and also offer unique products that attract customers specifically to their locations, while supplementing their retail sales with production of products sold across the region and country. 12

15 OPENINGS/CLOSINGS ANALYSIS: Also, several other retailers in downtown supplement their storefront sales with online or wholesale operations. Continuing to identify and encourage these types of retailers to open in downtown can help provide showroom space to small, independent retailers who have multiple lines of business and sales methods. These independent retailers are valued for their investment in the community and unique concepts they bring to downtown s fabric. Recommendations for action: 1. Continue to market downtown s growing retail base to other retail prospects to add to this growth. 2. Encourage clustering of retail tenants in order to create more identifiable retail areas and drive traffic to more stores. 3. Encourage major pedestrian traffic generators like office or residential development in other districts, such as Glenwood South and Moore Square, to help provide more consistent business for retailers and restaurants. 4. Recruit grocery store or major national retailer to help drive more traffic to other downtown retailers and restaurants. 5. Continue to identify and encourage small, independent retailers which may already have an online store or wholesale production to open their bricks and mortar locations in downtown. 13

16 CURRENT VACANCIES ANALYSIS As mentioned before, downtown s vacancy rate is low and the number of available storefronts is very low. With only 1.9% of storefronts available to rent for retail tenants, downtown needs more street-level space to accommodate the growing demand for retail among our residents, office workers, and visitors. This storefront inventory provides a snapshot of current vacant street-level spaces in downtown. Some of these are retail-ready, while others are not appropriate for retail use and are vacant buildings that could be demolished or redeveloped for other uses. Below are brief analyses of the vacancies in areas of downtown followed by maps of downtown with vacancies identified and color coding to help illustrate the nature of the vacant storefront (available for lease, not appropriate for retail, under construction, etc). Fayetteville St.-Moore Square districts (Map 1): This area hosts a major retail center for downtown in City Market, along with the central spine of the city, Fayetteville Street. City Market has several vacancies, which may indicate the need for an anchor tenant for the main hall and stronger pedestrian traffic. The forthcoming Moore Square renovation (and subsequent programming of the park), along with major residential and office buildings opening over the next two years, should help create more traffic. The 200 block of Wilmington Street, along with the 100 block of Martin Street, continue to be home to several prime vacancies that could be filled with new businesses if renovated or sold. Additionally, the southern end of the Moore Square district has several vacant storefronts, which could be occupied by a new cluster of retail/restaurant or possibly redeveloped. Fayetteville Street itself continues to be near full occupancy, though, several major opportunities will come online soon with 227 Fayetteville and the Boylan Pearce building undergoing renovation. Also, the backside of the currently vacant 208 Fayetteville St. and Boylan Peace buildings offer potential opportunities to add storefronts and continue the momentum of new businesses on Salisbury Street by opening back up those Salisbury Street entrances. These additional storefronts could help reactivate Salisbury Street and provide more supply to our tight storefront market. Warehouse District (Map 2): This area has a number of vacant storefronts clustered near Hillsborough Street and offers perhaps the largest redevelopment potential. The 400 and 500 blocks of Hillsborough Street contain a number of vacant storefronts, many of which appear to be held for future redevelopment plans. Hillsborough Street offers the best opportunity for linking the activity of Glenwood South and part of the Warehouse District with the eastern half of downtown. When major vacant sites, like 301 Hillsborough Street, are redeveloped, the street should bustle with consider- 14

17 CURRENT VACANCIES ANALYSIS ably more pedestrian activity and offer a vibrant streetscape for retail. Additionally, this area has some current vacancies on the market with the new Citrix building and the former Jillian s warehouse currently available for lease. Destination retail, entertainment or restaurant could help bring more foot traffic to this area and spur redevelopment or occupancy of those nearby, vacant storefronts, which are not currently on the market for lease. Glenwood South (Map 3): This district offers only a couple of vacant storefronts currently available for lease, but has several opportunities for redevelopment or for reconsideration of putting storefronts back on the market. A few of the vacant buildings are good sites for redevelopment, such as the former Greyhound Bus terminal, which could be demolished and redeveloped for a new office tower to create more daytime traffic in the area. Several other buildings are vacant in the area east of Glenwood Avenue and west of the Capital District, which offer more redevelopment opportunities to add more density like the Greyhound Terminal. Another example is a vacant office building at the corner of Boylan and Tucker Streets, which could take advantage of the new apartment buildings on that corner to add more ground level space for neighborhood services. Two current opportunities exist to reactivate vacant buildings without heavy renovation or alteration. For example, 610 Glenwood and the former Café Helios site could both host retail or services without significant redevelopment costs. Additionally, the currently vacant and available ground floor of The Rockford could help add more retail to a street with an existing restaurant and nightlife base and a cluster of retail at its southern end. Capital District (Map 4): All of the street-level vacancies in the Capital District are state-owned buildings, which are predominately historic homes. These buildings do not contain standard storefronts so these vacancies offer less immediate retail or redevelopment potential. But these houses still offer opportunities to either add office space or certain unique stores, such as antiques or furniture, as seen in many downtowns and historic neighborhoods, such as the photograph above. When examining the state s assets in Downtown Raleigh, state government leaders should make sure to examine the need for retaining vacant historic homes and consider selling or reoccupying these assets. If interested in any of these vacant storefronts or properties, DRA is happy to assist in connecting with the owners and starting a conversation on reactivating the properties. Please contact Bill King, Planning and Development Manager, at billking@downtownraleigh.org 15

