Jim Hubbell Chairman and CEO Hubbell Realty Company

In general, the retail sector is leading Iowa out of its economic doldrums. Retail development in the greater Des Moines area is strong in several submarkets, and Cedar Rapids is seeing steady retail development in both the northeast and southwest retail corridors. National and local developers are actively seeking opportunities to build, and are finding ready, willing and able retailers to fill their centers. Development in Iowa continues to be conservative — based more upon actual demand than on speculation.

The big box stores, specifically Target and Wal-Mart, continue to adapt their traditional discount department store format into the superstore concept, which incorporates full-line grocery stores, pharmacies, photography studios, deli/coffee shops, salons and other specialty stores. The same big box retailers are increasingly seeking locations along major highways with great access and visibility, reversing a tradition of seeking sites near regional enclosed malls.

Colleen Johnson Sales Associate CB Richard Ellis|Hubbell Commercial

Target Corp. and, to a lesser extent, Wal-Mart are leading the way nationally and locally in this trend. In the greater Des Moines area, SuperTarget opened two interstate-oriented stores in the suburbs of Urbandale and Ankeny in the past 2 years, and it purchased another interstate site in West Des Moines, which will go under construction this year. The need for locations with high visibility and easy access to consumers is driven by the incorporation of the full-line grocery stores.

The town center or village concept, which began in year-round warmer climates, has arrived in the Midwest as well. The projects are embraced by city planners, and developers are experimenting with small and large developments that include opportunities to live, work and shop in the same complex. Urban Development of West Des Moines has developed two small projects in West Des Moines and Windsor Heights with great success. They are also developing West Glen Town Center — a major project located along Interstate 35 in West Des Moines.

There are a number of different centers in various stages of development throughout this region of Iowa.

Jordan Creek Town Center, West Des Moines

This General Growth Properties development combines a 1.3 million-square-foot enclosed mall, five freestanding restaurants surrounding a lake, approximately 500,000 square feet of freestanding, box retail and a theatre complex on 200 acres of land, located at 74th Street and George Mills Civic Parkway in West Des Moines. Now under construction, the mall is scheduled to open in August 2004. This will be the largest retail complex in Iowa and, currently, is the largest retail complex under construction in the country. This development sparked an extensive overhaul of the city of West Des Moines’ Comprehensive Use Plan for an approximate 3-mile radius around the development, which will result in an additional 1 million square feet of commercial development.

West Glen Town Center, West Des Moines

This 50-acre Urban Development project will be anchored by a 175,000-square-foot SuperTarget and will include numerous retail, office and residential venues. A 175-room Drury Inn is another early-announced occupant. Hubbell Realty Company plans to build a 16,000-square-foot retail store and an 8,000-square-foot upscale apparel store for local owners at the complex’s main entrance. West Glen Town Center is located 1 mile from Jordan Creek Town Center.

Delaware Retail Corridor, Ankeny

Initiated by Menards and Wal-Mart Supercenter, this half-mile stretch, which lies parallel to Interstate 35 in Ankeny, expanded into 1.5 million square feet of retail big boxes and open-air centers in a 3-year period. In that time, SuperTarget, The Home Depot, Kohl’s, Michaels, PetsMart and Dress Barn have joined numerous small bay retailers and restaurants, making this the most rapidly developing retail corridor in the greater Des Moines area.

Menards Center, Cedar Rapids

In 2002, Menards purchased 70 acres on the Highway 100 bypass about 1.5 miles east of Lindale Mall, the predominant mall and retail corridor in Cedar Rapids. While not yet under construction, Menards will build a 265,000-square-foot store and is marketing the unused portion of the site for collateral retail developments.

Similarly, SuperTarget recently opened a new store on Blairs Ferry Road, away from the mall-related corridors. These developments have occurred because there is little land available close to the mall, and major retailers have been successful here.

Williams Center, Cedar Rapids

A local development group is now marketing the Williams Center, located at Williams Boulevard SW and Trent Street, in southwest Cedar Rapids. The open-air center will include 30,000 square feet of small bay space and up to seven outlots. The center is scheduled to open in fall 2003.

Coral Ridge Mall, Coralville

This General Growth Properties mall was constructed 4 years ago in this western suburb of Iowa City on a site that allowed for very little collateral development. Bounded on the north by Interstate 80, and on the south by Highway 6 and active railroad lines, the only major development is a Lowe’s Home Improvement store, which is under construction on the east side of Highway 965.

Coral Ridge Mall, located 15 miles south of Cedar Rapids, has had a depressing effect on the Cedar Rapids Westdale Mall. While the southwest area surrounding the mall has continued to see new developments such as Menards, Wal-Mart, a Carmike Cinema complex, numerous open-air centers and freestanding restaurants, mall vacancy continues to rise as tenants select Coral Ridge Mall for access to Iowa City consumers. The lack of collateral development sites near the mall did not deter Kohl’s and Famous Footwear from locating north of I-80, which extended the retail corridor between Cedar Rapids and Iowa City.

In the greater Des Moines area, the majority of development is underway in West Des Moines and Ankeny. This development is spurred by significant growth in populations with high incomes as well as interstate and major highway access.

West Des Moines is Iowa’s fastest growing city with development nicely balanced between upscale residential, office and retail complexes. The city has extensively redeveloped the streets and interstate access to accommodate the growth.

Ankeny’s population has doubled in the past 10 years. A former bedroom community for Des Moines, it has become a stand-alone city with office and industrial parks providing employment, enough retail to be self-serving and large residential developments for middle and upper income residents.

Growth in the Cedar Rapids/Iowa City area has slowed since the completion of Coral Ridge Mall. However, there is continued retail development in the vicinity of the mall, in southwest Cedar Rapids outside of Westdale Mall and, soon, in northeast Cedar Rapids as residential growth continues around the northeast suburbs.

The vacancy rates for the greater Des Moines area vary according to property type. For the area’s three regional malls, which total 3.14 million square feet, the average vacancy rate is 8 percent. For neighborhood/community centers, which total 4.75 million square feet, the average vacancy rate is 16.7 percent. Big box retail, which totals 64 million square feet, has an average vacancy rate of 8.7 percent.

Areas to watch include West Des Moines, where collateral developments are likely around Jordan Creek Town Center and West Glen Town Center. In Ankeny, expansion of the Delaware Corridor will continue south. In Pleasant Hill/Altoona, Wal-Mart Supercenter and Menards are leading the development of big box retail in these eastern suburbs. Significantly increased development is expected to occur along the recently opened southern bypass connecting Interstates 35 and 80. Cedar Rapids’ predominant mall and retail corridor near Highway. 100 at East Post Road should experience some growth. Menards is marketing a portion of its 70-acre site for collateral retail developments.


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