18 MAP 1: FAYETTEVILLE STREET-MOORE SQUARE VACANCIES Green = vacant, retail ready, and available for lease Red = vacant, retail ready, but not available for lease Blue = vacant, not retail appropriate and not available for lease Grey = under renovation 16

19 FAYETTEVILLE STREET-MOORE SQUARE VACANCIES Map Address REID ID # FAYETTEVILLE ST S SALISBURY ST S SALISBURY ST A S SALISBURY ST B S SALISBURY ST FAYETTEVILLE ST Map ID # Address REID S BLOUNT ST E LENIOR ST S WILMINGTON ST S WILMINGTON ST FAYETTEVILLE ST S WILMINGTON ST WOLFE ST FAYETTEVILLE ST HILLSBOROUGH 9227 ST S PERSON ST BLAKE ST BLAKE ST S BLOODWORTH ST E HARGETT ST E MARTIN ST E MARTIN ST E. MARTIN ST S BLOUNT ST E MORGAN ST E MORGAN ST S BLOUNT ST S BLOUNT ST S BLOUNT ST S BLOUNT ST

20 MAP 2: WAREHOUSE DISTRICT VACANCIES Green = vacant, retail ready, and available for lease Red = vacant, retail ready, but not available for lease Blue = vacant, not retail appropriate and not available for lease Grey = under renovation Magenta = available for sale and more appropriate for redevelopment 18

21 WAREHOUSE DISTRICT VACANCIES Map ID # Address REID HILLSBOROUGH ST HILLSBOROUGH ST HILLSBOROUGH ST HILLSBOROUGH ST W HARGETT ST W MORGAN ST W MORGAN ST S HARRINGTON ST S DAWSON ST HILLSBOROUGH ST S BOYLAN AVE

22 MAP 3: GLENWOOD SOUTH VACANCIES Green = vacant, retail ready, and available for lease Red = vacant, retail ready, but not available for lease Blue = vacant, not retail appropriate and not available for lease Grey = under renovation Magenta = available for sale and more appropriate for redevelopment 20

23 GLENWOOD SOUTH VACANCIES Map ID # Address REID N HARRINGTON ST GLENWOOD AVE GLENWOOD AVE GLENWOOD AVE W JONES ST W. JONES ST TUCKER ST W JOHNSON ST N HARRINGTON ST N HARRINGTON ST W PEACE ST W LANE ST N WEST ST GLENWOOD AVE N BOYLAN AVE

24 MAP 4: CAPITAL DISTRICT VACANCIES Green = vacant, retail ready, and available for lease Red = vacant, retail ready, but not available for lease Blue = vacant, not retail appropriate and not available for lease Grey = under renovation Magenta = available for sale and more appropriate for redevelopment 22

25 CAPITAL DISTRICT VACANCIES Map ID # Address REID N BLOUNT ST N BLOUNT ST N BLOUNT ST E NORTH ST N BLOUNT ST DAWSON AT LANE ST

26 MAP 5: ALL STORES IN DOWNTOWN (INCLUDES ART GALLERIES, CONVENIENCE, SOFT GOODS) Below is a map of all stores in downtown, including soft goods, art galleries, convenience stores, flowers, and furniture. For more detail and more maps, which show specific types of stores, please visit DRA s website: 24

27 CURRENT AND FUTURE RETAIL DEMAND Recent analysis by HR&A Advisors indicate that Downtown Raleigh already has substantial retail demand, which will only increase in the coming two years, as the residential and office projects open. Current Retail Demand: Retail Category Total Current Potential Total Current Sales Current Unmet Spending Potential Current Capture Rate Current Capturable Spending Potential Current Supportable Square Feet Retail $140 M $40 M $100 M 20% $20 M 75,000 Future Retail Demand: Assuming the current development pipeline is fully built out, Downtown Raleigh will have: Retail Category Total Future Potential Total Future Sales Future Unmet Spending Potential Future Capture Rate Future Capturable Spending Potential Future Supportable Square Feet Retail $140 M $40 M $100 M 20% $42 M 150,000 25

28 DOWNTOWN RETAIL INITIATIVES Below are some of the other retail-related initiatives DRA is working on to maintain and improve our retail base. Recruiting retail prospects: Working with potential retailers and brokers to try and get them to locate in downtown. This includes reaching out directly to new potential stores, assistance in identifying a space, connecting with brokers, resources for business plan, providing tailored information packets, tours, advice. We recruit a wide range of prospects from small boutiques to large national retailers and grocery stores. Downtown Parking App: We are developing an app that will making finding parking in downtown much easier for potential customers and allow merchants the ability to advertise specials and deals. Pop-up retail: we are working with the Urban Design Center and other interested parties to try and activate some vacant storefronts downtown with retail pop-ups. Our attempts to get owners interested in this program have been challenged by the fact that relatively few vacant storefronts exist in downtown that could host any occupancy in the near future. Sharpening marketing materials for retail: We already make client-specific packages on retail for prospects. We are adding in some district-specific packages, such as for Moore Square, to help sell specific areas of downtown, as well as building packages that target specific types of retail, such as grocery and national retailers. Storefront inventory: The results of our analysis will be helpful in identifying trends in vacancies and business-types, which could improve our targeting and recruitment. Continuing to improve our data and analytical capabilities: We are refining our approach to retail targeting by introducing a more data-driven approach that includes sales leakages, market share, some comparative statistics, all to help use our resources efficiently and build a more successful recruitment strategy. 26

29 DOWNTOWN RETAIL INITIATIVES Examining our online retail recruitment presence: We are looking to improve our online presence for potential retailers by having clear information on new developments, traffic generators for retail, as well as possible resources for new businesses that the city s economic development department provides. Keeping existing retailers happy: In addition to recruiting new retailers, we are working to better coordinate and satisfy our existing retailers, which in addition to pleasing members, also helps our recruiting efforts, as our successful retailers are some of our best recruiters. They serves as real-life examples of how to do retail in downtown and are often well connected in the retail world. So, we work to make sure our current retailers are having a good experience here and we try to connect with them on new prospects they may know about. In some cases, when appropriate, we may bring them in to help talk about their experiences and serve as ambassadors to potential retailers. Additionally, we promote retail through: Shop Downtown Raleigh gift card: we promote downtown as a shopping district, coordinate promotions and offer a Shop Downtown gift card that is accepted at over 100 stores, restaurants, and service providers. First Friday: our monthly First Friday event brings thousands into downtown for art galleries and retailers, many of whom stay open later to take advantage of the increased foot traffic. Ribbon cutting and marketing: we hold ribbon cutting ceremonies for new stores and help with social media and other marketing to help spread the word about new retailers in downtown. Retail Committee: DRA organizes and convenes a committee of downtown retailers so they can brainstorm, coordinate and discuss ideas to elevate retail in downtown. 27

30 Storefront Inventory Report Downtown Raleigh RETAIL VACANCY ANALYSIS RENT SUMMARY Our analysis of recent retail vacancies examined the current asking rents for retail storefronts in Downtown Raleigh. (Several of these vacancies are now off market). Also, keep in mind, rents are likely higher for many of the occupied spots, which may be more in demand and rarely on the market. We found: Average rent for all listings: $18 per square foot Range of rent: $15-$ % of available listings range between $15-$20 ASKING RENTS FOR RETAIL LISTINGS Analysis by DRA using Tacquire and Xceligent, Triangle Commercial Property Exchange 28

31 SUMMARY OF RECOMMENDATIONS Using the analysis in this inventory, DRA developed a number of recommendations to help improve storefront activity, specifically retail, in Downtown Raleigh. Implementation of these recommendations are largely targeted towards DRA and its partner in economic development, the City of Raleigh. But these recommendations are also useful for landlords, developers, potential tenants, brokers and others to consider. Use the results of this storefront that identify vacant storefronts that are not on the market or held for redevelopment (see Vacancy section) and encourage owners to either lease or sell these buildings to provide more space for retail. Consider providing support such as a loan pool to help landlords or retail tenants reactivate vacant spaces for those storefronts left vacant because of disrepair and in need of renovation or up-fit,. This pool could also be used to help up-fit storefronts with non-retail uses, such as office space. Provide resources for rent or minor up-fit for pop-up retail to temporarily occupy vacant storefronts. Identify office users in prime storefronts who may be interested in moving off the ground floor, work with them to find new space, and replace with retail tenants. A loan pool or upfit grants may be helpful for converting these office space to retail storefronts. Continue to market downtown s growing retail base to other retail prospects to add to this growth. Encourage clustering of retail tenants in order to create more identifiable retail areas and drive traffic to more stores. Encourage major pedestrian traffic generators like office or residential development in other districts, such as Glenwood South and Moore Square, to help provide more consistent business for retailers and restaurants. Recruit grocery store or major national retailer to help drive more traffic to other downtown retailers and restaurants. This recruitment may require additional incentives or concessions, as many other downtowns have used to land major retail and grocery stores. Continue to identify and encourage small, independent retailers which may already have an online store or wholesale production to open their bricks and mortar locations in downtown. 29